Falcon: No Criminal Referral on Fannie

Fannie Mae's regulator says his agency has not filed a "formal criminal referral" with the Department of Justice regarding Fannie's accounting irregularities.In testimony before the House Financial Services subcommittee on government-sponsored enterprises, OFHEO Director Armando Falcon maintained that he believes Fannie Mae executives "willfully misapplied" accounting principles to smooth out its earnings, but that there has been no criminal referral. Dow Jones, National Mortgage News, and other news media outlets last week erroneously reported that the DoJ had launched a criminal probe of the company. Mr. Falcon said he had briefed many agencies about the investigation by the Office of Federal Housing Enterprise Oversight, but did not specify which ones. The DoJ is part of a working group of federal agencies that is keeping an eye on developments in the Fannie Mae accounting scandal. Fannie Mae can be found online at http://www.fanniemae.com.