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Financial crimes targeted by FBI

Probes lead to 3,000 convictions

- Associated Press - Monday, February 27, 2012

The FBI said Monday that its probes of financial crime last year led to more than 3,000 convictions and over $12 billion in court-ordered restitution as agents attacked insider trading, Ponzi schemes and Medicare fraud in high-dollar scams that victimized thousands of investors and the government.

In a press briefing that amounted to a warning to the business community generally and to Wall Street in particular, the bureau released video and wiretaps from a few of its undercover operations targeting complex financial crime.

The bureau also offered up a new public service announcement done by actor Michael Douglas, who in the movie "Wall Street" portrayed a greedy corporate raider operating on the wrong side of the law.

"Our economy is increasingly dependent on the success and integrity of the financial markets," Mr. Douglas said in the PSA announcement. "If a deal looks too good to be true, it probably is. For more information on how you can help identify securities fraud, or to report insider trading, contact your local FBI office."

FBI Assistant Director Kevin Perkins, head of the bureau's criminal investigative division, said the law enforcement agency has shifted its focus on financial crime away from low-dollar cases and has hired 250 forensic accountants who hunt for criminal activity in financial records.

Mr. Perkins said the FBI changed its approach to financial crime after the Sept. 11 attacks, a "watershed" moment for the bureau that forced the bureau to refocus its resources on large-scale investigations and partnerships with other federal agencies.

Before Sept. 11, the FBI was involved in about 1,800 cases that involved losses of less than $25,000. Today, the bureau has only one such case, he said.

FBI Financial Crimes Section Chief Timothy Gallagher said the bureau now operates a financial intelligence center to identify where it needs to send agents to investigate newly emerging threats in financial crime.

Among the FBI's largest conviction numbers and amounts of restitution for 2011:

• Securities and commodities fraud, 394 convictions and $8.8 billion.

• Mortgage fraud, 1,082 convictions and $1.38 billion.

• Health care fraud, 736 convictions and $1.2 billion.

The number of FBI probes is up sharply in some categories of financial crime. For example, securities and commodities fraud investigations have increased by 52 percent since 2008 to more than 1,800 at the end of last year, the FBI reported.

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