Image: Angelo Mozilo
Jonathan Ernst  /  Reuters
Former Countrywide co-founder Angelo Mozilo last year agreed to a $67.5 million settlement to avoid civil trial on fraud and insider trading charges.
By
msnbc.com staff and news service reports
updated 2/18/2011 11:21:26 PM ET 2011-02-19T04:21:26

Federal prosecutors have ended a criminal investigation of Countrywide Financial Corp. co-founder Angelo Mozilo without bringing any charges, a person close to the investigation said Friday.

The federal official told The Associated Press that the probe launched in 2008 into the actions of the former chief executive of the housing giant during the mortgage meltdown has been closed with no indictments. The person spoke on the condition of anonymity because the investigation was never publicly announced, and the Department of Justice as a policy does not announce the closing of investigations.

In October, Mozilo agreed to a $67.5 million settlement to avoid civil trial on fraud and insider trading charges brought by the Securities and Exchange Commission, but prosecutors pursuing the criminal case against him found that his actions did not amount to crimes.

The SEC's charges alleged that the 72-year-old Mozilo and two other former Countrywide executives who also settled profited from doling out risky mortgages while misleading investors about the dangers.

The three men admitted no wrongdoing under the settlement, and it allowed them to avoid the risk of a verdict that could have been used by the prosecutors who would eventually drop the investigation.

Mozilo attorney David Siegel said he could not speak directly to the federal criminal investigation or the SEC charges, but maintained that Mozilo had done no wrong in the cases the former chief executive still faces.

"We continue to litigate various matters in which Mr. Mozilo has maintained his innocence and denied any wrongdoing, and we continue to believe that the facts bear that out," Siegel said.

That litigation includes several civil lawsuits, some filed by investors in Countrywide's mortgage-backed securities.

The shelving of the investigation was first reported by the Los Angeles Times, which said the Mozilo hung up the phone when contacted for comment at his home in the Lake Sherwood golf community of Ventura County.

One defense attorney told the Times the government would monitor civil litigation by Countrywide shareholders against Mozilo and could still decide to bring charges depending on what develops in those cases.

"He may have to testify, and you never know what may come up," the attorney was quoted as saying.

The Associated Press contributed to this report.

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