Goldman Sachs Investigated for Their Crimes

This needs to proceed quickly.

The Justice Department is reviewing whether Goldman Sachs employees may have violated criminal fraud statutes in selling off mortgage securities in the months before the U.S. housing bubble burst, a person familiar with the matter said Thursday.

The department’s inquiry, first reported by the Wall Street Journal, was described as preliminary. It was unclear whether it would lead to a full-blown criminal investigation.

A spokeswoman for the U.S. attorney’s office in the Southern District of New York, the unit described as conducting the review, declined to comment.

Michael DuVally, a Goldman spokesman, said that "given the recent focus on the firm, we are not surprised by the report of an inquiry. We would fully cooperate with any requests for information."

Disclosure of the Justice Department inquiry comes after the April 16 filing of a civil fraud suit by the Securities and Exchange Commission accusing Goldman of allowing a longtime client, the hedge fund Paulson & Co., to pick many of the subprime securities in an offshore deal without telling investors that Paulson planned to bet on their failure. Paulson wound up with a $1 billion profit, while two European banks lost that much on the deal.

Goldman has denied wrongdoing.

On Wednesday, 62 U.S. House members sent a letter asking Attorney General Eric Holder to order a criminal investigation of Goldman and other Wall Street banks who may have misled investors in the lead-up to the subprime mortgage meltdown in the fall of 2008. Rep. Marcy Kaptur, the Ohio Democrat who initiated the letter, also joined liberal activists in delivering to the Justice Department a petition signed by 140,000 Americans calling for a criminal inquiry.

It was unclear when the Justice Department review began…

Inserted from <McClatchy DC>

Lets get to the good part: the sentencing.