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Scant criminal prosecution

In crimes of fraud, you may never see justice

If you want to see a criminal prosecution of con artist who scammed you, you face an uphill battle.

For people in law enforcement, going after a con artist is rarely a priority. Terrorism and violent crimes take precedence—few people would argue with that. But run-of-the-mill thefts, robberies and drug violations are much more likely to be prosecuted than fraud.

This is true even though fraud costs society far more than other non-violent crimes. Insurance fraud alone costs about $30 billion per year, according to the National Insurance Crime Bureau. Add in Internet fraud, occupational fraud and identity theft, and the cost of cons skyrockets.

By contrast, the value of all property reported stolen in 2011 was $15.6 billion, according to the FBI. The total amount of money taken in bank robberies during 2011 was $38 million—an average of about $7,500 per incident.

But bank robberies and property crimes are more likely to be investigated and chosen for criminal prosecution than fraud. Why? They’re easier.

Fraud is difficult to prove

Investigating fraud often requires forensic accounting expertise—the ability to decipher financial documents and follow a paper trail. Many local police departments do not have this expertise. Financial investigations are generally handled by special units in state police departments or prosecutors’ offices. If the crimes cross state lines they may be investigated by the FBI.

The United States Department of Justice publishes a pamphlet called Rights, Roles and Responsibilities—A Handbook for Fraud Victims Participating in the Federal Criminal Justice System. Here’s what it says about fraud cases:

“Fraud crimes can be extremely difficult to investigate and prosecute because of a number of factors:

  • Violation of multiple federal laws
  • Difficulty in identifying and locating the defendant
  • Finding the defendant’s financial assets for possible seizure or forfeiture
  • Coordination among multiple federal jurisdictions and law enforcement agencies in cases where fraudulent acts are committed across jurisdictions

Each factor can cause a significant delay in obtaining the evidence needed to make arrests or secure a conviction.”

Then, if these cases do go to court, they have little “jury appeal.” While accountants are droning on about financial data, members of the jury may be zoning out. It’s hard to convict someone “beyond a reasonable doubt” when the jury is bored by the testimony.

Prosecutors decide which cases to try

In state court, cases are tried by prosecutors or district attorneys. In federal court, they are tried by United States attorneys. All of these prosecutors have wide latitude in deciding which cases to try. If they don’t want to pursue a case for any reason, they can decline a criminal prosecution.

Which cases actually go to trial? Usually the cases that prosecutors are sure they can win. Winning is important, because in 47 states prosecutors are elected. That’s how they keep their jobs. “The political pressures on prosecutors has been said to lead to a subtle shift away from the prosecutor’s goal of ‘doing justice’ and an increased focus on conviction rates,” says Ric Simmons, assistant professor of law at Ohio State University. “Prosecutors frequently campaign on their conviction rates.”

This can be a problem. Here’s what Kenneth Bresler, a lawyer and author, wrote in the Georgetown Journal of Legal Ethics:

“The real-world harm is two-fold. A prosecutor protective of a ‘win-loss’ record has an incentive to cut constitutional and ethical corners to secure a guilty verdict in a weak case—to win at all costs. A prosecutor who counts convictions also has a countervailing incentive to drop weak cases. The prosecutor may decline, dismiss or otherwise refuse to try cases that, although supported by probable cause and sufficient evidence to convict, would nonetheless be difficult cases in which to secure convictions.”*

United States attorneys do, in fact, frequently decline to bring a criminal prosecution federal court, according to the Transactional Records Access Clearinghouse (TRAC), a research organization affiliated with Syracuse University. From fiscal year 2000 to fiscal year 2002, TRAC found, investigative agencies recommended that federal criminal charges be brought against slightly more than 140,000 individuals each year. In approximately 45,000 of these cases each year—32%—U.S. attorneys declined to prosecute.

The researchers’ data analysis is not encouraging for victims of fraud. “Federal prosecutors in recent years have turned down slightly more than one out of five of all drug referrals,” TRAC reports. “But when it came to white-collar crimes, more than half of all referrals were declined.”

There’s more bad news. Despite the financial shenanigans that led to the world economic collapse, criminal prosecutions for financial fraud continue to drop. As of 2011, TRAC reported that federal prosecutions were down 28.5% from 5 years prior and 57.7% from 10 years prior.

Report the crime anyway

When you’re the victim of fraud, Lovefraud recommends that you report the crime. The chances that you’ll see justice done are slim, but if you don’t make a report, there’s no chance of justice at all.

Plus, if you’ve been scammed by a sociopath, you’re probably not his first victim. Your report may be the one that finally enables the authorities to haul him in. Call your local police department. If they can’t help you, they’ll refer you to an agency that can.

For Internet crimes, file a complaint with the Internet Crime Complaint Center. IC3 has an automated complaint grouping system  which enables analysts to find similar complaints against particular individuals, groups or businesses which can be compiled into a case for criminal prosecution.

Nothing happens in the criminal justice system until someone makes a complaint. If more people come forward, law enforcement agencies may start doing something about the devastating problem of fraud.

* 9 Geo. J. Legal Ethics 537, Winter 1996. Copyright © 1995 by the Georgetown Journal of Legal Ethics; Kenneth Bresler


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