Law Enforcement Partnership: Agencies fighting fraud
Since its inception in 2007, the ACFE Law Enforcement Partnership has grown to include nearly 50 federal, state and local, U.S. and international government and law enforcement agencies. Each of these reputable agencies is dedicated to enhancing their anti-fraud efforts by encouraging and helping their employees earn the Certified Fraud Examiner credential.
This new column will feature members of the ACFE Law Enforcement Partnership who will provide readers with glimpses of the law enforcement side of investigating and prosecuting the incidences of fraud. Columnist Alani Mundie, CFE, international law enforcement liaison, manages two of the ACFE's partnership initiatives: the ACFE Law Enforcement Partnership and the Corporate Alliance. In this issue, we highlight the Asset Forfeiture Division of the U.S. Marshals Service – ed.
The U.S. Marshals Service, Asset Forfeiture Division
The U.S. Marshals Service (USMS), founded in 1789, is the nation's oldest federal law enforcement agency. In its role as the enforcement arm of the federal justice system, the USMS is responsible for a vast array of initiatives including but not limited to: the apprehension of federal fugitives; the seizure, management and liquidation of assets acquired through illicit gains; the protection of the federal judiciary at more than 400 locations in 94 federal court districts; the transportation of federal prisoners; and the Witness Security Program.
In addition to the 94 presidentially appointed U.S. marshals (one for each federal judicial district), the USMS is comprised of more than 3,950 deputy U.S. marshals and criminal investigators.
The seizure of criminal assets as a means to combat crime dates back to 1984 when Congress passed the Comprehensive Crime Control Act that created the Department of Justice Asset Forfeiture Program, in which the USMS Asset Forfeiture Division (AFD) plays a vital role.
The AFD is charged with the management and disposition of criminal assets seized by federal law enforcement agencies. The division is intimately involved in the forfeiture process from assisting with pre-seizure planning and analysis, to seizure operations, to the execution of court orders and litigation and investigative support. According to FY2011 estimates, the USMS manages nearly 18,000 assets valued at approximately $3.9 billion.
In August 2010, the USMS became a member of the ACFE Law Enforcement Partnership program, and since then, numerous members of the USMS have become CFEs.
In a recent interview, Jason R. Wojdylo, CFE, assistant chief inspector, AFD, discussed various AFD initiatives and how the CFE credential has benefited deputy U.S. marshals within AFD's Asset Forfeiture Financial Investigator Program (AFFI). Wojdylo, stationed in Tampa, Fla., has spent 15 years with the USMS. He manages a program of 50 investigators nationwide, and he works to assist them to become certified as CFEs.
FM: Much like the ACFE, the USMS places a strong emphasis on the importance of anti-fraud initiatives. Which USMS initiative would you say is the most effective fraud deterrent?
JW: In the AFFI, we bring a level of support to investigations involving financial and economic crimes to identify and seize criminal proceeds and the assets of illicit activity. Our aim is to assist in crippling criminal enterprises from a financial standpoint. My hope is that the very nature of our work sends a message of deterrence to those who might consider criminal activity, that the fruits of their crimes are not theirs for the keeping.
There is an inherent risk associated with criminal conduct: If you get caught, you stand to go to jail. There are crimes of passion and crimes of opportunity, but a high percentage of crime is really just about greed. People driven by greed are willing to take the risk of sitting in federal prison if it means they get to keep the fruits of their crime. That is where we come in.
Our investigators work to assist in identifying assets. When assets are seized, it packs a heavier punch than just a prison sentence alone. It also sends a message that not only is the government punishing the person for the crime but we are also taking their assets with us. This has a far greater crippling effect on the criminal enterprise in the process.
FM: The ACFE has certified 20 individuals in the AFFI since the USMS joined the Law Enforcement Partnership. How has the CFE credential helped you and your group with investigating the incidences of fraud, waste and abuse?
JW: The CFE credential adds a lot of credibility to law enforcement officials, particularly when they testify in court or before a grand jury. Having the credential helps identify us as subject-matter experts in our field. For example, the credential strengthens our affidavits because it indicates that we possess the experience and training to support the facts of our sworn statements. The CFE credential adds an element of credibility.
In addition, the CFE credential aids us in supporting our investigations. The ACFE has more than 60,000 members, and we frequently work with other CFEs in the private sector who are detecting fraud on a regular basis. As I mentioned earlier, when it comes to investigating financial and economic crimes, it's all about the money. We rely on CFEs in both the private and public sectors to aid us in our efforts to support investigations of criminal activity.
