Attorney General Calls Financial Fraud ‘One Of The Greatest And Most Glaring Threats Facing Our Economy’

U.S. Attorney General Eric Holder spent at least some of today outside of chilly Washington and in relatively balmy West Palm Beach, speaking at the Forum Club of the Palm Beaches. After mentioning protecting our national security as the government’s “top priority,” Holder went immediately into the government’s “responsibility to safeguard and strengthen the American economy,” which he stated was an “essential component of our larger security goals.” What he then said should be of particular interest to readers of the Financial Fraud Law blog, and to subscribers of the Financial Fraud Law Report:

Holder declared that, “One of the greatest and most glaring threats facing our economy is the presence of financial fraud, particularly in our securities and financial markets.” He noted the continuing government efforts to combat financial fraud, and then pointed out that, earlier this week, The Wall Street Journal had reported that “crisis and fraud in the securities and investment banking industries are at their highest levels since records began.”
 
According to Holder, the “simple truth is that financial crimes have become all too common.” He stated that, in 2009, “Allen Stanford, Tom Petters and, most recently, Fort Lauderdale attorney Scott Rothstein – who is alleged to have run a $1 billion investment scam – joined Bernie Madoff in becoming headline news and household names.” Holder stated that he was proud “that these men, along with more than 450 others convicted of corporate and securities fraud in 2009, have been taken out of the game.”   And, he added, he was pleased that the Department of Justice “is moving forward on more than 5,000 pending Financial Institution Fraud cases.”
 
According to Holder, the government “will use every tool at our disposal – including new resources, advanced technologies and communications capabilities, and the very best talent we have – to prevent, prosecute and punish financial fraud.” The cornerstone of this work, Holder said, is the new, interagency Financial Fraud Enforcement Task Force.  He then stated that the government intends to “focus on four key types” of financial crime:
 
·                     Mortgage fraud – from the simplest of “flip” schemes to systematic lending fraud in our nationwide housing market;
·                     Securities fraud – from traditional insider trading, to Ponzi schemes, to accounting fraud, to misrepresentations to investors;
·                     Recovery Act and rescue fraud – including the theft of federal stimulus funds and the illegal use of taxpayer dollars intended to shore up our financial institutions; and
·                     Financial discrimination – including predatory lending practices in minority communities and the sale of financial products that exploit the elderly and disadvantaged.
 
Finally, Holder pointed out that the recently-enacted federal budget for 2010 will enhance these efforts, and that this budget represented “the largest-ever, single-year enhancement to support and expand the Justice Department’s financial fraud programs. This will allow for additional FBI agents, prosecutors and support staff to aggressively pursue mortgage fraud, corporate fraud and other economic crimes.”