FBI chief: Mortgage fraud caseload is overwhelming agency

The FBI's mortgage fraud caseload has more than doubled in the past three years, and the surge shows no sign of subsiding, FBI Director Robert Mueller told the Senate Judiciary Committee on Wednesday.

The additional cases are straining the agency's resources, he added. Agents have more than 2,000 active mortgage fraud investigations, up from 700 several years ago, and are pursuing more than 560 corporate fraud cases, including probes directly related to the financial turmoil, the FBI director said. To handle the uptick, Mueller said he had shifted personnel and employed new analytical techniques to root out wrongdoers.

But the bureau lost the flexibility to direct agents to emerging threats after the Sept. 11, 2001, terrorist attacks, Mueller said, pointing out that about 2,000 agents had been moved to national security projects from criminal casework. While the FBI has begun to repopulate the criminal division, "we still have a substantial way to go," he said. The agency wants to hire 2,800 new employees in fiscal 2009, including intelligence analysts, technology and language specialists, and 850 new agents.

Although Mueller stressed that fighting public corruption is the FBI's top criminal priority, he would not answer questions by Judiciary Comittee ranking member Arlen Specter, R-Pa., about alleged improprieties by federal prosecutors and FBI agents in the case of former Sen. Ted Stevens, R-Alaska. The FBI chief said ongoing post-trial motions prevented him from responding in detail. Stevens was convicted on seven felony corruption charges in October and lost his race against now Democratic Sen. Mark Begich. Suggesting that prosecutors were anxious for publicity, Specter said he plans to ask Attorney General Eric Holder about the case when he appears before the committee. Specter said Holder was personally reviewing alleged misdeeds, adding that the Judiciary Committee should examine the case once it is closed "or perhaps sooner."

Mueller defended two sections of the USA Patriot Act set to sunset Dec. 31. A provision that lets agents access library and business records has been used more than 223 times since 2004, and a "roving wiretap" provision -- allowing the government to bug not only the suspect's phone but phones used by or near to the suspect -- was used 147 times, according to Mueller. The FBI director also defended the so-called lone wolf amendment to the Foreign Intelligence Surveillance Act making it easier for the government to monitor noncitizens suspected of terrorist activity but not connected to international terrorist groups. Although the amendment had not resulted in any indictments, it had been "tremendously helpful," Mueller said. The FBI chief said he had not discussed the three provisions with the Obama administration but he hoped the White House would support their reenactment.