FBI probing failed Indymac bank

WASHINGTON, July 16 (UPI) -- The FBI has begun a probe of failed California bank Indymac Bancorp, looking for possible fraud, a source said.

The FBI would not comment on the investigation, but said it was looking at 21 corporations for possible mortgage fraud, CNN News reported Wednesday.

Indymac, with $32 billion in assets, became the second largest U.S. bank to fail after depositors withdrew $1.3 billion in the past two weeks.

The Federal Deposit Insurance Corp. took over the bank Friday and tried to reassure depositors their money was safe, but hundreds of customers lined up at bank outlets Monday to withdraw their funds.

The FDIC has also tried to reassure the public the banking system is running smoothly. Indymac was the fifth bank to fail this year and taking it over was "largely a non-event," the FDIC said.