Operation Broken Trust, a multi-force offensive against financial and investment fraud, has pushed forward on many fronts since its rollout four months ago. It’s been an epic battle, one in which the consequence of failure would have been economic catastrophe.
In an Associated Press article written by John Christoffersen, U.S. Attorney David Fein stated:
“Clearly there is a need for vigorous securities fraud investigation and enforcement, now more than ever. Criminal activity around our capital markets has increased, and mortgage fraud, investor fraud, securities fraud and corporate fraud schemes have devastated honest investors and eroded public confidence in the capital markets.”
The Financial Fraud Enforcement Task Force, an interagency arm established by President Obama in November 2009 to investigate and prosecute financial crimes, instituted Operation Broken Trust back in August of this year. According to Attorney General Eric Holder in the Department of Justice’s press release, this innovative initiative “has involved enforcement actions against 343 criminal defendants and 189 civil defendants for fraud schemes that harmed more than 120,000 victims throughout the country.”
The DOJ’s official press release puts the damage at nearly $10.4 billion. “These are staggering, staggering numbers,” Holder said at a recent press conference, as he stood flanked by the heads of numerous other agencies involved, including the FBI.
The FBI’s website states that the Bureau “has observed a steady increase in investment frauds, particularly Ponzi and market manipulation schemes. Since January 2009, we’ve opened more than 200 Ponzi cases, many with $20 million-plus losses.”
The DOJ’s official press release states that, “Operation Broken Trust was conducted in conjunction with various Department of Justice components, including the U.S. Attorney Offices, the FBI, the Criminal and Civil Divisions of the U.S. Trustee Program, as well as the SEC, USPIS, the CFTC, IRS CI, the Federal Trade Commission, the U.S. Secret Service, and the National Association of Attorneys General.”
In comment to this unprecedented collaboration between regulatory agencies and law enforcement, FBI Executive Assistant Director Henry said on the Bureau’s website, “Together, we are smarter. Together, we are stronger. Together, we will continue to seek out those who look to profit at the expense of the hard-working men and women of the United States of America.”
With 87 defendants already sentenced to prison time, several of those to more than 20 years, it would appear Operation Broken Trust has resolve.
“With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Attorney General Holder in the DOJ’s press release. “To anyone operating or attempting to operate an investment scam: cheating investors is no longer a safe business plan. We will use every tool at our disposal to find you, to stop you, and to bring you to justice.”
In this seismic economy, and with America’s increasing lack of confidence in an often-dithering Administration, Holder’s bold proclamation should come as refreshing assurance to all.
“Investor confidence is critical to the nation’s economic recovery and relies on the integrity of financial institutions,” said FBI Special Agent-In-Charge Kimberly Mertz in the same Associated Press article by John Christoffersen. But investor confidence is reliant on more than the integrity of financial institutions. It’s reliant on the integrity of our government as well, and Operation Broken Trust is a good move toward restoring America’s faith in that regard.
Source: John Christoffersen, “Feds step up financial probes in Conn.”, Associated Press
Source: DOJ, Official Press Release–Operation Broken Trust
Source: FBI Website, “Operation Broken Trust: Historic Investment Fraud Sweep”