With much of the debris from Wall Street’s wreckage having settled, prosecutors at both federal and state levels are engaging a series of cases related to financial fraud throughout the country, reports the New York Times. Attorney generals have set their sights on the scores of alleged fraudsters, with regulators adding to their budgets in order to better combat the recent wave of home loan scams.
While Ponzi artist Bernard Madoff’s guilty plea has been the most significant of talk in the legal town as of late, smaller frauds related to home loans are expected to consume much of federal and state attorney generals’ time. Indictments have been growing for loan and bank officers as well as mortgage brokers, with guilty pleas in Minnesota, Delaware, North Carolina, and Connecticut last week alone.
The Obama administration has already put forth a budget allocating increased resources for FBI agents to investigate potential mortgage wrongdoing, with a 13 percent increase for the Securities and Exchange Commission.
Some fear that the increase in enforcement efforts will lead to indiscriminate accusations. Says attorney Daniel M. Petrocelli, “It’s going to be open season. You’ll see a lot of indictments down the road, and you’ll see a lot of prosecutions that rely on vague theories of ‘deprivation of honest services.’”