Feds Probe IndyMac, Expand Subprime Inquiry

July 16, 2008— -- Federal law enforcement and Justice Department officials say the government is investigating the collapse of Pasadena, Calif.-based IndyMac Bank.

Last week, the Office of Thrift Supervision closed the bank, transferring control to the Federal Deposit Insurance Corporation (FDIC). The FBI has received numerous complaints about IndyMac since its closure, the officials tell ABC News.

The bank held just more than $32 billion in assets and had more than $19 billion in deposits as of March 31, the government said in announcing the bank's shutdown. According to the FDIC, IndyMac became the fifth FDIC-insured bank to fail, so far, this year and the first in California since 2003.

A spokeswoman for the FBI's Los Angeles field office could neither confirm nor deny the investigation, first reported by the Associated Press.

Evan Wagner, vice president of communications at IndyMac Federal Bank, the institution's new title, post-government takeover, told ABC News Wednesday, "This is the first we've heard of this. We are looking into it."

But IndyMac's apparent troubles are shared with a growing list of financial institutions in federal investigators' sights.

Also Wednesday, FBI spokesman Richard Kolko confirmed that the FBI now has 21 open investigations stemming from the subprime crisis.

"We receive information from a variety of sources on a daily basis, and we have an obligation to review each allegation on its merits," he said in a statement. "Given the volatility of today's subprime market, we have seen an increase in subprime-related complaints."

Kolko declined to name any of the firms involved in the inquiry. It is unclear if IndyMac has been under previous investigation as part of the FBI's ongoing subprime investigation.

The number of firms subject to the probe has risen steadily this year, starting with 14 firms in January. By April, FBI Director Robert Mueller acknowledged that 19 companies were under investigation.

On Tuesday, Securities and Exchange Commission chairman Chris Cox told the Senate Banking Committee that his agency currently has more than 48 firms under investigation for subprime lending practices.