The number of economic crimes is expected to "skyrocket" in the near term, and the FBI is working to fast track some financial fraud cases, Director Robert Mueller told lawmakers today.
"While the FBI is surging to mortgage fraud investigations, our expectation is that economic crimes will continue to skyrocket," he told members of the Senate Judiciary Committee.
"The unprecedented level of financial resources committed by the federal government to combat the economic downturn will lead to an inevitable increase in economic crime and public corruption cases," he said.
Mueller cited the FBI's growing mortgage fraud caseload, with the number of cases rising from 700 three years ago to more than 2,000 currently.
"We're working with a number of U.S. attorneys and with the Department of Justice for what we call fast track prosecutions in a number of areas," Mueller said, "We're prioritizing our cases to hit the most egregious early and put those persons away."
Last week, FBI Deputy Director John Pistole testified before congress and said that the bureau has more than 566 open corporate fraud investigations, including 43 major corporate fraud and financial institution investigations that are directly related to the current financial crisis.
Mueller testified today that he is briefed on the ongoing cases every other week and that the bureau is pressing ahead quickly.
"I have, for several months -- been briefed about every other week on the cases relating to the subprime mortgage crisis," he said. "And in those briefings we talk about -- very generally, not necessarily specifically, about any issues that might come up that would delay investigations, and we address those.
"We're anxious to make certain that we press ahead as fast as we can in all investigations."
To deal with the increase in cases, the FBI is looking to move some agents from national security cases to white collar and mortgage fraud cases. Currently, the FBI has more than 250 agents working on mortgage and financial fraud cases. In comparison, during the height of the S&L crisis in the late 1980s and early 1990s, the FBI had about 1,000 agents working on various task forces.
Next month, the Senate is expected to vote on legislation to increase the number of agents that can be hired to work specifically on financial and mortgage fraud cases.
Despite public outrage over the financial crisis, only one major criminal case has come from the FBI's investigation of the subprime lending outfits, when two Bear Stearns hedge fund managers were indicted in May 2008 on fraud, conspiracy and insider trading charges. The two hedge funds were heavily invested in subprime mortgage securities that lost $1.8 billion in 2007.
Sen. Sheldon Whitehouse, D-R.I., asked Mueller if the FBI would be pushing to ensure that the financial fraud investigations go to the top levels of corporations and businesses that engaged in fraud. "What I would ask is your assurance that your instruction to your organization will be to pursue those investigations as high up as they can be driven," he said.
Mueller said that in his experience, he'd like to tackle white collar criminal cases by using narcotics prosecutors to quickly and effectively bring cases and possibly seek guilty pleas in the cases.