FBI: Bailout fraud to strain U.S. agencies

WASHINGTON, Feb. 12 (UPI) -- Law enforcement has nowhere near the resources needed to combat an expected wave of fraud in the $789 billion U.S. financial bailout, a top FBI official said.

The FBI and U.S. Justice Department already are stretched with 2,300 open investigations into suspected illegal financial activity, including 38 probes specifically linked to the economic crisis, FBI Deputy Director John Pistole said in testimony before the Senate Judiciary Committee.

The FBI expects the problems to worsen exponentially as the economy plunges and as Washington spends what will end up being more than $1 trillion on various bailout and stimulus packages, Pistole and Acting Assistant Attorney General Rita Glavin said.

Pistole said he expected the number of major investigations to rise into the many hundreds, focusing on big-name companies that "everybody knows about."

He said they will be similar in scope and complexity to the massive probe of energy company Enron Corp. after its 2001 collapse, the Los Angeles Times reported.

Committee Chairman Patrick Leahy, D-Vt., told the Times after the testimony that he was dismayed to learn how few FBI agents were being deployed to investigate financial fraud cases.

But he said his committee would "make sure there are enough people out there to start catching and prosecuting people."

"They will be more aggressive in the future, I can assure you," Leahy said. "This committee is going to keep the pressure on."