Remarks as prepared for delivery.
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 Act of 2009, was an important bipartisan endorsement of the work we will undertake in 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.
I now turn it over to Secretary Donovan.