Obama Creates Financial Fraud Enforcement Task ForceObama Creates Financial Fraud Enforcement Task Force
Attorney General Eric Holder, Treasury Secretary Tim Geithner, Housing and Urban Development (HUD) Secretary Shaun Donovan, and Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro today announced that President Barack Obama has established by Executive Order an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime.
The attorney general will convene the first meeting of the Task Force
in the next 30 days.
Remarks By Attorney General Eric Holder:
Good afternoon. I am joined here by some of my partners in the new effort we are launching today, Secretary of the Treasury Tim Geithner, Secretary of Housing and Urban Development Shawn Donovan, and Robert Khuzami, the Director of Enforcement at the Securities and Exchange Commission, who is here representing SEC Chairwoman Mary Schapiro.
I am pleased today to announce the launch of an interagency Financial Fraud Enforcement Task Force to combat financial crime. The Task Force is designed to strengthen our collective efforts — in conjunction with our federal, state, and local partners — to investigate and prosecute significant financial crimes relating to the current financial crisis; to recover ill-gotten gains; and to ensure just and effective punishment for those who perpetrate financial crimes.
We face unprecedented challenges in responding to the financial crisis that
has gripped our economy for the past year. Mortgage, securities, and corporate fraud schemes have eroded the public’s confidence in the nation’s financial markets and have led to a growing sentiment that Wall Street does not play by the same rules as Main Street. Unscrupulous executives, Ponzi scheme operators, and common criminals alike have targeted the pocketbooks and retirement accounts of middle class Americans, and in many cases, devastated entire families’ futures.
We will not allow these actions to go unpunished, which is why President
Obama has established this Financial Fraud Enforcement Task Force to investigate and prosecute fraud and financial crime.
In the tough economic environment we face today, one of this Administration’s most important missions is to draw upon all of the resources of the federal government to fight financial fraud in all of its forms. The Financial Fraud Enforcement Task Force will wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. We will marshal the criminal and civil enforcement resources of the executive branch to investigate and prosecute financial fraud cases; recover stolen funds for victims; address discrimination in lending and financial markets; and enhance coordination and cooperation among federal, state, local, tribal, and territorial authorities responsible for investigating and prosecuting significant financial crimes and violations.
This Task Force’s mission is not just to hold accountable those who
helped bring about the last financial meltdown, but to prevent
another meltdown from happening. By punishing criminals for their
actions, we will send a strong message to anyone looking to profit from the
misfortune of others: We will investigate you, we will prosecute you, and we
will incarcerate you. We will be relentless in our investigation of corporate
and financial wrongdoing, and will not hesitate to bring charges, where
appropriate, for criminal misconduct on the part of businesses and business
executives.
Even before the launch of this Task Force, we have increased our efforts to
prosecute financial fraud, including securities and commodities fraud, market manipulation, and various Ponzi schemes. In just the last ten months, we have secured the convictions of Bernard Madoff and several of his associates, and working alongside the SEC, have indicted several officers of Stanford Financial Group for their involvement in another massive Ponzi scheme.
Last month, we arrested individuals on charges stemming from what has been described as the largest hedge fund insider trading case in history. We also recently secured a 20-year sentence for the president and owner of Gen-See Capital Corp., who perpetrated a $31
million Ponzi scheme between 2002 and 2009 involving more than 500 victims, as well as 30-year and 25-year sentences for two executives of National Century Financial Enterprises following their convictions on conspiracy, fraud, and money-laundering charges.
We also have devoted substantial attention to preventing and prosecuting
mortgage fraud. The FBI is currently investigating more than 2,800
mortgage fraud cases, up almost 400 percent from five years ago. The
Bureau has more than doubled the number of agents investigating mortgage scams, and has created a National Mortgage Fraud Team at headquarters here in Washington. And last summer, we launched a coordinated state/federal mortgage fraud initiative with state attorneys general from around the country. This initiative will result in enhanced information-sharing, improved criminal and civil enforcement efforts, and a more effective approach to fighting discrimination in the housing and lending markets.
These were important steps, and by launching this new Task Force today we
will build on them in moving forward.
This Task Force will be a robust, substantial working partnership with
concrete follow-through. We will enhance training and information-sharing across
the government, so that our prosecutors, regulators, and law enforcement
agencies work seamlessly, employing the best available practices to fight
financial crime.
We will work tirelessly with the victims of financial crime to ensure that
their rights are restored and their financial futures preserved.
And at the core of the Task Force’s mission will be our
enforcement efforts, which will focus on the types of financial crime that
affect us most significantly in this time of economic recovery: These crimes
include:
- mortgage fraud –from the simplest of “flip” schemes to
systematic lending fraud in the nationwide housing market; - securities fraud – including traditional insider
trading, Ponzi schemes, and misrepresentations to investors; - Recovery Act and rescue fraud – we will ensure that the
taxpayers’ investment in America’s economic recovery is not siphoned away by
a dishonest few; and, - discrimination – this Task Force will work to ensure
that the financial markets work for all Americans, and that no one is
unfairly targeted based on impermissible characteristics.
Our Task Force will take full advantage of the new legislative authorities
Congress provided us earlier this year when it gave our agencies stronger tools
to investigate and prosecute financial fraud. That legislation, the Fraud
Enforcement and Recovery Actof 2009, was an important bipartisan endorsement of
the work we will undertakein this area.
