Because we’ve been talking about fraud here in the BuzzPost, a little blurb at the Wall Street Journal Friday caught our eye. It appears two gentlemen out of New York thought it would be a good idea (allegedly, of course) to skim off the top of refinancing activity sold to Fannie Mae, and to “recreate” payment histories for subprime borrowers that had, shall we say, histories more indicative of non-payments. From the story:

Mr. Goldstein, 59 years old, allegedly directed other Olympia employees to create fraudulent or “dummy” loan histories for nonperforming loans where a homeowner had either missed payments or made payments late in order to sell those loans to Credit Suisse First Boston, now called Credit Suisse, the government said. Credit Suisse, a unit of Credit Suisse Group, purchased 12 of those nonperforming loans, prosecutors said. Prosecutors alleged Mr. Pinter, 64, defrauded Fannie Mae by stealing payoff proceeds from 257 refinanced mortgage loans that Olympia was servicing for Fannie Mae.

The Fannie fraud is (allegedly) on the order of $44 million. No numbers we’ve seen are out there for Credit Suisse. Just another friendly reminder of the sort of fraud that’s likely on every lender’s — and every issuer’s — books.