WEST PALM BEACH -- In an undisguised attempt to draw the nation’s dialogue away from the Christmas bomber debacle, Attorney General Eric Holder has launched a war on economic crime, warning that financial attacks from within can be just as destructive as any terror plot.
Acknowledging “recent failures” regarding ensuring the safety of the American people, the nation’s chief law enforcement officer did not shy away from the fact that “we are at war.”
“[T]he protection of our national security is and will remain our top priority, and we will use every component of American power to keep the American people safe,” he added with emphasis in his address last Friday to the Forum Club of the Palm Beaches.
But after that brief mention, Holder pressed on to his fresh subject – that the nation cannot “ignore the fact that protecting our economy is an essential component of our larger security goals.”
He further noted that safeguarding the nation’s economic system “must be addressed with the same seriousness and sense of purpose that guide our efforts to protect the American people.”
The change-of-pace remarks in the Sunshine State follows weeks of bad news about the administration’s handling of a Nigerian terrorist’s attempt to blow up a Detroit-bound plane on Christmas Day.
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His lunchtime speech set forth the administration’s initiative to “prevent, prosecute, and punish financial fraud.”
The venue, he said, was appropriate -- in the wake of the disastrous Ponzi schemes of South Floridians Bernie Madoff and Scott Rothstein.
“In times of recession, when every dollar counts and each dollar is counted, financial wrongdoing comes to light,” he said. “Unbalanced books are revealed. Pyramid schemes collapse. We need a bold strategy equal to the challenge – a comprehensive, coordinated plan of action that strikes at the core of financial fraud schemes wherever they may be found.”
“This is precisely what our new, national effort will accomplish. The Department of Justice, working in concert with the White House and a network of government agencies, will use every tool at our disposal – including new resources, advanced technologies and communications capabilities, and the very best talent we have – to prevent, prosecute, and punish financial fraud,” he added.
The cornerstone of the initiative, according to Holder, is a new, interagency Financial Fraud Enforcement Task Force. This Task Force was established by Executive Order of the President. It was launched in December and is led by the Department of Justice.
At the core of the Task Force’s mission, Holder described a more robust and strategic law enforcement effort. “Through this effort, critical information will be shared in real time across the federal government -- and with our state and local law enforcement partners -- so that we can stop fraud schemes in their tracks.”
The chief of the Department of Justice said that he and his team would focus on four key types of financial crime:
- Mortgage fraud -- from the simplest of ‘flip’ schemes to systematic lending fraud in our nationwide housing market;
- Securities fraud -- from traditional insider trading, to Ponzi schemes, to accounting fraud, to misrepresentations to investors;
- Recovery Act and rescue fraud -- including the theft of federal stimulus funds and the illegal use of taxpayer dollars intended to shore up our financial institutions; and
- Financial discrimination -- including predatory lending practices in minority communities and the sale of financial products that exploit the elderly and disadvantaged.
Holder acknowledged that the West Palm Beach area was home to a large number of Madoff victims.
“The consequences of these schemes and scams are real, as this community knows all too well,” he said. “Palm Beach is, in many respects, ground zero for the $65-billion Ponzi scheme perpetrated by Bernard Madoff -- the largest investor fraud case in our nation’s history.”
Holder pointed out that the last year was one of the worst years on record for financial crimes, noting Allen Stanford, Tom Petters and, most recently, Fort Lauderdale attorney Rothstein, who is alleged to have contrived a $1 billion investment fraud.
Stanford is accused of running an $8 billion scheme, while Petters was convicted on 20 counts of fraud.
Striking a note very similar to promises made in the national security arena, Holder said: “Through this effort, critical information will be shared in real time across the federal government -- and with our state and local law enforcement partners -- so that we can stop fraud schemes in their tracks.”
Holder acknowledged what many in the audience already knew -- that the government would be hard put to recover all of the money that Madoff defrauded from his clients.
“And as a result of his crimes, too many people who once dreamed of retirement now fear that they will become burdens upon their families,” he said. “Too many who once looked forward to the future now fear it. Too many promises can no longer be kept -- promises made to charities and schools, to churches and synagogues, to children and grandchildren.
“The ripple effect of Mr. Madoff’s greed and deception is as breathtaking as it is heartbreaking,” he added.
Holder told the audience that the recently enacted Department of Justice budget represents the largest ever single year enhancement to support and to expand the Justice Department’s financial fraud programs. “This will allow for additional FBI agents prosecutors and support staff to aggressively pursue mortgage fraud corporate fraud and other economic crimes,” he said.
“There is little doubt that our economy is now emerging from a financial crisis that has gripped the country over these past few months,” Holder concluded. “I’m confident that we can restore confidence that we can punish wrongdoing and that we can help get our economy back on track.”
See Video: Attorney General Eric Holder discusses his war on economic crime - Click Here Now
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