Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, said indictments are "inevitable" as his office staffs up and continues to pursue an array of criminal and civil investigations.

"You can't push out $3 trillion and not expect someone to take advantage of it," he said Tuesday at a New York seminar on Tarp, referring to a tally of various government assistance programs for the financial industry.

One type of investigation involves "application-stage fraud," Barofsky said. "These are banks that are cooking their books, whether it's false valuation of assets, whether it's round-trip transactions — really whatever we've seen recently in large accounting fraud, we're investigating, looking at institutions that did that in order to get Tarp funds."

The watchdog has a budget of $65 million and a staff of 60 that it expects to grow to 160 by early next year. Barofsky, a former federal prosecutor, was sworn in as special inspector general in December.

The seminar was sponsored by KPMG LLP and Willkie Farr & Gallagher LLP.

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