The U.S. Department of Justice plans to beef up the anti-fraud section of its criminal division, particularly with respect to financial services. The department is aiming to add up to 20 new anti-fraud attorneys to prosecute, among other things, Foreign Corrupt Practices Act violations, Lanny Breuer, assistant attorney general for the criminal division, told CR at a recent Practising Law Institute event. The fraud section, which parachutes specialists across the country to work with assistant U.S. attorneys, currently has 58 attorneys. The move is in response to fallout from the market meltdown.
The DoJ is also in the late stages of hiring a new chief for the fraud unit, as well as a deputy chief of securities and commodities fraud. "I'm expecting rock stars for both," Breuer said. A former official said the new fraud chief is slated to be picked from private practice, but declined to comment on who it might be. The current fraud chief is Steven Tyrrell, who has announced plans to retire. Filling the deputy chief slot is noteworthy because the seat has been empty for years, according to Breuer. James McMahon, the head of the business and securities fraud section at the U.S. Attorney’s Office for the Eastern District of New York since early 2008, was the most recent deputy chief.
Joshua Hochberg, partner with McKenna Long & Aldridge and a former chief of the fraud section, said the additional attorneys will help the DoJ pursue more thorny cases in districts that do not have specialized white collar crime units. He added that the impact of the new staffers likely will be felt first in less complex areas such as mortgage fraud because of the time it takes to develop securities cases.
Staff levels in the section have risen and fallen over the years. During the savings-and-loans crisis of the 1980s, the section ramped to more than 100 attorneys from roughly 30 earlier in the decade, according to Peter Clark, partner with Cadwalader Wickersham & Taft and a former deputy chief of the fraud section. --Edward Beeson