WASHINGTON (Reuters) – The U.S. government is beefing up a task force to fight mortgage crimes and safeguard federal financial bailouts, the U.S. Justice Department said on Tuesday.

The Federal Reserve, the internal watchdog of the new federal financial rescue program and four other agencies will join the presidential Corporate Fraud Task Force, which was established in 2002.

The move comes amid calls by some lawmakers and other critics for a more aggressive federal crackdown on allegations of financial wrongdoing that have sent Wall Street reeling.

Critics have called for a special task force to handle many cases now being handled by regional offices.

They have also urged stricter supervision of the Troubled Asset Relief Program, or TARP, which is in charge of handing out $700 billion to shore up financial and other institutions.

"The new member agencies represent a continuing focus by the task force to crack down on mortgage fraud, particularly with regard to ongoing investigations into securitization fraud," the Justice Department said.

In addition to the Fed -- the top U.S. banking regulator -- other new agencies on the task force include the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Department of Housing and Urban Development, and the TARP's special inspector general.

They will join senior officials from the FBI, U.S. Attorneys offices, the Securities and Exchange Commission and several other agencies.

The task force was expanded to bring "the most direct pipelines possible" to agencies involved in the fraud-scarred market sectors, said Gil Soffer, top aide to Deputy Attorney General Mark Filip, who heads the task force.

"The crisis hasn't gone away and it called for an expansion of the task force so that we can get our arms around it as fully and completely as possible."

The task force has won nearly 1,300 corporate fraud convictions since 2002, according to the Justice Department. The FBI said last fall it was investigating 24 cases of corporate fraud related to mortgage lending.

Working with the TARP inspector general, the task force will also investigate and prosecute any fraud related to the bailouts, Soffer told Reuters.

He said the cooperation would not be limited to mortgage related cases.

"The critical aspect of the TARP is that a lot of dollars are going to be leaving the federal fist," Soffer told Reuters. "We are really forging a close collaboration."

Soffer declined to say whether there was any wider federal investigation of potential "Ponzi" schemes following the arrest last month of Bernard Madoff on charges of conducting a fraudulent scheme that cost investors $50 billion.

(Editing by Eric Beech)

WASHINGTON (Reuters) – The second-ranking Democrat of the U.S. Senate on Tuesday introduced legislation that would let bankruptcy judges erase some mortgage debt in an effort to stem foreclosures.

The bill drafted by Sen. Richard Durbin would help millions of families avoid foreclosure by easing their monthly payments, the Illinois lawmaker said in a statement.

"After committing over $1 trillion in taxpayer money to address the financial crisis, why don't we take a step that would indisputably reduce foreclosures and that would cost taxpayers nothing?" Durbin, the Senate Democratic whip, said in a statement.

A similar plan failed in the Senate last spring as President George W. Bush and many Republican lawmakers opposed it, but supporters of 'mortgage cram-down' believe that they will prevail as the housing crisis has deepened and President-elect Barack Obama prepares to take office.

OPPOSITION AHEAD

While the financial services industry is generally opposed to the reform, many consumer-rights advocates have come out in support of the plan that would give courts the same broad power to rewrite home loans as they can do for other debts.

"Reasonable and limited reforms of the bankruptcy laws would allow judges to readjust debt owed on primary residences, just as they can for vacation homes and family farms," 21 state attorneys general wrote on Tuesday in a letter to Congress.

While a national housing crisis has worsened in the last 12 months and foreclosures have climbed to record levels, the lending industry has warned that changes to bankruptcy law could stifle credit.

"The bills will increase the cost of borrowing for a home, at the exact moment we need home sales to restart," said Steve Bartlett, president of the Financial Services Roundtable.

The legislation could take many months to work its way through Congress. But the plan could also become law quickly if it is included in an economic stimulus package being drafted now by congressional leaders.

(Reporting by Patrick Rucker; Editing by Kenneth Barry)

NEW YORK (Reuters) – A California court has approved a jury verdict against Boeing Co (BA.N), which means the plane maker and defense contractor must pay former customer ICO Global Communications (Holdings) Ltd (ICOG.O) $631 million in damages, according to ICO on Tuesday.

In the latest move of a long-running legal dispute over a satellite contract, the Los Angeles Superior Court backed a jury's decision in October to award ICO compensatory damages of $371 million, punitive damages of $236 million, plus prejudgment interest.

If it does not pay immediately, Boeing must also pay ICO 10 percent of the total each year, worth about $63 million, ICO said.

Boeing did not immediately return a call seeking comment on the judgment. The company said at the time of the verdict that it would seek an appeal that could take several years to run its course, and that it believed it did not break the law or breach any contract.

The dispute dates back to a $2 billion contract initially awarded in 1995 by ICO to Hughes Electronics, which was acquired by Boeing in 2000.

ICO's plan was to build and launch a dozen satellites that would form the basis of a new global communications network, but according to arguments presented in the case, only one satellite was ever launched into space, another exploded on launch, and 10 more are incomplete and in storage.

ICO, a satellite communications company based in Reston, Virginia, was taken over by wireless pioneer Craig McCaw in 2000.

Chicago-based Boeing initially sued ICO in 2004 after ICO terminated its contract for the satellites. ICO countersued, accusing Boeing of breach of contract and fraud, and sought $2 billion in damages.

Boeing has denied any wrongdoing and said ICO's problems stemmed from a bad business decision betting on the future of satellite phones.

(Reporting by Bill Rigby; editing by Richard Chang)