Hundreds Charged in Investment Fraud Sweep

   WASHINGTON – 12/08/10 - U.S. Attorney General Eric Holder announced on Nov. 6 the results of Operation Broken Trust, a nationwide operation organized by the Financial Fraud Enforcement Task Force to target investment fraud. To date, the operation has involved enforcement actions against 343 criminal defendants and 189 civil defendants for fraud schemes that harmed more than 120,000 victims throughout the country.
   The operation’s criminal cases involved more than $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion.
   Operation Broken Trust is the first national operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.
   In announcing the results of Operation Broken Trust, Holder was joined by FBI Executive Assistant Director Shawn Henry, U.S. Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami, U.S. Postal Inspection Service (USPIS) Chief Postal Inspector Guy Cottrell, Deputy Chief Rick Raven of the Internal Revenue Service Criminal Investigation (IRS-CI), Acting Director of Enforcement Vince McGonagle of the U.S. Commodity Futures Trading Commission (CFTC), and other members of the Financial Fraud Enforcement Task Force.
   The interagency Financial Fraud Enforcement Task Force was established by President Obama to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on Aug. 16, 2010, within a three-and-a-half month period, Operation Broken Trust involved 231 criminal cases and 60 civil enforcement actions. Eighty-seven defendants have been sentenced to prison, including several sentences of more than 20 years in prison.
   “With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” Holder said. “To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan - we will use every tool at our disposal to find you, to stop you, and to bring you to justice.”
   “This operation highlights the scope of this problem, and its impact on individuals from all walks of life,” Henry said. “This one sweep alone involves fraud schemes that harmed more than 120,000 victims. The schemes may change, but the underlying greed does not. Working with our partners, we in the FBI will use all the investigative techniques in our arsenal, including undercover operations, to bring those responsible to justice.”
    Enforcement actions taken as a result of Operation Broken Trust involve a range of different investment fraud schemes, all of which prey directly on the investing public. 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 (FOREX) frauds, business opportunity fraud and other similar schemes. In some instances, operators of these schemes filed for bankruptcy in an attempt to avoid claims by victim-investors.
   “The U.S. Postal Inspection Service has a long tradition of protecting postal customers from these types of investment and Ponzi scams and bringing those responsible to justice,” USPIS Chief Postal Inspector Cottrell said. “The Postal Inspection Service constantly strives to protect our customers and the general public from falling victim to these scams that claim millions of dollars every year.”
   Operation Broken Trust was conducted in conjunction with various Department of Justice components – including the U.S. Attorney Offices, the FBI, the Criminal and Civil Divisions and the U.S. Trustee Program – as well as the SEC, USPIS, the CFTC, IRS-CI, the Federal Trade Commission, the U.S. Secret Service and the National Association of Attorneys General.    As a part of Operation Broken Trust, the task force is making the public aware of resources available to protect against these types of fraud and how to report fraud when it occurs. To learn more about investment scams, how to take steps to protect yourself from scams, or how to report investment fraud if you believe you have been victimized, go to StopFraud.gov. The website includes links to a wide array of task force member resources.
 Source: StopFraud.gov.

Photo by Steve Rensberry (c) 2014