Academic journal article ABA Banking Journal

Put Fraud Cases on a Fast Track

Academic journal article ABA Banking Journal

Put Fraud Cases on a Fast Track

Article excerpt

Put fraud cases on a fast track

The headline might read something like this: "Agents round up 21 on embezzlement charges." The number could be even higher. But the message--in the best Elliott Ness tradition--is the same: Bank crime doesn't pay.

Getting that message across to potentially crooked bank employees is the aim of a federal prosecution program called Fast Track. In recent months financial regulators have been urging bankers to take part in the program in federal judicial districts that offer it. In those districts that don't currently have a Fast Track program, the regulators urge bankers to work with federal authorities to start one.

Enforcement problem. Of course, bank crime should never pay--but there's too much to handle. U.S. Attorneys, who prosecute it at the federal level, and the Federal Bureau of Investigation, which investigates it, don't have the resources to bring all guns to bear on every garden-variety embezzlement.

As a result, many cases involving smaller dollar amounts haven't been prosecuted--even when the bank involved has caught the cheat and obtained a confession.

The situation at Valley National Corp., Phoenix, was typical. Bob G. Manning, assistant vice-president and manager of corporate security and internal investigations at Valley explains that the bank holding company was often able to track down embezzlers. But, when the dollars involved fell below officials' thresholds for prosecution, the matter went nowhere.

"We just couldn't get their attention," says Manning. This was beyond frustation--it was more like an unchecked virus. The employees--often tellers or loan officers--would be fired, naturally. But without a criminal prosecution on their record, they were free to move to another bank. And, according to Anthony Adamski, chief of the FBI's financial crimes unit in Washington, the tendency is for that person to steal again.

The problem is nationwide in scope. "One of the biggest complaints I've gotten over the years from bankers is, 'Hell, we send in hundreds of cases every year and nothing ever happens to them'," says James R. Dudine, chief of the FDIC's Special Activities Section.

Enter Fast Track. About half of the nation's 94 districts offer some variation on the Fast Track theme, according to Adamski.

Here's the basic process.

Careful work by the bank involved is essential. This includes a formal statement of the particulars of the case; a written or taped statement from the suspect; and copies of bank records. …

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