Feed: Financial institution fraud investigations increasing, says expert - AggScore: 12.8

Financial institution fraud investigations increasing, says expert

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caption id alignalignleft width170 captionThe number of cases of financial corruption is increasing due to increased oversight by government agencies. Photo Police Times img srchttpcdn2b.examiner.comsitesdefaultfilesstyleslargehash4554corruption3.jpg alt width170 height170 captiondivAs reported by the U.S. news media, the FDIC announced a new initiative to investigate executives, employees and officers of 50 failed banks. The FDIC has put bank executives on notice that when banks fail, civil and criminal actions are a real possibility.The Federal Deposit Insurance Corporation, or FDIC, is a United States government corporation created duringPresident Franklin Delano Roosevelts administrationby the GlassSteagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to 250,000 per depositor per bank.The FDIC insures deposits at 7,895 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs oversight, and manages banks in receiverships failed banks.divThe FDIC and other government enforcementagencies are increasing efforts to punish fraud and other criminal behavior, in much the same way that federal regulators did in the wake of the savings and loan crisis a generation ago. Since 2008, more than 300 financial institutions have failed, but only a few of those failures have led to criminal charges so far.When a task force is created, it will find that crimes were committed, its just a question of how soon, says Ed Tomko, former federal bank fraud prosecutor, and current chair of Curran Tomko Tarskis white collar crime practice group.Tomko led the criminal prosecution of Bert Lance, who was director of the Office of Management and the Budget during the Carter administration. Tomko later directed the Department of Justice Saving and Loan Task Forces in Dallas, Tampa, and Oklahoma City, and currently practices in Dallas.Tomko says that in these investigations, there is tremendous risk for decision makers at banks. In bank fraud cases, there is often little or no controversy as to the acts and who performed them. The key issue is usually whether the target individuals possessed criminal intent at the time. Further, when criminal conduct is proven, the federal sentencing regime provides for lengthy prison sentences.