US targets financial fraud in sweeping national probe

Dec 6, 2010, 20:00 GMT

Washington - US justice officials on Monday announced the arrests of more than 500 people accused cheating thousands of investors out of a combined 10.4 billion dollars across the country, as part of a federal government crackdown that began in August.

Operation Broken Trust had uncovered scams against some 120,000 people across the United States, with most taking place during the financial crisis that has swept the United States over the last few years, the US Justice Department said.

The sweep was a nationwide effort by authorities, but the frauds were largely isolated and unrelated to each other.

US Attorney General Eric Holder urged the public to be watchful for financial scams and said the message to would-be perpetrators was clear: 'We will use every tool at our disposal to find you, to stop you and to bring you to justice. Cheating investors out of their earnings and savings is no longer a safe business plan.'

The operation marked the largest nationwide crackdown on investment fraud in US history, the department said. US President Barack Obama first launched an inter-agency task force to combat financial crimes in November 2009.

Separately, victims of Bernard Madoff, the convicted perpetrator of the largest fraud in US history, continued to look for ways to recover their losses by suing banks involved with Madoff's holdings.

Irving Picard, the trustee charged with aiding Madoff's victims, sued British bank HSBC and others on Sunday for 9 billion dollars, alleging the banks ignored warnings signs over the New York financier's 65-billion-dollar pyramid Ponzi scheme.

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