Operation Broken Trust nails 500 con artists for investment fraud

Operation Broken Trust

U.S. Attorney General Eric Holder announced that Operation Broken Trust has collared more than 500 people engaged in investment fraud schemes. Image: Department of Justice/Wikimedia Commons

Operation Broken Trust is a federal investigation into widespread fraud perpetrated by criminals taking advantage of the financial crisis. The Justice Department announced Monday that Operation Broken Trust has brought criminal and civil charges against more than 500 people. The schemes exposed by the investigation defrauded thousands of investors out of $10.5 billion.

Operation Broken Trust: nationwide fraud sweep

Operation Broken Trust was organized by the Obama administration’s Financial Fraud Enforcement Task Force. At a news conference Monday, Attorney General Eric Holder said the three-and-a-half-month investigation is the first nationwide operation to combat investment fraud schemes that prey on the general public. Holder said 343 people face criminal charges and another 189 are getting slapped with civil suits. Eighty-seven people have already received prison sentences. Several defendants were sentenced to more than 20 years. One was sentenced to 85 years in prison.

Fraudsters prey on vulnerable citizens

Operation Broken Trust investigated more than 120,000 cases of fraud including Ponzi schemes, foreign currency fraud, investment scams and market-manipulation. Holder said the fraudsters targeted communities, churches, immigrants, the elderly and the disabled. According to the Justice Department, many victims were set up by neighbors or fellow church members. A man in Texas ripped off others in his church by telling them his lucrative foreign exchange trades were a “blessing from God.” Another case involved a police officer stealing from fellow cops in a Ponzi scheme. Other victims included a blind man and a bereaved family.

Lessons from Operation Broken Trust

Operation Broken Trust was a joint effort among the Justice Department, the U.S. Postal Service, the Commodity Futures Trading Commission and the Securities and Exchange Commission. Robert Khuzami of the SEC said that while Wall Street banks have gotten the biggest fraud headlines, hundreds of other scams devastate working families and retirees. The lesson to be learned from Operation Broken Trust, Holder said, was that “Cheating investors out of their earnings and savings is no longer a safe business plan.” He also warned the public to be alert for scams, take measures to protect themselves and report to authorities when they think something fishy is going on.

Sources

Wall Street Journal

Los Angeles Times

Washington Post

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