Cracking Down on Securities Fraud

Article excerpt

DALLAS -- Bill Brosseau looked uncomfortable last autumn, standing before a judge in rumpled orange prison overalls.

After all, the Dallas oil man was known for his sartorial style - - monogrammed shirts, fine suits, manicured hands. While his jailhouse garb was ill-fitting, many of his former investors waited more than a decade to see him in it.

Brosseau, 50, has since pleaded guilty to one count of securities fraud and faces up to five years in prison -- a reversal of fortune for a man who was featured on a 1981 cover of Money magazine lounging in knee-high cowboy boots with "BB" stenciled on them. He was, the magazine proclaimed, a self-made millionaire spawned by the oil boom. "These are the kinds of cases that deter people," said Paul Coggins, the U.S. attorney in Dallas who prosecuted Brosseau. "There's a huge amount of white-collar criminal activity in the area." Brosseau's demise was a triumph for Coggins and his securities fraud task force, the only one of its kind in the United States. The group was formed three years ago to combine the investigative prowess of the U.S. Attorney's Office, the FBI and the Texas State Securities Board. Its efforts have led to 13 convictions. Seven more people are under indictment or have pleaded guilty and are awaiting sentencing. Six other investigations are proceeding. The task force isn't widely known beyond the agencies involved. The group is primarily an investigative tool, with charges filed by the U.S. Attorney's Office. "I wasn't aware they had a task force," said Bob Smith, a Dallas attorney who represented several defendants in securities fraud cases in the last few years. Coggins oversees 85 attorneys in four offices around the state. About a third are assigned to civil cases while the rest handle criminal work such as immigration and drug-related cases. By joining forces with state securities officials, Coggins said his office can prosecute more cases with less manpower. "I don't know where we'd be without the Texas State Securities Board," he said. The securities board said the arrangement with the U.S. Attorney's Office allows it to bring federal sentences to its cases. That means more prison time without parole on securities fraud convictions. At the state level, prison overcrowding has triggered many early releases, with some con men freed after serving as few as 10 months of a 10-year sentence, said Rhonda Rogers, a securities board attorney assigned to the task force. To be sure, sentences for securities fraud are generally shorter than punishment for other federal crimes such as drug trafficking or bank fraud. Former Dallas broker Robert Doviak, one of the task force's first cases, was released in January after serving 23 months in prison. …


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