Spurred by rising public anger, federal and state investigators are preparing for a surge of prosecutions of financial fraud. Across the country, attorneys general have already begun indicting dozens of loan processors, mortgage brokers and bank officers. Last week alone, there were guilty pleas in Minnesota, Delaware, North Carolina and Connecticut and sentences in Florida and Vermont — all stemming from home loan scams.
With the Obama administration focused on stabilizing the banks and restoring confidence in the stock market, it has said little about civil or criminal charges at the federal level. But its proposed budget contains hints that it will add to this weight of litigation, including money for more F.B.I. agents to investigate mortgage fraud and white-collar crime, and a 13 percent raise for the Securities and Exchange Commission.
. . . “It’s clear that [Attorney General Eric Holder] and other top-level members of the Obama administration want to seize the opportunity to send a message of zero tolerance for mortgage fraud,” said Connecticut’s attorney general, Richard Blumenthal, who attended a meeting with Mr. Holder and a number of state attorneys general last week in Washington. “The only question is when and how they will do it.”
but what about the big fish?
With all the state activity and portents of a new resolve at the federal level, lawyers who defend white-collar clients sense growing momentum to perp walk and prosecute executives involved in the mortgage meltdown. “It’s going to be open season,” says Daniel M. Petrocelli, a defense lawyer whose clients include Jeffrey K. Skilling, the former chief executive of Enron. "You’ll see a lot of indictments down the road, and you’ll see a lot of prosecutions that rely on vague theories of ‘deprivation of honest services.’ "
Many financial executives have hired lawyers in the last few months, either through in-house counsels or, more discreetly, on their own, several lawyers who defend white-collar clients said. While assorted Wall Street executives have been prosecuted over the years, any concerted legal attack on the financial sector would have little precedent.
Could this be a stimulus designed for the white collar criminal law bar?
Speaking for me only
