FBI Moving to Address Financial Fraud Cases

In the aftermath of the September 11 attacks, the Federal Bureau of Investigation increased the resources and number of agents dedicated to national security concerns. Much of this increase occurred at the expense of agents and resources dedicated to the investigation of white collar crime. This has left the FBI ill equipped to meet the demand for white collar investigations in the aftermath of the financial crisis.

Since the FBI reassigned staff from criminal investigation to national security, the number of all types of criminal cases, which the Bureau has brought to the Justice Department for prosecution, has fallen. Since 2001 such referrals have sunk by 26%. Moreover, the impact on white collar referrals for prosecution is even more pronounced. A research group at Syracuse University identified a decline of 50% in overall white collar prosecutions originating with the FBI.

In some cases victims of white collar crime have turned to state and local authorities for investigation. Moreover, some have turned to private investigators or accounting firms to perform an investigation and package the results before contacting a law enforcement agency.

To address the decline in white collar prosecutions, the FBI is planning to double the number of agents assigned to investigate this type of crime. It is likely that the Bureau will hire new agents to meet this optimist plan. Moreover, some members of Congress are calling for increased funding for the FBI to finance white collar criminal investigations.

Next year may see the Justice Department making white collar criminal prosecution an emphasis area. Moreover, DOJ may respond in a manner similar to the savings and loan crisis of the 1980’s and the Enron type scandals by establishing a national task force.

For a further discussion of the issue, please see The New York Times, “F.B.I. Struggles to Handle Financial Fraud Cases,” October 19, 2008.

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.