Financial Fraud Enforcement Task Force Announces Regional Results of Operation Broken Trust, Targeting Investment Fraud

DENVER—Following an announcement today by Attorney General Eric Holder in Washington, D.C., representatives of the Financial Fraud Enforcement Task Force in Denver, including U.S. Attorney John Walsh, and heads of other federal agencies, including the U.S. Postal Inspection Service, IRS-Criminal Investigation, the SEC, and the FBI, announced the regional results of Operation Broken Trust, a nationwide operation which targeted investment fraud in the District of Colorado and throughout the country. Operation Broken Trust is the first nationwide operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.

The interagency Financial Fraud Enforcement Task Force was established by the president to lead an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. Starting on Aug. 16, 2010, to date Operation Broken Trust has involved enforcement actions against 343 criminal defendants and 189 civil defendants for fraud schemes involving more than 120,000 victims throughout the country. The operation’s criminal cases involved more than $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. In the District of Colorado, four criminal cases have resulted in 882 victims losing over $55,100,000.

“With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Attorney General Holder. “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 public rightly expects law enforcement authorities to pursue financial wrongdoing with the same determination applied to other types of crime,” said U.S. Attorney John Walsh. “These case results show that in the aftermath of the financial crisis of 2008-2009, the Department of Justice is aggressively pursuing financial criminals. But much work remains to be done, and the Department and the U.S. Attorney’s Office in Colorado is committed to doing it. To demonstrate that fact, the U.S. Attorney’s Office is currently filling three vacancies that work directly on investment fraud cases.”

“Investment fraud has brought financial ruin to many Americans and we are committed with our law enforcement partners to bring those to justice who prey on the trust of their clients,” said Lilia Ruiz, Assistant Special Agent in Charge, IRC Criminal Investigation, Denver Field Office.

“Any use of the Postal system in furtherance of criminal activity will be pursued using all of our resources,” said U.S. Postal Inspector in Charge Shawn Tiller. “The Postal Inspection Service in Denver places a high priority on these investigations and has a team of Postal Inspectors dedicated to arresting those who victimize the public by using the mail to commit fraud.”

“The conduct alleged in these cases targets many of those most vulnerable to deceit and financial deception,” said Donald Hoerl, Regional Director, for the SEC’s Denver Office. “We are pleased to have collaborated with the numerous federal agencies who participated in Operation Broken Trust, especially in these trying financial times.”

“Our countries’ financial stability can be affected by unscrupulous investment counselors, and this initiative will send a clear message that this behavior will not be tolerated,” said FBI Special Agent in Charge James H. Davis. “These types of crimes pose a significant threat to our economic well being, and the FBI will continue to commit resources and utilize subject matter experts to purse these companies and individuals.”

The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.

Operation Broken Trust cases in the District of Colorado include the Shawn Merriman case, the Christine Thompson case, the Lochmiller/Valley Investments case, and American Vending cases.

These cases were investigated by U.S. Postal Inspection Service, IRS-Criminal Investigation, the SEC, and the FBI.

As a part of Operation Broken Trust, the task force is making the public aware of resources available to protect against these types of fraud and how to report fraud when it occurs. To learn more about investment scams, how to take steps to protect yourself from scams, or how to report investment fraud if you believe you have been victimized, the task force recommends that you visit its website, StopFraud.gov, which includes links to a wide array of task force member resources.