"They use certain codes -- in some ways, they're almost like the mafia or the drug dealers, except what they're trading in is much more sophisticated," said Doug Leff, an assistant special FBI agent working from a New York field office.
Leff said cracking the code was not easy, but the FBI did have a certain advantage in tracking down bid-rigging collusion, because financial firms have a habit of taping phone conversations, CNNMoney reported Tuesday.
It has been an understated investigation without banner headlines at each arrest, but officials said three convictions of UBS bankers in August brought the total to 19 bankers convicted in the probe that began in 2009.
The collusion begins with municipalities issuing bonds and putting the money they raise in an interest yielding fund. The municipality and sometimes a company a municipality has agreed to help then spends the funds on the project for which the bonds were sold.
But the municipality or the company rarely spends all the money that was raised, preferring to tuck some aside for a rainy day.
Bankers then bid on a contract for investing the leftover funds. But the investigation has found that some bankers are colluding with others to rig bids, which takes away the client's opportunity to choose a bid with the best returns, given the bankers have decided where the returns end up in advance of the public bidding process.
Along with the convictions, authorities have collected $740 million in fees, penalties and restitution, CNNMoney reported.
UBS, for example, paid $160 million to settle a case against it, although a spokeswoman said the bank "exited the municipal investment and derivatives business in 2008."
The investigation has implicated several brand-name banks, including Bank of America and JPMorgan Chase.
Although it is a relatively quiet corner of the financial market, "These complex, seemingly uninteresting backroom deals have a real impact on taxpayers," said Richard Weber, head of the Internal Revenue Service's criminal division.