Weekend Economists Mark D Day, 2014 June 6-8, 2014

[Demeter]

41. Preet Cracks Down on White Collar Crime of all kinds!

Public corruption

Bharara has said that “there is no prosecutor’s office in the state that takes more seriously the responsibility to root out public corruption in Albany and anywhere else that we might find it, and I think our record speaks for itself.” During his tenure, Bharara has charged several current and former elected officials in public corruption cases, including Senator Vincent Leibell, Senator Hiram Monserrate, NYC Councilman Larry Seabrook, and Yonkers City Councilwoman Sandy Annabi. Bharara’s office uncovered an alleged corruption ring involving New York State Senator Carl Kruger. In April 2012, Kruger was sentenced to seven years in prison. In February 2011, Bharara announced the indictment of five consultants working on New York City’s electronic payroll and timekeeping project, CityTime, for misappropriating more than $80 million from the project. The investigation has expanded with five additional defendants being charged, including a consultant who allegedly received more than $5 million illegal kickbacks on the projects.

In early 2013, Mr. Bharara oversaw the conviction of New York City Police Department Officer Gilberto Valle, who was part of an alleged plot to rape and then cook and eat (cannibalize) women. Mr. Bharara and his team argued that Valle had done more than hypothesize, think, or speculate (in online networks where such fantasies are discussed), but had moved on from being a possible danger to others to the criminal planning phase and had even visited the street where one of the women lived, at the behest of another defendant. However, the defense and others who objected to the verdict argued that all he had done was fantasize, not plan, and that such thoughts or online posts, however twisted, were still protected. The defense team (Robert Baum and Julia L. Gatto) may ask the judge to set aside the verdict, or may appeal. If he does keep the felony conviction and is sentenced, Valle would automatically no longer serve in law enforcement.

On April 2, 2013, Bharara unsealed federal corruption charges against New York State Senator Malcolm A. Smith, New York City Councilman Dan Halloran and several other Republican party officials. The federal complaint alleged that Smith attempted to secure a spot on the Republican ballot in the 2013 New York City mayoral election through bribery.

Violent crimes and Gang activity

Since 2009, the U.S. Attorney's Office for the Southern District of New York has convicted more than 1,000 of approximately 1,300 people charged in 52 large-scale drug and gang takedown. On lowering violent crime rates, Bharara has said, "You can measure the number of people arrested and the number of shootings, but success is when you lift the sense of intimidation and fear."

In January 2011, Bharara’s office participated in a multi-state organized crime takedown, charging 26 members of the Gambino crime family with racketeering, murder, narcotics, and firearms charges. This action was part of a coordinated effort with U.S. Attorney Offices in Brooklyn, New York, Newark, New Jersey and Providence, Rhode Island. Bharara has also overseen the largest criminal sweep of gangs in Newburgh, New York, working with the FBI, the Department of Homeland Security’s Immigrations and Customs Enforcement and local law enforcement agencies to bring charges against members of the Latin Kings and Bloods gangs, amongst others.

Complex fraud, Civil fraud, and Cyber crime

Since entering office, Bharara renewed focus on sophisticated, large-scale frauds, creating a Complex Frauds and Cybercrime Unit in the Criminal Division and a partner Civil Frauds Unit in the Civil Division to focus on these types of crimes. The Complex Frauds and Cybercrime Unit has uncovered and prosecuted cases involving frauds of all kinds, including a massive fraud involving disability benefits at the Long Island Rail Road, an immigration fraud mill that operated through a Manhattan-based law firm, and a $57.3 million fraud on the Conference on Jewish Material Claims Against Germany, which administers programs established to aid the survivors of Nazi persecution.

The Complex Frauds and Cybercrime Unit is also charged with addressing the growing threat of cybercrime. In November 2011, the Office charged seven defendants with operating an internet fraud scheme that infected more than four million computers worldwide and manipulated internet advertising business. In June 2012, The New York Times published an Op-Ed written by Bharara about the threat posed to private industry by cybercrime and encouraged corporate leaders to take preventative measures and create contingency plans.

The Civil Frauds Unit has investigated and brought cases against Deutsche Bank and a subsidiary, Mortgage IT, as well as Allied Home Mortgage, for reckless and fraudulent lending practices. In February 2012, the office filed and simultaneously settled a civil fraud lawsuit against CitiMortgage. As part of the settlement, the bank admitted and accepted responsibility for failing to comply with certain HUD-related loan requirements and other conduct and agreed to pay the U.S. $158.3 million.

Bharara with his wife at the 2012 Time 100 gala

Bharara has also been very active in prosecutions related to online poker. In 2010, he "threatened an Australian payment processor with up to 75 years in prison for helping online poker companies do business with their U.S. customers." In April 2011, Bharara charged 11 founding members of internet gambling companies and their associates involved with pay processing with bank fraud, money laundering and illegal gambling under the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). The case is United States v. Scheinberg.