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Hundreds of individuals nationwide have been arrested by law enforcement officials targeting mortgage brokers, real estate agents and others in the industry involved in fraud cases totaling about $1 billion in losses, the Justice Department said today.

The investigation by the FBI and Justice Department, began March 1, and includes 144 fraud cases in which 406 defendants were charged - of whom nearly 300 have been arrested, including 60 in a coordinated sweep Wednesday, Justice Department said.

In New York, two former Bear Stearns managers have been arrested, federal authorities said Thursday, according to a report by the New York Times. They are the first executives to face criminal charges in the wake of the subprime market debacle. The operation comes amid an unfolding mortgage crisis that has led federal authorities to make mortgage fraud a higher priority.

As mortgage fraud has boomed, it has become more sophisticated, authorities say, and investigators now are targeting prolific crews, some with links to street gangs. Those arrested this week include brokers and appraisers, sources said.

Several agencies were credited as helping with the investigation, including the Internal Revenue Service, the Secret Service, the Department of Housing and Urban Development, immigration and customs agencies, postal inspectors and the Federal Deposit Insurance Corporation. Most of the arrests came Wednesday, federal law enforcement officials said, in Miami, Houston, San Antonio, Baltimore, Chicago and other cities.

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