Attorney General Eric Holder today told the wealthy Florida community where Bernard Madoff’s Ponzi scheme hit hard that financial fraud is among the “greatest and most glaring threats” to the U.S. economy.
Palm Beach was “ground zero” for Madoff’s $65 billion scam, Holder said in a speech at the Forum Club of the Palm Beaches in West Palm Beach. The Madoff scheme is the biggest investor fraud in U.S. history.
“The simple truth is that financial crimes have become all too common,” Holder said in prepared remarks. “And the consequences of these schemes and scams are real, as this community knows all too well. ”
Late last year, President Barack Obama signed an executive order that created an interagency task force to fight financial crime. The Attorney General said the Financial Fraud Enforcement Task Force is the “cornerstone” of the Justice Department’s efforts to combat mortgage fraud, securities fraud, financial discrimination and Recovery Act and rescue fraud.
“To those who see victimization of others as an avenue to wealth, take notice: If you fabricate a financial statement, if you propagate an investment scheme, if you are complicit in an act of financial fraud, you are writing your ticket to jail,” Holder said.
The fiscal year 2010 DOJ budget signed into law last month includes funds for 43 positions in U.S. Attorney’s offices to help combat financial fraud. Congress set aside $7.5 million in the budget for U.S. Attorney’s offices to pursue bankruptcy, mortgage fraud, affirmative civil enforcement and other white collar crimes.
The U.S. Attorney’s offices received $2.4 million through the fiscal year 2009 omnibus budget to fight economic crimes, according to a DOJ spokesperson. Congress allocated an additional $10 million to the U.S. Attorney’s offices in the fiscal year 2009 supplemental budget to fight financial fraud, the spokesperson said. The supplemental funding does not expire until fiscal year 2011. DOJ was able to hire 76 new Assistant U.S. Attorneys to handle financial fraud cases with the fiscal year 2009 funds, according to the spokesperson.
The budget also includes money for 50 new FBI agents to fight mortgage fraud and work on economic recovery investigations. The FBI received almost $75.2 million from Congress to combat white collar crime, an increase of about $25.5 million.
“This budget represents the largest-ever, single-year enhancement to support and expand the Justice Department’s financial fraud programs,” Holder said. “This will allow for additional FBI agents, prosecutors and support staff to aggressively pursue mortgage fraud, corporate fraud and other economic crimes.”
This post was updated from an earlier version.