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Virginia Is for Lovers and Fraudsters
Caplin & Drysdale

Virginia Is for Lovers and Fraudsters

Date: 6/3/2010

The United States Attorney for the Eastern District of Virginia has announced the formation of a new partnership between his office and several federal and state law enforcement agencies to investigate and prosecute complex financial crimes both in Virginia and throughout the nation. This partnership was formed in response to President Obama’s directive to the new interagency Financial Fraud Enforcement Task Force to work with federal, state, and local partners on significant financial crimes.

The formation of this partnership in the Eastern District of Virginia is significant for several reasons. The District has been the government’s “go to” district for the prosecution of many high profile complex cases. Virtually all securities offenses that involve a false filing with the SEC can be prosecuted in the Eastern District of Virginia because they are filed on the SEC’s servers located in Ashburn, Virginia. The federal venue statute, 18 U.S.C. § 3237, permits criminal prosecution in any district where the offense was begun, continued or completed. Similarly, fraudulent interbank financial transfers routed through the Federal Reserve's clearinghouse in Richmond may be prosecuted in the Eastern District of Virginia as well as any fraud involving the numerous federal agencies, including the Pentagon, that maintain facilities in that District.

The new partnership is comprised of the following agencies: SEC-Division of Enforcement; Commodities Futures Trading Commission; Virginia Office of Attorney General; Virginia State Corporation Commission, FBI; Postal Inspection Service and IRS-Criminal Investigation Division. The members will meet on a regular basis to exchange information and work corroboratively on cases. One goal is to detect fraud at its earliest stages. According to the U.S. Attorney, cases are already in process that will be announced in the next few months.

Both the prosecutors and the courts in the Eastern District of Virginia have demonstrated their ability to handle complex fraud cases in an expeditious manner. The District is famous for its “rocket docket.” The formation of this partnership will almost certainly result in increased criminal prosecution of securities frauds and other financial crimes.

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