Aug. 7--Colonial BancGroup confirmed Friday it is being investigated by the Justice Department for possible mortgage-related criminal violations and by the Securities and Exchange Commission for suspect accounting practices tied to its request for federal bailout money.

The Montgomery, AL-based holding company for Colonial Bank also acknowledged that Alabama state banking regulators are seeking authority to place the troubled regional bank into federal receivership.

A hearing in the matter is set for Wednesday with the Alabama State Department of Banking.

The announcement came four days after Colonial Bank's regional offices in Orlando were raided by U.S. Treasury agents, who conducted a search warrant for an unidentified investigation.

Colonial said Friday the Justice Department probe involves alleged accounting irregularities by its mortgage financing unit, which is based in the downtown Orlando location. Colonial was the 4th largest bank in Central Florida in 2008, according to regulatory data.

On Monday, Agents also raided the headquarters of Ocala-based Taylor, Bean & Whitaker Mortgage Corp., an erstwhile business partner of Colonial. The Ocala company shuttered its mortgage lending business on Thursday in the wake of an investigation by federal housing officials into possible mortgage fraud.

Last week, a $300 million deal between Colonial and the Ocala company collapsed. Colonial's request for more than $500 million in TARP money had been contingent on the infusion of capital from Taylor Bean.

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