NEW YORK (
TheStreet) -- In a wide-ranging sweep called "Operation Broken Trust," federal officials say they have netted 532 people who allegedly defrauded investors out of $8.3 billion.
In a speech on Monday, U.S. Attorney General Eric Holder said the Justice Department and an array of other federal authorities have taken enforcement action against 532 criminal and civil defendants since the operation began on Aug. 16. Holder said those defendants targeted 120,000 victims, defrauding them of "thousands - and sometimes millions - of dollars."
"Staggering numbers," said Holder. "These losses represent hard-earned money and even life savings."
Holder was joined by top officials of the Federal Bureau of Investigation, the
Securities and Exchange Commission, the Postal Service, the Internal Revenue Service and the
Commodity Futures Trading Commission, all of which took part in the sweep, as did the Federal Trade Commission, the Secret Service, and the National Association of Attorneys General. The agencies are part of a financial fraud task force created by President Obama in November 2009.
The announcement represents an effort on the part of federal officials to make up for huge lapses during the financial crisis. The SEC, for instance, has been harshly criticized for missing Ponzi schemer Bernard Madoff, who robbed investors of billions of dollars. Chairman Mary Schapiro, who took over the job in 2009, has
vowed to run a tighter ship.
Holder gave examples of the cases examined by the task force, in which naïve investors trusted their neighbors, community members and friends who, in turn, allegedly swindled them. He said one man in Texas targeted fellow church-goers, telling them his success in
foreign exchange trading was "a blessing from God." A former police officer in Ohio solicited investments from active and retired police officers and firefighters.
The attorney general said dozens of the cases have resulted in prison time for the perpetrators, including one sentence of 85 years.
"With this operation, the task force is sending two messages," said Holder. "A message 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 a second message to anyone operating or attempting to operate an investment scam: we will use every tool at our disposal to find you, to stop you, and to bring you to justice. Cheating investors out of their earnings and savings is no longer a safe
business plan."
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