This week the feds announced their nationwide financial fraud crackdown. Taking the lead from Attorney General Eric Holder, U.S. attorney offices across the country made public announcements touting results of the DOJ’s “Operation Broken Trust.”
In all, prosecutors brought enforcement actions against 343 criminal defendants and 189 civil defendants “for fraud schemes involving 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,” the official press releases declared.
Not bad for an operation that just started Aug. 16.
But a closer look at the numbers shows that they rely on cases filed well before the operation was launched.
The Northern District, which has been much criticized for its lack of big ticket white-collar cases in recent years, offered up three cases it says were part of the operation.
“In the Northern District of California, five defendants have been charged with financial crimes in three cases that have been filed as a part of this operation.
Those defendants are alleged to be responsible for more than $33.5 million in losses,” the press release from U.S. Attorney Melinda Haag’s office read.
Among those cases is that of Nicole Song, a financial and real estate advisor who duped an older woman into refinancing multiple properties and then used the proceeds for personal gain. That case was charged in December 2009, and a plea deal was on the books in May – months before Operation Broken Trust existed. She was, however, sentenced in September, after the initiative’s launch.
“I’m not familiar with that initiative and those terms,” said San Francisco defense attorney Brian Getz, who represented Song. “This is an example of the United States Attorney’s Office making an announcement nunc pro tunc,” the attorney said.
A glance at press releases from around the country show a similar pattern – some cases touted as part of Operation Broken Trust were charged after the Aug. 16 initiation date, while others existed long before.
The U.S. attorney’s office in San Diego, for instance, highlights five cases as part of its contribution to Broken Trust. Two of those were charged before the August launch date of the initiative.
A spokesman for the U.S. attorney’s office in San Francisco referred questions to Main Justice, which organized the media outreach on the effort.
A New York Times’ Dealbook quoted an attorney expressing skepticism that all these cases could have materialized in just a few months and suggests DOJ is counting among its stats any case involving financial fraud.
Dealbook also posed a more serious question about the supposed crackdown: “Is anyone in the corner offices of Wall Street’s biggest firms or corporate America’s biggest companies paying any attention to Mr. Holder’s ‘strong message’?”