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Mass Mortgage Fraud Indictments

The Justice Department has been busy.

Former Bear Stearns Cos. hedge fund managers Ralph Cioffi and Matthew Tannin, arrested this morning at their homes in New Jersey and Manhattan, were indicted for mail fraud and conspiracy in the first prosecution stemming from a federal investigation of last year's mortgage-market collapse.

The two men were charged with misleading investors about the health of two Bear Stearns hedge funds whose implosion ignited the subprime mortgage crisis. Cioffi was also charged with insider trading in the indictment, which cites a series of e-mails between the two men. They face as much as 20 years in prison if convicted of the most serious charges.

It's part of the Justice Department's Operation Malicious Mortgage. In Chicago, there were 70 arrests. More than 400 have been indicted since March, with many more arrested:

Since March 1,406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.

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