Attorney General Eric Holder said a newly established government task force would crack down on the kinds of financial fraud that led to the Madoff Ponzi scheme and other losses.
Speaking Friday at the Forum Club of the Palm Beaches, Holder outlined plans for the inter-agency Financial Fraud Enforcement Task Force that the Obama administration announced last November (see Obama Sets Up Financial Fraud Task Force). The task force will be led by the Justice Department, but it also includes the Treasury Department, the Securities and Exchange Commission, the Department of Housing and Urban Development, the Small Business Administration, the FBI and other agencies.
The simple truth is that financial crimes have become all too common, said Holder. And the consequences of these schemes and scams are real, as this community knows all too well. Palm Beach is, in many respects, ground zero for the $65-billion Ponzi scheme perpetrated by Bernard Madoffthe largest investor fraud case in our nation's history.
Holder said the new task force would 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.
Holder noted that the Justice Department has already pursued a number of financial fraud cases in the past year, including Madoff, Allen Stanford, Tom Petters, and most recently Fort Lauderdale attorney Scott Rothstein, who allegedly ran a $1 billion investment scam.
Holder said those efforts would intensify with the new federal budget for 2010, which represents the largest-ever single-year enhancement to support and expand the Justice Departments financial fraud programs. The budget increase will allow for additional FBI agents, prosecutors and support staff to aggressively pursue mortgage fraud, corporate fraud and other economic crimes.
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