NEW YORK (Reuters) - U.S. federal prosecutors are considering a new strategy for criminally charging Wall Street bankers who packaged and sold bad mortgage loans at the height of the housing bubble, according to a federal official familiar with the investigation.

The official said federal authorities are finding new evidence they say indicates intent to commit fraud over the packaging and sale of mortgage bonds backed by subprime home loans in some of the civil lawsuits plaintiffs' lawyers have filed against large banks.

And they are exploring whether they can build criminal cases against bankers by using a 1984 law intended to punish individuals for scamming commercial banks.

The investigators are part of the Justice Department's Residential Mortgage-Backed Securities Working Group, a network of law enforcement agents and prosecutors - both state and federal - working together to probe the mortgage market meltdown that helped trigger the financial crisis.

"The RMBS Working Group members are aggressively investigating both civil and criminal matters across the country. RMBS Working Group members expect to announce more law enforcement actions in the future," said Adora Jenkins, a spokeswoman for the Justice Department.

The group keeps a close eye on every civil suit filed and holds regular conference calls to update its members on developments. It held a day-long meeting on Friday to discuss ongoing investigations and potential new targets, as well as legal strategies, according to the Justice Department.

The strategy involves a shift away from the more widely used securities fraud charge to a less common offense: bank fraud. The advantage is that perpetrators of bank fraud can be charged up to 10 years after their crimes, compared with the five-year statute of limitations on securities fraud, which has already run out on most events leading up to the 2008 financial crisis. A bank fraud conviction carries up to $1 million in fines and a maximum prison sentence of 30 years.

Rita Glavin, a partner at Seward & Kissel in New York who specializes in white-collar, criminal defense, said she thought the statute's broad scope gave prosecutors an opportunity to use it, and adding a conspiracy charge could help.

"When you charge conspiracies or schemes to defraud it gives you a lot of leeway in terms of the types of evidence you're allowed to get in, because it speaks to the defendant's state of mind," she said.

Some legal critics express misgivings. They say it has the whiff of a face-saving measure by the U.S. government in light of criticisms about prosecutors' inability to bring criminal cases over the financial crisis.

The bank fraud statute is more often used to pursue people trying to forge checks, falsify loan documents or make other false statements to banks. Applying the charge to behavior in the securities market would be a novel use of the statute.

"You're taking a statute that predates the entire phenomenon of securitization and trying to apply it to the securities market," said V. Gerard Comizio, a Washington-based partner at Paul Hastings, a law firm.

"I don't think any prosecutor wants to start his or her day dealing with a statute that it's not clear they have jurisdiction to apply," added Comizio, who previously served as an attorney for the U.S. Securities and Exchange Commission, and deputy general counsel of the Office of Thrift Supervision.

But using the bank fraud statute could inject new life into the U.S. government's effort to hold accountable the people on Wall Street whose overzealous approach to mortgage lending and securitization is what many economists say resulted in the crippling wave of home foreclosures, the financial crisis and the resulting deep recession.

Only one person faces jail time for activities related to mortgage-backed securities: former Credit Suisse Group AG managing director, Kareem Serageldin, who allowed traders working for him to artificially inflate the values of mortgage-backed securities they were holding in 2007. He pleaded guilty to a conspiracy charge in April and faces up to five years in prison. His sentencing is scheduled for August.

His case, however, isn't like the ones the RMBS group is investigating now because he and his subordinates tried to defraud their own institution, not an outside entity.

SECOND WIND

Federal prosecutors had previously ruled out criminal charges in many investigations into the causes of the financial crisis.

As part of the attempt to breathe new life into criminal cases, Federal Bureau of Investigation agents are monitoring civil fraud suits against major banks like JPMorgan Chase & Co and Bank of America Corp , which acquired two of the largest players in the mortgage securitization world - Bear Stearns and Countrywide Financial - in 2008, according to two government sources.

FBI spokesman James Margolin said the bureau sometimes has to rely on civil court cases to turn up evidence of criminal behavior. Amy Bonitatibus, a spokeswoman for JPMorgan, and Lawrence Grayson, a spokesman for Bank of America, both declined to comment.

Civil cases can involve detailed document discovery processes and interviews that law enforcement agents may not have the time or the resources to do, Columbia University School of Law ProfessorDaniel Richman said.

At the greatest risk of being charged, according to legal experts who have been monitoring the fallout from the mortgage crisis, are former mid-level investment bank employees who, during the peak years of mortgage bond issuance in 2005-2007, stitched together hundreds of thousands of doomed home loans into packages and sold them as highly rated securities.

To prove any banker committed bank fraud, the government would have to show that those packaging and selling the securities deliberately lied about their quality, and that they targeted commercial banks in sales pitches.

"Prosecutors would be looking at the offering memos, prospectuses and so on to see if there were any misrepresentations in them to the banks that purchased them," said David Rosenfield, counsel at Herrick Feinstein specializing in white collar criminal defense. He has no specific connection to the MBS lawsuits.

(Reporting By Emily Flitter; Editing by Martin Howell and Leslie Gevirtz)