FBI probing IndyMac for possible fraud

By Randall Mikkelsen

WASHINGTON (Reuters) - Failed bank IndyMac IDMC.PK is under investigation by the FBI for possible fraud involving its mortgage lending, unnamed law enforcement officials said on Wednesday.

It was not immediately clear how long the FBI's probe of IndyMac has been underway. The bureau said on Wednesday it had raised to 21 from 19 the number of corporate targets in its investigation of the mortgage industry.

U.S. banking regulators seized mortgage lender IndyMac on Friday after withdrawals by panicked depositors led to the third-largest banking failure in U.S. history.

The FBI declined to comment on IndyMac, and law enforcement officials spoke about the bank on condition that they not be identified.

Evan Wagner, a spokesman for IndyMac said: "The first we heard of the investigation was in the press accounts today. We're not in a position to confirm or deny (the investigation) because it's an uncorroborated press account."

He added: "It shouldn't be surprising that there is an investigation because of the size of the bank failure."

Frank Sillman, chief executive officer of IndyMac Mortgage Bank, was not immediately available for comment.

"The FBI currently has 21 investigations related to the subprime market industry. We receive information from a variety of sources on a daily basis, and we have an obligation to review each allegation on its merits," spokesman Jason Pack said when asked about the bank.