Federal officials target investment fraud in nationwide operation

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Atty. Gen. Eric Holder and other federal officials announced Monday that the largest-ever nationwide crackdown on investment fraud has led to criminal or civil charges against more than 500 people since August in cases that defrauded thousands of people out of a total of $10.5 billion.

Called Operation Broken Trust, the initiative has targeted a broad array of investment fraud, including Ponzi schemes and scams that preyed on immigrants, the disabled and religious groups, the Justice Department said. The effort was conducted by the Obama administration’s Financial Fraud Enforcement Task Force, a multi-agency group including the FBI, Treasury Department and the Securities and Exchange Commission set up last year to pursue criminals who took advantage of the financial crisis.

‘With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” Holder said. “To the public: Be alert for these frauds, take appropriate measures to protect yourself and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: Cheating investors out of their earnings and savings is no longer a safe business plan -- we will use every tool at our disposal to find you, to stop you and to bring you to justice.”

The operation began in August and has resulted in 231 criminal cases and 60 civil cases, many of which have been previously announced. They included the case against Juan Rangel of Downey, who pleaded guilty in October of operating a Ponzi scheme targeting Spanish speakers; and one against a Dallas man, Joseph Blimline, who pleaded guilty in August to criminal charges related to his role in an oil and gas investment Ponzi scheme that allegedly bilked 7,700 investors out of more than $485 million.

The Justice Department estimated there were more than 120,000 people who lost money in the cases. The losses by victims in the criminal cases was about $8.4 billion, and investors involved in the civil cases lost about $2.1 billion.

-- Jim Puzzanghera