Unprecedented Partnership Among Criminal, Civil Financial Fraud Enforcement
RICHMOND, Va. – Federal and state officials today announced the creation of the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia.
Below is an overview of the agencies participating in the task force, which will operate in and bring cases through the Eastern District of Virginia:
U.S. Securities and Exchange Commission – Division of Enforcement: The U.S. Securities and Exchange Commission (SEC) is an independent federal agency with primary responsibility for administering and enforcing the federal securities laws. Through its Enforcement Division, the SEC investigates potential securities law violations and prosecutes civil violations in federal court and through administrative proceedings. In addition, the SEC's Enforcement Division works closely with other law enforcement agencies in the U.S. and around the world to ensure criminal prosecutions when appropriate.
U.S. Commodity Futures Trading Commission: The CFTC is an independent agency with the mandate to regulate commodity futures and option markets in the United States. The CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.
The CFTC’s Enforcement Division investigates and prosecutes violations of the federal commodities laws in federal and administrative courts. The CFTC has made it a high priority to engage in cooperative enforcement efforts with federal and state criminal authorities to prosecute persons who violate the federal commodities laws.
Virginia Office of the Attorney General: The Office of the Attorney General is the Commonwealth's law firm. Among its many responsibilities, the Office conducts criminal investigations and prosecutions involving a range of financial issues. It also enforces state laws that protect businesses and consumers when there are violations. The Office of the Attorney General and the U.S. Attorney’s Office have a long history of working together to leverage state and federal laws to provide the most appropriate punishment and biggest deterrence against common threats to public safety in Virginia.
Virginia State Corporation Commission: The State Corporation Commission is a constitutionally-created, independent department of state government with delegated administrative, legislative, and judicial powers. The SCC is vested with regulatory authority over many business and economic interests in Virginia, including utilities, insurance, state-chartered financial institutions, securities, retail franchising, and railroads. It is the state's central filing office for corporations, limited partnerships, limited liability companies and Uniform Commercial Code liens. The SCC’s financial divisions, the Division of Securities and Retail Franchising, Bureau of Financial Institutions, and Bureau of Insurance, have a history of working closely with federal law enforcement agencies to successfully prosecute various forms of financial fraud.
Federal Bureau of Investigation: Corporate fraud remains the highest priority of the FBI’s Financial Crimes Section and the FBI is committed to dealing with this significant crime problem. As of the end of FY 2008, 545 corporate fraud cases are being pursued by FBI field offices throughout the U.S., several of which involve losses to public investors that individually exceed $1 billion. The FBI has focused its efforts on cases which involve accounting schemes, self-dealing by corporate executives, and obstruction of justice.
The Richmond Division observed an increase in Corporate Fraud and Securities and Investment Fraud from 2006-2009. Currently the Richmond Division has 29 pending Corporate Fraud/Securities and Investment Fraud investigations. Corporate Fraud/Securities and Investment Fraud have a significant impact on Richmond’s area of responsibility, as an estimated 900 victims have lost approximately $528 million to perpetrators of this type of fraud. High Yield Investment Fraud in the form of the Ponzi scheme is the most pervasive type of fraud within Richmond’s territory.
U.S. Postal Inspection Service: As one of America’s oldest federal law enforcement agencies, in 1872 the U.S. Congress empowered the U.S. Postal Inspection Service to investigate any crime in which the U.S. Mail is used to further a fraud scheme. The scam can originate in the mail, by telephone, or on the Internet, but it is the use of the U.S. Mail in any phase of the scheme that makes it mail fraud. In the Eastern District of Virginia, mail fraud investigations include fraudulent investment schemes, mortgage fraud, healthcare fraud, and other financially-based crimes. Because it is essential that the public have full confidence that their mail is free from scams, Postal Inspectors preserve its integrity through vigorous law enforcement, public education, and crime prevention efforts.Internal Revenue Service – Criminal Investigation Division: The American system of taxation is based on the premise that all income is taxable (which includes illegally earned income). In many instances, proving that a taxpayer willfully attempted to hide income from the Federal Government is an integral part of proving other criminal activity including fraud, money laundering or Bank Secrecy Act violations. Their methods of proof and investigative activities lead IRS special agents into nearly every legal as well as illegal business in America.
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