President Obama Signs Kaufman Anti-Fraud Legislation

May 20, 2009 -- Flanked by several Congressional colleagues and a crowd of onlookers, U.S. Senator Ted Kaufman (D-DE) stood beside President Barack Obama May 20 as he signed the Fraud Enforcement and Recovery Act (FERA), legislation to strengthen tools and increase resources available to federal prosecutors to combat financial fraud. Sen. Kaufman introduced FERA - bipartisan legislation that passed Congress this week - in February with Senators Patrick Leahy (D-VT) and Chuck Grassley (R-IA).

"Today marks a turning point for American confidence in our financial system," said Sen. Kaufman said after the signing. "Our law enforcement agents and prosecutors will soon have the resources and training they need to find, prosecute, and jail those who committed financial fraud. Those who illegally lined their pockets and left investors - and millions of Americans - with the devastating consequences, will pay the price."

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FERA will help both to protect Americans from fraud and recover taxpayers' money lost to fraud. It cleared a final hurdle in Congress Monday when the House of Representatives approved FERA, which passed the Senate earlier this month by a vote of 92 to 4.

"While it's a thrill to have my first bill signed by the president, the real gratitude comes from the knowledge that we are answering America's call for accountability under the law," Sen. Kaufman continued. "This bill gives our agents the tools and training they need to send a clear message to the bad actors. But the biggest beneficiaries, by far, are all those who participate in the financial markets and want them to be free and fair."

After September 11th, many FBI agents were rightfully diverted from criminal work to counterterrorism, Kaufman explained, but have never been replaced. As a result, the FBI has just one-quarter the number of agents working on complex financial crime today than they did during the Savings & Loan Crisis of the 1980s. FERA will significantly close that gap at a time when reports of corporate and mortgage fraud are at an all-time high. Law enforcement agencies must also be prepared to deal with any fraud related to the recently passed economic recovery package.

Reports of mortgage and corporate fraud are at an all-time high, and law enforcement expects a significant increase in fraud in connection with the economic recovery efforts. The Fraud Enforcement and Recovery Act will rebuild the nation's capacity to investigate and prosecute the mortgage and corporate frauds that have undermined the economy and hurt working people.

* FERA authorizes resources for the Department of Justice, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the U.S. Secret Service, and the Inspector General for the Department of Housing and Urban Development to hire additional fraud agents, analysts, investigators, prosecutors, and support staff to combat fraud.
* FERA makes important improvements to fraud and money laundering statutes to strengthen prosecutors' ability to combat the growing wave of fraud.
* FERA strengthens the False Claims Act, one of the best civil tools available to root out fraud in government. From 2000-2008, the Department of Justice recovered more than $15 billion in fraud for the government using the False Claims Act.
* Establishes a Financial Crisis Inquiry Commission to examine the domestic and global causes of the financial and economic crisis.

The bipartisan Fraud Enforcement and Recovery Act was cosponsored by nearly 30 senators, and has received the support of the Obama administration, the Department of Justice, the Federal Bureau of Investigation, the U.S. Secret Service, the U.S Postal Inspection Service, and the Inspector General of the Department of the Housing and Urban Development. The bill has also been endorsed by the Fraternal Order of Police, the Federal Law Enforcement Officers Association, the National Association of Assistant U.S. Attorneys, and Taxpayers Against Fraud.

Source: Senator Ted Kaufman