Newsday – A federal probe of the $1.8-billion collapse of Bear Stearns hedge funds has spread to include the activities of a number of banks and other lenders, according to court records and legal sources.

Investigators are also reviewing various private financial memorandums prepared by Bear Stearns officials for possible fraud against wealthy investors, said the sources.

One of the banks that may have been defrauded in the case was Barclays Bank PLC, the British institution that last year filed a federal lawsuit against Bear Stearns & Co. Inc. over losses from the hedge fund, said one attorney familiar with the case.

Federal prosecutors in Brooklyn are overseeing the Bear Stearns case while other Wall Street probes are being carried out by federal officials in Manhattan, said attorney Andrew Entwistle, who is representing investors suing the parent Bear Stearns Companies Inc. and affiliates.

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