White-Collar Criminals 'Outgunning' Law Enforcement
Law enforcement is outmanned and outgunned by criminals using the latest technology to commit white-collar crimes, according to attorney Maranda Fritz, a former senior counsel in the Manhattan district attorneys office.
Individuals can use technology to access and target victims in the U.S., but the government is literally walking away from these cases because [prosecutors] cant figure out how to gather evidence, analyze it, and reach the [perpetrator], said Fritz, now a partner in the white-collar crimes practice in the New York office of Hinshaw & Culbertson.
The sheer quantity of electronic evidence can be overwhelming for investigators, she said.
Fritz described one fraud case she defended in which the government seized a companys computer hard drives. But the court tossed that evidence and dismissed the case because the government hadnt processed the hard drives upon seizure, as required.
When a member of the U.S. attorneys office was asked later why they hadnt processed the evidence right away, The guy said simply, We dont have the resources you think we have, according to Fritz.
She also said crooks are getting smarter. The prosecutors evidence of choice used to be email or phone wiretaps, she explained.
But I no longer see clients using email, Fritz said. Now they use text messaging or Skyping. The government doesnt have the ability to capture most texting or Skyping.
Clients, she said, have enormous sophistication. But the governmentincluding the Securities and Exchange Commissionseems clumsy and way behind the curve. They simply dont have the resources to bring in tech-savvy individuals to keep up with whats going on.
Fritz spoke as part of a conference call presented by the firm on Tuesday, discussing trends in white-collar crime and investigations.
Other speakers included:
- Sergio Acosta, a partner in Hinshaws Chicago office, who talked about the Foreign Corrupt Practices Act. Acosta said that while the U.S. has not formally adopted compliance as an FCPA defense, recent actions by the government have created a de facto defense if a company has an efficient compliance program in place. There are two major components to declination [to prosecute] decisions, Acosta said, cooperation on the part of the company and the existence of an effective compliance program.
- Lee Smith, also a Hinshaw partner, who discussed the rising trend in internal investigations. It used to be there would be no written report, Smith said. But now we see much more transparency and specificity in findings. Also, now reports are often made public in order to gain credibility with the public as well as with prosecutors, he added.
The speakers and the law firm also produce regular updates on their white-collar crime blog.