Last month, Attorney General Eric Holder announced the results of Operation Broken Trust, a nationwide operation organized by the Financial Fraud Enforcement Task Force to target investment fraud. According to these results, investment fraud is a virus that has infected our system of finance so thoroughly that no investor is immune from its opportunistic attacks.
The task force is a coordinated effort by the U.S. Department of Justice, the Securities and Exchange Commission, the Internal Revenue Service, the U.S. Postal Inspection Service and the U.S Commodity Futures Trading Commission, to lead an aggressive and proactive effort to investigate and prosecute financial crimes. During its initial three-and-a-half month effort, beginning on August 16, 2010, the task force initiated 211 criminal cases and 60 enforcement actions involving fraud schemes that defrauded more than 120,000 victims. The calculated losses of these victims: $10.5 billion.
The vast scope of financial fraud revealed by the task force's preliminary efforts is shocking, but should not be surprising. Such schemes have flourished for generations in the absence of meaningful efforts to curb their growth. It has been reported, for example, that the FBI slashed its financial fraud work force in the wake of the September 11, 2001 attacks in order to concentrate on terrorism investigations, a necessary focus that had the consequence of leaving victims of fraudsters to fend for themselves. The resulting wild west atmosphere allowed investment schemes to mushroom. Time and again, the task force broke up multi-million dollar scams that had been successfully operating for years without the threat of meaningful criminal or civil liability.
The schemes themselves are wide-ranging, but pursue a singular goal. According to one task force member, "the operators of these schemes often promise high returns to investors, but engage in little to no legitimate investment activity. Such schemes include Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange frauds, business opportunity fraud, and other similar schemes."
Victims of investment fraud should not merely rely on efforts of governmental agencies to seek retribution. Investors who have lost money due to investment fraud can, and should, pursue their own rights. The investment fraud lawyers at Block & Landsman can help evaluate investors' claims of investment fraud and pursue lawsuits or arbitration proceedings that seek to recover their losses. If you would like to consult with the investment fraud lawyers at Block & Landsman, please visit our website for more information.
