Bank and Thrift Criminal Fraud:

The Federal Commitment Could Be Broadened

GGD-93-48: Published: Jan 8, 1993. Publicly Released: Feb 8, 1993.

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Pursuant to a congressional request, GAO provided information on federal efforts to investigate and prosecute financial institution fraud, focusing on: (1) implementation of Crime Control Act of 1990 provisions; and (2) the Department of Justice's (DOJ) efforts to address bank and thrift fraud.

GAO found that: (1) the Attorney General has made criminal financial institutional fraud the top enforcement priority; (2) DOJ has established the Financial Institutions Fraud Unit to supervise and coordinate financial institution fraud matters within DOJ, ensure adequate resources are available for investigation and prosecution, and coordinate the overall investigative approach with other federal agencies; (3) the Special Counsel's ability to control response to financial institution fraud was inhibited by DOJ and the federal government's decentralized structure, the lack of resources to investigate and prosecute cases, and a lack of authority over non-DOJ personnel involved in bank and thrift fraud activities; (4) non-DOJ staff were often unavailable to give needed expertise because of competing priorities and demands on their resources; (5) DOJ has failed to adequately strengthen the financial institution fraud program, create multiagency task forces, or acquire interagency agreements to ensure proper staffing levels, (6) of 2,603 total convictions, 1,700 were sentenced to prison and federal courts ordered restitution and fines payments totalling over $846 million, however, the government collected only 4.5 percent of this total; and (7) DOJ has not set sufficient goals to measure accomplishments and evaluate the overall effectiveness of its efforts.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The reduction of bank and thrift fraud on the national agenda makes this recommendation no longer applicable.

    Matter: Congress should explore the need and ways to integrate DOJ and non-DOJ agencies more fully into the national effort. In this regard, dedicating resources to identify and investigate financial institution fraud could be one mechanism to consider.

  2. Status: Closed - Not Implemented

    Comments: The reduction of bank and thrift fraud on the national agenda makes this recommendation no longer applicable.

    Matter: Congress should explore whether legislative action is required to clarify the authority and role of the Office of Special Counsel.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Information on these issues has been collected and published in DOJ's quarterly report to Congress.

    Recommendation: The Attorney General should direct the Special Counsel to develop systematic information on the adequacy of Federal Bureau of Investigation and U.S. Attorney staffing, determine where and how many non-DOJ staff resources are needed, and develop measures for gauging the overall effectiveness of the government's response.

    Agency Affected: Department of Justice

  2. Status: Closed - Implemented

    Comments: The Special Counsel's survey results and review of this issue have not identified a need for formal interagency agreements.

    Recommendation: The Attorney General should assess whether additional action is needed, including entering into formal interagency agreements to ensure that adequate non-DOJ agency resources are committed to this effort, and notify Congress of those findings.

    Agency Affected: Department of Justice


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