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Colonial BancGroup Faces Federal Investigation

Colonial BancGroup says it is under criminal investigation by the Department of Justice over alleged accounting irregularities at its mortgage warehouse lending unit.

The company says the probe involves one year's worth of financial statements and says it intends to cooperate.

The announcement Friday follows a raid by federal agents on Monday at Colonial BancGroup branch in Orlando, Fla.

A spokeswoman for the inspector general of the U.S. Treasury's Troubled Asset Relief Program had said that agents from her office, the FBI and Housing and Urban Development inspector general conducted the search.