Feds End Criminal Inquiry on Mozilo

By JOHN R. EMSHWILLER

LOS ANGELES—Federal prosecutors have decided to close their criminal investigation into former Countrywide Financial Corp. chief executive Angelo Mozilo without filing charges, according to people familiar with the matter.

Angelo Mozilo

The move had been expected for some time by observers of the case. The Securities and Exchange Commission had filed civil fraud charges against Mr. Mozilo and two other former top Countrywide executives.

Last year, Mr. Mozilo and his former colleagues settled that SEC suit without admitting or denying any wrongdoing. Mr. Mozilo agreed to make a multimillion-dollar payment as part of the settlement.

At that time, people familiar with the matter said the federal criminal investigation, while still open, was relatively dormant and not expected to produce any criminal charges.

However, observers believed a final decision on the investigation wouldn't be made until the new U.S. Attorney in Los Angeles, Andre Birotte Jr., had a chance to fully review the evidence.

Mr. Birotte couldn't immediately be reached for comment Friday evening.

Attorneys for Mr. Mozilo also couldn't immediately be reached for comment. In the past, his attorneys have consistently argued that Mr. Mozilo committed no wrongdoing while at the helm at Countrywide, a firm he helped build into what for a time was the nation's largest mortgage lender.

The company experienced serious financial problems in its mortgage portfolio—problems that contributed to the national financial meltdown in 2008—and was purchased by Bank of America Corp. in 2008.

Mr. Mozilo's attorneys have argued that Countrywide's problems were caused by the general collapse of the mortgage market nationally and not by any misdeeds by company executives.

People familiar with the federal criminal probe say that the general collapse in the mortgage market made it more difficult to pinpoint the actions of any particular executive as something that could be prosecuted.

The government's decision to close the criminal investigation was first reported by the Los Angeles Times.