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Archive for the ‘White Collar Crime’ Category

Feds to target Financial Fraud

Sunday, January 25th, 2009

According to reports in the New York Times, the Senate is looking for more funding to increase the government’s ability to detect fraud by white-collar criminal.  See the story below, from the New York Times.

Senators Seek More Funds to Fight Financial Fraud

The New York Times

January 22, 2009

Charles E. Schumer, the Democratic senator from New York, and Richard C. Shelby, a Republican senator from Alabama, introduced new spending legislation on Thursday designed to increase enforcement and detection of white-collar crime in the wake of the $50 billion fraud allegedly perpetrated by Bernard L. Madoff.
Mr. Schumer (pictured above), who is vice chairman of the Senate Democratic caucus, and Mr. Shelby, the ranking member of the Senate Banking Committee, propose adding $110 million to the budgets of the Justice Department, the Securities and Exchange Commission and the F.B.I. to help crack down on Wall Street fraud.
Under the new legislation, known as the Supplemental Anti-Fraud Enforcement (“SAFE”) Markets Act, the F.B.I. would get the bulk of the funds, $80 million, to hire 500 new agents in its white-collar crime division.
The S.E.C. would receive $20 million to hire 100 new enforcement officials, and the Justice Department would get $10 million for 50 new assistant U.S. attorneys.
The legislation would have to pass Congress and will likely be debated by lawmakers in the annual appropriations hearings, which are expected to start next month.
The S.E.C. admitted in December that, despite being repeatedly tipped off about potential fraud, the agency failed to detect Mr. Madoff’s wide-ranging Ponzi scheme.
“Our white collar crime divisions are understaffed, underfunded, and overwhelmed,” Mr. Schumer said in a statement.
“Fundamentally, our current economic crisis is one of confidence, which underpins our entire financial system. This foundation of trust has been badly shaken by greed, but is further eroded by fraud. In order to restore confidence, those who perpetrate fraudulent acts must be brought to justice,” Mr. Shelby added.
The senators noted that, by some published estimates, the Bush administration failed to replace at least 2,400 F.B.I. agents who were transferred to counter-terrorism squads. As a result, the F.B.I’s white collar crime units are currently down at least 625 agents from pre-9/11 levels, a reduction of 36 percent.
–Zachery Kouwe