Some of the charges against him relate to a fraudulent loan that was used in part, prosecutors say, to pay expenses for the Whitewater land development.

But its plans have been set back by several scandals in the last five months involving allegations of fraudulent loans to friends of bank managers.

At the same time, report the fraudulent loan to the U.S. Department of Education.

The company and Federal investigators said that the scheme might have involved other banks and a total of more than $200 million in fraudulent loans.

The mortgage industry has access to extensive property databases and sophisticated computer models that can flag potentially fraudulent loans.

"It was common knowledge within the bank that there were fraudulent loans," the 51-year-old Sri Lankan immigrant said.

He had made $13 million in what investigators describe as fraudulent loans to himself.

The two series of arrests were on charges involving a total of $15 million in fraudulent loans and other transactions, according to the Government.

The documents suggest that the agency may have indiscriminately bought questionable or even fraudulent loans to favor well-known entrepreneurs.

He was later accused of writing fraudulent loan and deposit records.