Our enforcement priorities will continue to be informed by the realities of
the crisis we face. We will protect borrowers and ensure the integrity of the
financial services industry by combating mortgage fraud head-on. We will protect
investors and our capital markets by vigorously attacking securities fraud. We
will ensure that recipients of federal financial rescue funds do not obtain them
through fraud, or use them for improper purposes. And we will make sure that
federal stimulus funds are well-spent by vigilantly protecting the integrity of
federal procurement and grant processes. By carrying out this mission
aggressively and effectively, we will promote the integrity of our markets,
preserve taxpayers’ resources, and protect the vast majority of consumers,
investors, and companies that play by the rules and adhere to the law.
Remarks By Secretary of Treasury Tim Geithner:
We are emerging from a severe financial crisis and a
deep recession caused, in part, by failures of financial regulation and consumer
and investor protection.
Basic regulations in our financial system that were designed to provide those protections instead allowed many financial institutions to operate completely outside of them with little supervision and oversight.
Institutions were able to shop for the weakest regulator and the weakest form of regulation.
This helped make it possible for millions of Americans to be sold subprime mortgages they could not afford.
This helped give rise to teaser rates on credit cards that lured consumers in and then hit them with big increases.
And this helped financial criminals defraud huge numbers of investors of their savings.
To address these failures we first need to enact comprehensive financial reform that establishes stronger standards, enforces those standards evenly, and creates a more stable, safer financial system.
The bills being drafted in both chambers of Congress would do that by creating stronger system-wide protections and a much stronger regime for protecting consumers and investors.
But for these reforms to work we need more than new rules. We need more than a new system with fewer gaps and greater oversight. We also need a much more aggressive strategy of enforcement.
It’s not enough to prosecute fraud only after it’s become widespread. We can’t wait for problems to peak before we respond.
Too often in the past, even with dedicated people at the federal and state level trying to provide strong protections, resources around enforcement were not mobilized until extensive damage had already been done.
Remember, it took federal banking agencies until June 2007 to reach a consensus on supervisory guidance that imposed even general standards on subprime mortgages. By then it was too late.
President Obama is committed to changing that and bringing a more aggressive, preemptive and proactive approach, across federal agencies and alongside state governments, to stop trends in financial fraud as early as possible.
This task force is designed to help do that.
Now, we’ve already taken some important steps in this direction.
In April we announced an inter-agency approach to combat loan modification fraud by moving early and preemptively in a coordinated manner.
Since then, Treasury’s Financial Crimes Enforcement Network has pursued more than 100 cases, partnering with 31 state attorneys general who are aggressively cracking down on mortgage fraud and are shutting down suspect companies.
State Attorney Generals are shutting down the operations, in part because of our efforts to increase coordination among federal and state agencies. Treasury will play a key role on this new task force.
As part of this, we will work to increase transparency in our financial system, making it more difficult for criminals to access, manipulate or hide illegal assets.
And we will enhance coordination to better analyze and investigate the intelligence we get from financial institutions regarding suspicious activity.
Two years ago, the conventional wisdom was that our financial system was burdened by too many rules and too much enforcement.
Clearly that consensus was wrong.
We need to do everything we can to restore trust and confidence in our financial system and central to that effort is enacting stronger and smarter rules with stronger, more proactive enforcement.
November 18th, 2009 at 9:26 am
‘…as well as 30-year and 25-year sentences for two executives of National Century Financial Enterprises following their convictions on conspiracy, fraud, and money-laundering charges.’
This is not good enough for this crime-
National Century Financial Enterprises -
2009 - The Wall Street Journal reported that Richard Scott, “the former chief executive of HCA Inc,” had formed the non-profit organization Conservatives for Patients’ Rights as part of a “lobbying campaign to derail or modify” President Obama’s health care proposals,…
In 1997, Rick Scott was terminated by Darla Moore. As part of Richard Scott’s severance package from Columbia he was paid $5.13 million and given a five year consulting contract at $950,000 per year.
1997 + 5 = 2002
In 2002 FBI raided the offices of National Century Financial Enterprises in Dublin, Ohio
“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division.
In October 2008- Leo Wise, now at the OCE —stated “Ladies and gentlemen, this is a case of staggering fraud,” ‘It is one of the largest frauds the FBI has ever investigated.
Guess where ALL of Richard Scott’s & Richard Rainwater’s Columbia/ HCA and certain subsidiaries and joint ventures were?
National Century Financial Enterprises, Inc.! (NCFE).
One prosecutor stated ‘…’NCFE- the largest corporate fraud investigations involving a privately held company and no one has ever heard of.’
NO ONE HAS EVER HEARD OF? (The largest corporate fraud investigation…)
Why is that?
Richard Rainwater was GW Bush’s ex- partner with the Rangers.
October 2008, Leo Wise now at the OCE office prosecuted the CEO and co-founder of National Century Financial Enterprises - CEO Sentenced to 30 Years in Prison
12 Executives/co-Founders already found guilty-
December 18, 2008, almost one month before GW Bush leaves office- the last person to stand trial, the ONE and ONLY acquittal- James K Happ!
Jurors stated ‘PROSECUTOR DID NOT DO HIS JOB’-
Prosecutors’ case fell short juror says-National Century fraud case produces 1st and only acquittal The “not guilty” verdicts that came in federal court yesterday were not so much a vindication of the last National Century Financial Enterprises executive to stand trial, a juror said.
Instead, they were more a belief that federal prosecutors had not done their job, …
“He very well may have been guilty. A lot of us thought he was,” said the juror who wouldn’t give his name…
While Richard Scott was at Columbia in 1997 - James K Happ was CFO of Columbia Homecare Group, Inc.
James K Happ, only acquittal at National Century Financial Enterprises, Inc‘s who just so happened to be the CFO of Columbia Homecare Group.
Leo Wise now at the OCE what happened? Jurors stated ‘PROSECUTOR DID NOT DO HIS JOB’-