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Financial Crime Investigation: A Low Priority for Bush

By TChris

Bump and Update (TL): White Collar Crime blog weighs in with good suggestions. I'm with TChris, let's reduce the number of agents assigned to drug investigations.

Original Post by TChris 10/18/08

The Bush administration's top law enforcement priorities have been terrorism and (especially of late, it seems) voter registration fraud. The investigation of financial crime has suffered.

Since 2004, F.B.I. officials have warned that mortgage fraud posed a looming threat, and the bureau has repeatedly asked the Bush administration for more money to replenish the ranks of agents handling nonterrorism investigations, according to records and interviews. But each year, the requests have been denied, with no new agents approved for financial crimes, as policy makers focused on counterterrorism.

[more ...]

According to previously undisclosed internal F.B.I. data, the cutbacks have been particularly severe in staffing for investigations into white-collar crimes like mortgage fraud, with a loss of 625 agents, or 36 percent of its 2001 levels.

Justice Department data, which include cases from other agencies, like the Secret Service and Postal Service, illustrate the impact. Prosecutions of frauds against financial institutions dropped 48 percent from 2000 to 2007, insurance fraud cases plummeted 75 percent, and securities fraud cases dropped 17 percent.

This is worrisome:

Some F.B.I. officials worry privately that the trillion-dollar federal bailout of the financial industry may itself become a problem because it contains inadequate controls to deter fraud.

This would be a good time to reassign agents from drug units to fraud investigation. Are you listening, Barack Obama?

Full post as published by TalkLeft on October 19, 2008 (boomark / email).