One-fourth to one-half of these losses are believed to be due to fraud and inside trading in a "Cowboy Capitalism" environment which might be described as a federally-sponsored Ponzi scheme. Some of these schemes include nominee loans, double pledging of collateral, reciprocal loan arrangements, land flips, embezzlement and check kiting as well as alleged involvement on the part of organized criminal groups. The banking and thrift industry became increasingly sophisticated while the regulatory mentality has remained trapped in the 1930s. The Federal Home Loan Bank Board, the Justice Department, and the FBI were unprepared to deal with the new thrift environment and the savings and loan scandal. 1 appendix and 24 references (Author abstract modified)