US creates new financial fraud task force
Posted: 18 November 2009 0607 hrs

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WASHINGTON: US authorities announced on Tuesday the creation of a new interagency task force to crack down on financial fraud, saying its mission was to prevent "another meltdown".

President Barack Obama's new Financial Fraud Enforcement Task Force replaces a corporate fraud task force established in 2002 following scandals at Enron and other major firms.

The task force, led by the Justice and Treasury departments, is aimed at investigating and prosecuting mortgage, securities and corporate fraud, as well as recovering funds for victims.

"This task force's mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening," Attorney General Eric Holder said in announcing the effort.

"We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives."

More than 20 federal agencies will be part of the task force, including the FBI, the Federal Trade Commission and the US Postal Inspection Service.

"Through the Financial Fraud Task Force, we are making clear that the Obama administration is going to act aggressively and proactively in a coordinated effort to combat financial fraud," said Treasury Secretary Timothy Geithner.

"It's not enough to prosecute fraud only after it has become widespread. We can't wait for problems to peak before we respond.

"We're seeking comprehensive financial reform to create a more stable, safer financial system and stepping up our enforcement strategy. Doing so will help to stop emerging trends in financial fraud before they’re able to cause extensive, system-wide damage to our economy."

Geithner acknowledged that the government "came into this crisis without the basic set of tools we needed in order to contain the damage".

"That's why we're working so hard with the leadership of Congress trying to make sure we get in place a set of tools and rules of procedures to make sure that we can manage the failure," he added.

The Justice Department said on Tuesday that 7,641 people had pleaded guilty to financial crimes in 2009 in the United States.

Meanwhile, the SEC said it had returned about 6.6 billion dollars to unhappy investors since 2002.

The task force was set up just hours after authorities announced that more than 14,700 Americans with previously undisclosed offshore bank accounts came forward to settle back taxes after an amnesty offer.


- AFP/yb/so