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Financial Crime Investigation: A Low Priority for Bush

By TChris, Section Crime Policy
Posted on Sun Oct 19, 2008 at 05:27:00 PM EST
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Bump and Update (TL): White Collar Crime blog weighs in with good suggestions. I'm with TChris, let's reduce the number of agents assigned to drug investigations.

Original Post by TChris 10/18/08

The Bush administration's top law enforcement priorities have been terrorism and (especially of late, it seems) voter registration fraud. The investigation of financial crime has suffered.

Since 2004, F.B.I. officials have warned that mortgage fraud posed a looming threat, and the bureau has repeatedly asked the Bush administration for more money to replenish the ranks of agents handling nonterrorism investigations, according to records and interviews. But each year, the requests have been denied, with no new agents approved for financial crimes, as policy makers focused on counterterrorism.

[more ...]

According to previously undisclosed internal F.B.I. data, the cutbacks have been particularly severe in staffing for investigations into white-collar crimes like mortgage fraud, with a loss of 625 agents, or 36 percent of its 2001 levels.

Justice Department data, which include cases from other agencies, like the Secret Service and Postal Service, illustrate the impact. Prosecutions of frauds against financial institutions dropped 48 percent from 2000 to 2007, insurance fraud cases plummeted 75 percent, and securities fraud cases dropped 17 percent.

This is worrisome:

Some F.B.I. officials worry privately that the trillion-dollar federal bailout of the financial industry may itself become a problem because it contains inadequate controls to deter fraud.

This would be a good time to reassign agents from drug units to fraud investigation. Are you listening, Barack Obama?

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    Financial Crime Investigation: A Low Priority for Bush | 5 comments (5 topical)

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    What is the total monetary (none / 0) (#1)
    by ThatOneVoter on Sat Oct 18, 2008 at 09:10:44 PM EST
    value of the drug trade in the US? Surely it's a fraction of $700 billion.. ahem.

    What's a little fraud here or there? (none / 0) (#2)
    by Fabian on Sat Oct 18, 2008 at 10:47:24 PM EST
    Don't want to create a climate hostile to business!

    NPR did a bit on mortgage failures and what caused them.  In Cleveland they found a mixture of the usual suspects - people who took on more debt than they should have (low introductory rates! as opposed to flipping), predatory lending and fraud.

    The fraud?  It's popular with some savvy organized criminals who have expanded into real estate from more "traditional" illegal enterprises.  Safer, too.  No guns needed and the penalties are lighter.  Plus the use of straw buyers (and crooked appraisers and...) makes it easier to muddy the trail.

    Moral of the story: ???

    But..! There's a WAR on drugs--and no war on (none / 0) (#3)
    by jawbone on Sun Oct 19, 2008 at 06:34:38 PM EST
    financial fraud and malfeasance.

    but wait! (none / 0) (#4)
    by cpinva on Sun Oct 19, 2008 at 07:02:09 PM EST
    everyone knows that between the terrorists and the drug cartels, the US is facing catastrophic economic disaster! it will require nearly a trillion dollars in tax dollars to bail us out of this nightmare, all the result of osama bin laden allying himself with the cali cartel, and exporting explosive cocaine into america!

    ok, i made all that up.

    what purpose would the DEA have for existing (assuming it actually has a purpose for existing!), absent the "war" on drugs? anyone, anyone, buehler, buehler? as well, the "war" on drugs fuels the whole enforcement/judicial/penal industry, worth billions annually. this industry will not go down without a fight!

    let's face it, it's a lot easier (and safer) to bust some 18 year-old with an ounce of pot, then it is to after smart guys for financial fraud, and actual real terrorists (they might shoot back!).

    Makes sense.... (none / 0) (#6)
    by kdog on Mon Oct 20, 2008 at 11:49:10 AM EST
    the Bush regime has been a finacial crime in and of itself.

    Financial Crime Investigation: A Low Priority for Bush | 5 comments (5 topical)

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