UPDATE 1-More FBI agents sought to probe financial crimes

* More prosecutors, lawyers, bankruptcy attorneys sought

* Justice Dept. budget at $26.7 billion, up 3.8 percent (Adds details throughout)

WASHINGTON, May 7 - The U.S. Justice Department's proposed $26.7 billion budget for fiscal 2010 included more FBI agents to investigate mortgage fraud and white-collar crime, Attorney General Eric Holder said on Thursday.

In prepared testimony to a Senate appropriations subcommittee, Holder said the 3.8 percent increase in the total budget from the previous year included more money for combating financial fraud and for a number of other areas.

Increased funding would be used for "additional federal prosecutors, civil litigators and bankruptcy attorneys to protect investors, the market, the federal government's investment of resources in the financial crisis and the American public," he said.

The Justice Department later said its budget included $62.6 million for 54 additional FBI agents and 165 attorneys in Washington, D.C., and in U.S. attorney offices around the nation to aggressively pursue mortgage fraud, corporate fraud and other economic crimes.

The FBI as of last month had 44 corporate fraud cases under investigation related to the mortgage industry, the department said.

That is one more case than the last number given in March. FBI officials have said the cases include allegations of financial statement manipulation, accounting fraud and insider trading.

In addition, the FBI has more than 530 corporate fraud cases, the department said. It gave no details of any of the cases under investigation, but said corporate fraud cases can take a long time, sometimes up to four years, to complete.

FBI Director Robert Mueller told Congress in late March the law enforcement agency was bracing for a wave of fraud and corruption cases stemming from the government's multi-trillion dollar effort to stimulate the economy and bail out financial institutions.

Holder said the FBI already has more than doubled the number of agents investigating mortgage scams.

"The FBI is investigating more than 2,100 mortgage fraud cases. This number is up almost 400 percent from five years ago," he said.