A former Kaua'i mortgage broker involved in a $50 million bankruptcy case is now under criminal investigation for fraud, according to a document filed this week in federal court.

The office of Federal Public Defender Peter Wolff notified the District Court clerk's office by letter Tuesday that James W. Lull has requested legal representation from Wolff's office.

"Mr. Lull is being investigated for fraud," the letter said.

Attempts to reach Lull yesterday in Bellevue, Wash., where he continues to work as a mortgage broker, were unsuccessful.

James Wagner, Lull's lawyer in the bankruptcy case here, also could not be reached for comment.

Wagner in February denied allegations made against Lull by a U.S. Bankruptcy Court trustee that Lull operated a massive "Ponzi scheme" that duped investors with false promises of high interest rate returns on low risk investments.

FBI special agent Brandon Simpson yesterday said, "I can neither confirm nor deny that a criminal investigation is under way."

Bankruptcy trustee Ronald Kotoshirodo was unavailable for comment.

Lull was Kaua'i branch manager of mortgage lender U.S. Financial Mortgage Corp. from 1994-2006. In December 2006, he filed for personal bankruptcy, listing more than $30 million in debts and $6.7 million in assets.

The total amount owed by Lull is now believed to exceed $50 million, according to Stephen Jones, an attorney for the trustee overseeing Lull's bankruptcy case.

Kotoshirodo alleged in court papers that Lull operated a "side-line business" of making his own loans to borrowers who could not qualify for conventional financing.

The money he used to make the loans came from friends, business associates and well-to-do investors Lull had met through the mortgage brokerage firm, according to Kotoshirodo.

But Lull failed to repay many of his creditors and diverted some of the funds to his own use instead of making the promised short-term, high-interest loans, according to Kotoshirodo and bankruptcy court records.

Among his creditors are world-class professional surfers Andy and Bruce Irons of Kaua'i. Lull said in financial papers filed with the court that he owed them $1 million.

Phil Irons, father of the Irons brothers, said in February that his sons have little hope of recovering any of their money but "are lucky compared to some of the people in this community" who did business with Lull.

"They're young, they're successful, but some of the people here, they've lost their life savings," Irons said.

Attorney Wagner said in February that he believed Lull's debts total between $10 million and $20 million, not the $50 million figure cited by Jones and Kotoshirodo.

"For quite a few years, Mr. Lull was quite successfully managing people's money for them. People were making a great deal of money from his investments," Wagner said.

Lull "borrowed more money than he should have" and found himself unable to repay it, Wagner said.

After leaving Hawai'i, Lull worked at a mortgage brokerage in Washington state called Eagle Mortgage, but now is affiliated with another firm, Axia Financial, employees of both firms said yesterday.