The FBI scores historic investment fraud sweep

Many felt that the case of Jack Abramoff with his gigantic fraudulent investment scam was perhaps the scam of the twenty-first century. It was an extraordinary fraud which harmed many people and took away many millions of their dollars. Mr. Abramoff has served three years of his sentence in prison and is now confined to a half-way house.

But, the Abramoff episode is dwarfed by the gigantic sweep conducted by the Federal Bureau of Investigation from August 16, through December 1, 2010. This action, called the “Operation Broken Trust” involved 231 cases which included a total of 120,000 victims who together, lost $8 billion! The conclusion of the sweep was announced at a press conference on December 6.

There were two goals of this operation. One was to root out and bring to justice, the huge number of fraudulent scams across the nation, and secondly to alert the public of the many phony investment scams.

Operation Broken Trust focused on scams directly targeting individual investors, rather than long-term complex corporate fraud matters. In many instances, these criminals were trusted people within their communities—sometimes neighbors, co-workers, fellow church-goers—who betrayed that trust in order to line their own pockets. And the results were often devastating, with some victims losing their life savings, their homes, their livelihoods. (FBI Operation Broken Trust-Dec.6,2010)

They also announced they have noted an increase in the past few years, of investment fraud cases, especially those Ponzi type cases and market manipulation schemes. They have opened more than 200 Ponzi cases since 2009. By their current case load they, state that the 5 hot spots for such schemes are: Los Angeles, New York, Dallas, Salt Lake City, and San Francisco. Yet they are quick to warn investors that they can, and do, happen anywhere.

Of the sweep involved in the “Operation Broken Trust”, there have already been eighty-seven people sentenced to prison terms, some of which were more than twenty years.
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“Securities and investment frauds are serious offenses which have brought financial ruin to many citizens. Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money,” said Rick Raven, Deputy Chief, IRS Criminal Investigation. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture with our law enforcement partners to put a stop to this and other types of white collar fraud.” (FBI press release- 12/06/2010)

Anyone who is involved in investments, small of large, needs to be kept aware of the myriad scams and schemes which are presently in operation. And the FBI has a page filled with warnings and good advice for those who are read more on examiner.com