Financial institution regulators, others absent from new fraud task force

A new task force focused on financial fraud that will include top officials from the Justice Department and the FBI, and which replaces the panel established during the Obama administration, was ordered created today by executive order of President Donald Trump.

Tuesday’s order terminates the Obama-era Financial Fraud Enforcement Task Force, which was chaired by the U.S. attorney general and included a long list of executive department and agency heads, including the federal financial industry regulators and the Financial Crimes Enforcement Network (FinCEN). It replaces that panel with a Task Force on Market Integrity and Consumer Fraud to be established within the Justice Department by the attorney general (AG) but chaired by the deputy AG.

Missing from the new task force membership list is any of the non-Justice Department agency heads previously included, among them FinCEN, Treasury, the Federal Reserve Board, Federal Deposit Insurance Corp. (FDIC), Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA) and other agencies and executive departments. Instead, representatives from these agencies, as well as the Bureau of Consumer Financial Protection (BCFP, formerly known as CFPB), will be included in task force meetings as deemed necessary by the deputy AG.

The president’s order says the task force will provide guidance regarding the investigation and prosecution of cases involving fraud against the government, financial markets and consumers. This would cover any number of fraudulent activities, including financial fraud, money laundering (including the recovery of proceeds), cyber-fraud, financial fraud against specific groups (the elderly, service members and veterans), procurement and grant fraud, securities and commodities fraud, digital currency fraud, health care fraud, tax fraud and “other financial crimes.”

The panel additionally would be charged with making recommendations to the AG on fraud enforcement activities; and making recommendations to the president (through the AG) regarding cooperation among agencies and among federal, state, local and tribal authorities. It would also make recommendations to the president (again, through the AG) regarding changes in rules, regulations, policy or recommendations to Congress “to improve the effective investigation and prosecution of fraud and other financial crimes.”

In addition to the deputy AG, the task force roster includes the Justice Department’s associate AG (as vice chairman), assistant AGs from the criminal, civil, tax and antitrust divisions; the FBI director; U.S. attorneys general designated by the AG; and “such other officers or employees of the Department of Justice as the Attorney General may from time to time designate.”

The previous order by President Barack Obama specifically targeted “significant financial crimes and other violations relating to the current financial crisis and economic recovery efforts.” The new order omits any reference to the crisis.

Executive Order Regarding the Establishment of the Task Force on Market Integrity and Consumer Fraud (July 11, 2018)

Executive Order 13519 (Nov. 19, 2009, Federal Register)