FM: What percentage of assets seized by the USMS comes from the fraudulent revenue of white-collar criminals?
JW: Because the influx of assets is so high, it's hard to give an exact percentage. White-collar crime has always existed, but when asset forfeiture became the government's latest weapon in 1984, we focused its use on drug crimes. However, that trend has changed. As a result of the economic downturn that we've experienced over the last several years, we have seen a very high spike in the number of white-collar crimes.
Take cases like those of Allen Stanford and Bernie Madoff, for example. The USMS was intimately involved in the Madoff case. In fact, National Geographic did a report on our involvement in the Madoff case titled "Seized & Sold: The Madoff Auction." So although there may not be an exact percentage that I can offer on the number of assets forfeited from white-collar criminals, I can tell you that it has gotten increasingly higher than when we started almost 28 years ago.
FM: Is there one particular fraud case that you have worked on personally or that the USMS has undertaken that has given you the most satisfaction or that has shaped or strengthened your mission to detect fraud?
JW: That is a tough one; there are just too many to name. The most satisfaction I receive is when we can return the proceeds of crimes to the victims. When you have entire life savings taken from people as a result of a white-collar crime, the greatest satisfaction is in returning as much of that back to them as possible.
Unfortunately, however, we'll more often than not ever be able to return to victims the entirety of their losses. Many times, we're returning pennies on the dollar. So the feeling of satisfaction is never really complete because rarely are we able to make victims completely whole again. You can bet we will do all that we can to pursue every viable asset.
In other instances, we're dealing with victimless crimes. Drug crimes, for example, are considered victimless crimes (even though society is victimized). When we seize the criminal assets in victimless cases, we distribute proceeds to state and local law enforcement through an equitable sharing program to enhance their law enforcement initiatives.
Through the equitable sharing program, state and local law enforcement agencies that participated in the underlying investigation are eligible for a percentage of the net proceeds to support law enforcement objectives. The ability to provide state and local law enforcement with tools that they would not normally be able to have if it weren't for the AFD, is another great satisfaction of this job. Since the program started in 1985, more than $6.1 billion has been shared.
FM: What do you foresee being the future fraud trends in your field?
JW: There will always be economic crimes in the world. Those who have greater access to money often have greater access to greater opportunities. Economic crimes will always exist, because there will always be people who take shortcuts to achieve their idea of prosperity. Unfortunately, that is just how our society operates.
I think we're going to see trends towards greater criminal savviness and greater efforts on behalf of law enforcement to detect white-collar crimes. Bad guys are sometimes one step ahead of law enforcement in how they operate. Virtual worlds and the relative ease of moving large amounts of money around the globe often makes it that much harder for law enforcement to detect criminal activity. With help from the electronic age and the Internet, those who engage in economic crimes are likely to become savvier in how they conceal and move their money.
FM: What other AFD initiatives would you like to share with our readers?
JW: One area in which we are becoming more aggressive involves forfeiture money judgments. There are currently hundreds of billions of dollars of uncollected debt from criminal activity owed to the U.S. government. This debt is the sum of all the proceeds of crime that the government has either been unable to locate or unable to forfeit because the funds are unavailable (such as funds that have been spent on vacations, fine dining, etc.).
If an individual engages in financial or economic crime, the U.S. attorney can request a judgment at the time of the defendant's sentencing to ensure that the defendant will be held accountable for paying back to the government the total sum of illicit gains.
For example, if the government can show that an individual profited $1.5 million from his or her crime but can only locate $1 million in assets, the court can impose a $500,000 judgment, in addition to any fine or prison sentence. Even after the prison sentence is served, that individual will be indebted to the government for $500,000 for the rest of their life until it is paid off.
Defendants are often placed on payment plans to pay back their debt as they integrate back into society.
For the past 2½ years, the USMS has been aggressively pursuing forfeiture money judgments as a means of holding criminals accountable for their monetary debt owed to the federal government. Although forfeiture money judgments have long been imposed, we had limited resources to pursue them, and they were rarely exercised.
With an active forfeiture money judgment investigation and collection program now in place, we are aggressive in ensuring that those involved in illegal activity are held accountable. More money has been returned to the federal government in the past 2½ years than in the history of forfeiture. We hope this sends the message to people that if you engage in white-collar crime and squander the money, you'll still be held accountable for the crime you committed beyond just going to jail.
Alani M. Mundie, CFE, international law enforcement liaison for the ACFE, manages two of the ACFE's partnership initiatives: the ACFE Law Enforcement Partnership and the Corporate Alliance.
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