FBI Changes Tactics in Fight Against Fraud

The Federal Bureau of Investigation has a caseload of more than 2000 mortgage fraud investigations. This significant number of investigations is straining the resources of the agency. As a result, the FBI will begin fighting fraud using the techniques common to the investigation of non-white collar crime.

Traditionally, the investigation of fraud and white collar illegality has involved the analysis of large numbers of documents and the building of “paper” cases. The investigations involved the review of correspondence handled by those under investigation. In this way the government sought to build large cases in which the evidence implicated those in higher positions with knowledge and direction of the schemes. Such “paper” cases required significant time and resources.

In traditional non-white collar criminal investigation, the FBI has made a series of quicker cases against lower level actors and tried to “turn” them against those in higher positions. If an individual arrested and accused agreed to cooperate, the government would put a body wire on that individual and send him to meet with the higher up target. The theory behind these “quick hit” is to build a chain to the criminal leadership.

The two approaches usually have different results. The “quick hit” non-white collar approach tends to make a greater number of cases, but it usually fails to reach the top of the criminal ladder. The traditional “paper” investigation results in fewer cases, but those that are made tend to involve higher level people with greater potential sentences.

The change in strategy may result in more headlines and increased convictions statistics, but may fail to bring to just those most criminally responsible for mortgage fraud. It would be worthwhile to keep in mind the level of those being convicted as this strategy plays itself out.

For a further discussion of the issue, please see the Daily Business Review, “FBI Streamlines Its Investigative Strategy as Caseloads Soar,” April 2, 2009, p. A2.

About Richard Serafini

Welcome to my blog. I am an attorney and practice in the area of corporate trial work. Areas of particular emphasis are white collar defense, securities litigation, health care litigation, internal investigations, RICO, and financial litigation. I will be posting interesting developments in my areas of interest. I hope that you find this blog helpful and informative.