Financial Fraud

The National Center for Disaster Fraud (“NCDF”) was established by the Department of Justice to investigate, prosecute, and deter fraud in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. Now, its mission has expanded to include suspected fraud from any natural or manmade disaster.

Florida hedge fund manager Arthur Nadel, who scooted around the country last winter after the government got wind of his fraud and who told his wife to ‘sell the Subaru if you need money,” pleaded guilty to 15 counts of securities fraud today for defrauding customers of millions of dollars in a massive Ponzi scheme.

As one of his first major decisions since taking over as Manhattan District Attorney from long-time incumbent Robert Morgenthau, Cyrus Vance, Jr.

Raymond J. Lohier, chief of the Securities and Commodities Fraud Task Force in the U.S. Attorney’s Office in the Southern District of New York, will fill the vacancy on the U.S. Court of Appeals for the Second Circuit that was created when Sonia Sotomayor was named to the U.S. Supreme Court, at least if N.Y. Senator Charles Schumer has his way. Schumer is pushing for Lohier to be appointed to the seat.

We have frequently highlighted the efforts of numerous state attorneys general, including most prominently New York State Attorney General Andrew Cuomo, to combat financial fraud.

Art crime is big business – and can lead to very large financial frauds when stolen or forged artworks pass through the marketplace. One quip is to the effect that of the 4,000 paintings produced by the artist Jean-Baptiste Camille Corot, 7,000 are in the United States.   

“No one can truly feel secure if they don’t have faith in our economy and our government,” according to Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “Financial crimes have depleted people’s savings and taken away their homes, and holding those criminals accountable is critical to any economic recovery.” 

The receivers of a number of insurance companies argued that the insurers’ assets were looted through a complex fraud scheme perpetrated by Martin Frankel, and they sought to impose liability on the investment company through which Frankel funneled the insurance companies’ funds before moving them to his Swiss bank account.

Federal courts are required to state in open court the reasons for their imposition of a particular sentence in a criminal case. The other day, Eastern District of New York Judge Jack B. Weinstein sentenced a convicted criminal defendant, Eric Butler, who had been charged with fraud in connection with the purchases and sales of auction-rate securities (“ARS”), to five years in prison.

Suspicious Activity Report (“SAR”) filings for the first six months of 2009 indicating suspected Mortgage Loan Fraud remain at a historically high level, according to a report released today by the Financial Crimes Enforcement Network ("FinCEN"). Moreover, activities involving suspected check fraud, including traveler's checks and counterfeit checks, show significant increases in 2009 across all of the industries required to file SARs.