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Investor Fraud Summit Arms Consumers with Information to Protect Retirement Funds and Life Savings
Residents of Rossmoor Retirement Community Provided Ways to Avoid Being Victims

U.S. Attorney’s Office October 09, 2012
  • Western District of Washington (206) 553-7970

SAN FRANCISCO—The Department of Justice and West Coast U.S. Attorneys hosted an Investor Fraud Summit today. The summit was designed to provide consumers with the information they need to protect their retirement income from investment fraud schemes. The summit was held at Rossmoor Retirement Community in Walnut Creek, California. U.S. Attorney Jenny A. Durkan joined the U.S. Attorneys for the Northern, Eastern, Central, and Southern Districts of California; Alaska; and Oregon. Representatives from the U.S. Department of Justice, FBI, and the Securities and Exchange Commission also participated in the event.

“Fraudsters steal more than money. They can rob victims of their dreams of retirement, homeownership, or college for their children. Sadly, we prosecutors often get a case after the money is long gone, and there is little to recover for the victims,” said U.S. Attorney Jenny A. Durkan. “That’s why summits like this one are so important—to educate investors before they make mistakes that can end in heartache.”

“Investor fraud crimes can erode faith in our financial markets, threaten our nation’s ongoing economic recovery, and undermine the fabric of our communities,” said Attorney General Eric Holder. “That’s why protecting the American people from fraud is a top priority for today’s Justice Department. And through the Investor Fraud Summits we announced today, we’ll take our anti-fraud efforts to a new level—by raising awareness about these devastating offenses, educating consumers on how to report suspected fraud schemes, and empowering members of the public to fight back.”

Today’s summit featured West Coast U.S. Attorney’s, as well as representatives from the FBI, the Financial Crimes Enforcement Network, the SEC, Google, and CNBC’s American Greed.

President Obama established the interagency Financial Fraud Enforcement Task Force (FFETF) to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force, chaired by Attorney General Eric Holder, includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the FFETF, please visit: www.stopfraud.gov.

The FBI reports an unprecedented rise in investment fraud schemes involving thousands of victims and staggering losses. Since 2011, the Justice Department’s Criminal Division and 85 U.S. Attorneys’ Offices throughout the country have reported that approximately 800 defendants have been charged, tried, pleaded, or sentenced in approximately 500 federal prosecutions involving investor fraud. The total amount swindled from victims driving this time period tops more than $20 billion. This staggering number includes individual cases where the total amount victims lost ranges from tens of thousands of dollars to hundreds of millions and, in some cases, billions in hard-earned savings.

Although the defendants in these federal prosecutions used a variety of tactics and schemes, they often took the same basic approach, guaranteeing high returns and, in many instances, providing falsified investment documents with victims. As a result, victims lost retirement savings, military survivor benefits, family death settlements, and money set aside for college tuition and mortgage payments. Although the Justice Department has already obtained prison sentences for many of these scammers, including one sentence of up to 50 years, for many of the more than 100,000 victims the damage to their families is irreparable.

Since 2011, the SEC, an FFETF partner agency, has charged 887 individuals and entities in 359 actions involving retail investor fraud. Nearly $9.7 billion has allegedly been lost by over 1.2 million investors in those cases.

“Whether a cold-call, polished website, or e-mail solicitation, fraudsters will use every means at their disposal to convince investors to part with their money,” said SEC Director of Enforcement Robert Khuzami. “That is why investor education is so critical—in maintaining financial health as much as physical health, an ounce of prevention is worth a pound of cure.”

Attorney General Eric Holder and the Department of Justice’s U.S. Attorneys’ offices, together with the department’s Criminal and Civil Divisions, representatives from the FBI, Securities and Exchange Commission (SEC), U.S. Department of Treasury’s Financial Crimes Enforcement Network, U.S. Commodity Futures Trading Commission, U.S. Bankruptcy Trustees, the Financial Industry Regulatory Authority, the AARP, and the Better Business Bureau are holding investor fraud summits across the country to help consumers protect their hard-earned money from fraud.

Prior to today’s summit in Walnut Creek, summits were held in Stamford, Connecticut; and Nashville, Tennessee. Three additional summits are scheduled to take place across the country: October 10, in Denver; October 11, in Cleveland; and October 12, in Miami.

In addition to the investor fraud summits across the country, in the coming weeks the Victims’ Rights Committee of the FFETF will host an unprecedented event, in partnership with the Justice Department, the Certified Financial Planner Board and the Foundation for Financial Planning, to offer free financial consulting services to 8,000 victims of an investment fraud scheme that was indicted in Chicago. In that case, the defendant falsely guaranteed high rates of return in a Ponzi scheme that caused the loss of more than $300 million of investors’ funds. Many of the victims were retirees who found the promised high rates of return, coupled with other false promises, an attractive investment alternative for funds in their individual retirement account (IRA), and other retirement-type accounts.

If you think you may be a victim of investor fraud, please call your local FBI office for assistance. To find your local office, please visit: www.fbi.gov/contact-us/field.

For tips on how to spot investor scams and for more information on investor fraud in general, please visit: www.stopfraud.gov.

Press contact for the U.S. Attorney’s Office is Thomas Bates (206) 553-2272 or Thomas.Bates@usdoj.gov.

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