The Anti-Fraud and Ethics Police
Fraud is truly the legal career opportunity gift that keeps on giving. Everywhere you turn, there is a new anti-fraud initiative emerging from either the federal government, the states, the insurance industry, and other organizations.
The latest is the U.S. Department of Justice’s Oil and Gas Price Fraud Working Group, hastily cobbled together in the face of escalating gas prices at the pump with the ostensible purpose of going after price manipulators. Hopefully, that will include China and India, who are guilty of “manipulation” by virtue of their tremendous increased demand for oil to lubricate their rapidly growing economies.
Despite the exponential expansion of anti-fraud efforts and activities, fraud just keeps on keeping on. There almost appears to be a direct correlation between the number of attorneys, investigators, auditors and other professionals enlisted to identify and prosecute fraud and the number of defrauders and the economic results of their fraudulent activities.
The U.S. government now has seven task forces and working groups devoted to fraud:
- Financial Fraud Enforcement Task Force
- Health Care Fraud Prevention and Enforcement Action Team
- Mortgage Fraud Task Force
- Hurricane Katrina Fraud Task Force
- Computer Crimes Task Force
- National Procurement Fraud Task Force
- Oil and Gas Price Fraud Working Group
Overlay the fraud task forces with the government’s 73 Inspector General offices (half of which have their own general counsel’s office), the U.S. Office of Government Ethics, Ethics offices and officers in numerous federal agencies, the Defense Contract Audit Agency, the Securities and Exchange Commission and a host of other federal anti-fraud initiatives and you have quite a collection of federal attorney and law-related positions focused on fraud.
The states are no slouches in the fraud area, either. There are parallel state anti-fraud task forces in many states. Every state has a Medicaid Fraud Bureau and many state Attorney General offices and local prosecutor offices have launched task forces and related efforts to combat insurance fraud.
Because fraud exists in virtually every area, the same can be said about anti-fraud efforts. Insurance companies are establishing and expanding in-house anti-fraud entities. Virtually all of the Fortune 1000 corporations have an Ethics Office, thanks to the legislative and regulatory pressures emanating from Washington, led by the U.S. Sentencing Commission and its Organizational Sentencing Guidelines. Colleges and universities are also part of the ethics mix, as are trade and professional organizations, the larger of which have independent ethics offices staffed by attorneys who advise members on ethics matters.
Professional licensing organizations increasingly focus on ethics matters. State bars have been in the forefront of this movement for decades, and are staffed with ethics officers, bar counsel and client protection fund attorneys. Not to be outdone, other professional regulators, such as medical licensing agencies, are following the attorney model.
Finally, the prolific escalation of international counterfeiting and piracy of products, patents, trademarks and copyrights – manifested by knock-offs – has given rise to laws like the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PRO-IP Act), that enhance career opportunities for attorneys interested in an anti-fraud practice.
The step-up in government investigations and prosecutions, as well as the efforts of private anti-fraud organizations, is also creating job opportunities on the “dark side,” defending individuals and organizations accused of fraud. These attorneys advise and defend individuals, companies, corporate executives and foreign governments and handle complex parallel criminal and civil litigations and internal corporate investigations, particularly in the areas of healthcare fraud, financial fraud, antitrust, and securities enforcement.
The Fraud Future
As long as greed and its attendant opportunities govern human behavior, there will be Bernie Madoffs, Ponzi schemes, insider trading, tax evasion, baits-and-switches, scams, you name it.
Massive federal programs like Medicare and Medicaid, fielding more than a billion claims and doling out billions of dollars each year, are a huge temptation for defrauders.
Suspicious Activity Reporting (“SAR”) by financial services companies (defined so expansively that they include casinos) to the government are at historically high levels and are increasing by double-digit percentages every year. They show increases in every possible kind of financial fraud and prompt investigating agencies to increase the number of investigations they undertake, which in turn generates more prosecutions.
It is difficult to see that a young attorney interested in either combatting fraud or white collar defense work and who positions himself or herself for such a career will ever encounter a dearth of legal job opportunities.