It has been a red-letter year for white collar crime. Just three months since his confirmation as U.S. attorney for the Southern District of New York, Preet Bharara and his office have charged more than a dozen people in a sweeping insider-trading case involving $3 billion Galleon Group, prosecuted several people tied to Bernard Madoff, who pleaded guilty last spring to orchestrating the largest known Ponzi scheme in history, and secured a 20-year sentence for star attorney-turned-hedge-fund-swindler Marc Dreier.

On November 19 the Center on the Administration of Criminal Law invited Bharara to deliver a public address on white collar crime. He discussed the ever-changing face and scope of white collar crime, why it may grow even during our financially challenged times and the steps the attorney’s office can take to rein in perpetrators.

While the scale of the frauds exposed in the last year “would make even the original Mr. Ponzi blush,” said Bharara, the truth is that as long as there have been objects of value to be coveted, there has been white collar crime. But he sees the introduction of billions of dollars through the Troubled Asset Relief Program and President Obama’s stimulus plan having the potential to open “unprecedented opportunities for the unscrupulous." In a down economy, said Bharara, people may be more gullible, and desperate for any way to make money.

Another reason for the unrelenting survival of white collar crime is the increasing difficulty of detecting fraud. Technology has made computer fraud more complex and harder to track, and the structure of businesses and their ownership has helped make prosecution more difficult. Citing the public’s growing lack of faith in the economic system, Bharara said that it is more important than ever that aggressive and innovation techniques are used to stop criminals.

White collar crime, Bharara said, must be pursued just as any other crime is, and perpetrators of fraud should be treated no differently than other criminals. “But our business is not only about being tough,” he said. “It is also about being smart. It is about using a combination of techniques and approaches that together can put us in the best position to catch criminals and deter the rest.” The U.S. Attorney has utilized, and Bharara argued strongly for, high-tech detection tools such as court-authorized Title III wiretaps and surveillance of both suspects and computers. While these techniques are somewhat controversial, Bharara made no apologies:

“You can expect us to use, when warranted, all the legal authority available to monitor criminal activity taking place on the Internet, to trace and identify the perpetrators, and to keep our financial systems and accounts secure.”

Posted November 25, 2009