Sunday, February 15, 2009

The Proposed New Fraud Act - Both NACDL and Heritage Voice Opposition

Clearly there is a need for increased regulation to stop fraudulent activities.  In this past year, there have been too many innocent victims of fraud.  The legislative response, however, is disappointing.  As I told Chisun Lee at ProPublica, here, it uses a hammer to hit the wrong nail.

Parts of the new legislation are promising.  For example, increased funding to monitor and detect fraud would be wonderful. Admittedly Senator Patrick Leahy when introducing the bill notes that "homes mortgages were packaged together and turned into securities that were bought and sold in largely unregulated markets on Wall Street." But the next paragraphs do not logically follow from this statement.  That is, adding new federal legislation and increasing penalties are part of the proposed legislation.  New laws, however, are not the answer - especially when there were already laws on the books to meet the alleged conduct. What needs to happen here is stopping this misconduct before victims suffer.  There needs to be increased regulation and oversight of that regulation to stop those who try to engage in fraudulent activities.

It is interesting to see the National Association of Criminal Defense (NACDL) and Heritage Foundation issuing a joint statement to the Senate Judiciary Committee showing their opposition to the proposed expansion of federal criminal law in S. 386, the Fraud Enforcement Recovery Act.   

Heritage-NACDL Letter -Download nacdlheritage_ltr_to_senate_judiciary__fraud_enforcement__recovery_act_s__386.pdf

(esp)

Addendum - Rita Glavan, Acting Assistant AG- Criminal Division presents the government position here - Download 2009-3057-1.pdf

http://lawprofessors.typepad.com/whitecollarcrime_blog/2009/02/whats-wrong-wit.html

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Tracked on Feb 19, 2009 7:28:46 AM

Comments

I don't know---as is usual most problems result from the government failing to enforce the laws that are already in existence. But maybe we do need some more laws dealing with fraud and the like.

My favorite would be that anyone who is employed by the government that is found to have cheated on his/her taxes be imprisoned for life without the possibility of pardon or parole.

Posted by: tcobb | Feb 15, 2009 9:02:36 PM

"My favorite would be that anyone who is employed by the government that is found to have cheated on his/her taxes be imprisoned for life without the possibility of pardon or parole."

As usual there is a law already on the books to deal with that. "Liberals impose taxes; they don't pay taxes." Read your code. Ignorance of the law is no excuse.

Posted by: willis | Feb 16, 2009 8:44:46 AM

"My favorite would be that anyone who is employed by the government that is found to have cheated on his/her taxes be imprisoned for life without the possibility of pardon or parole."

And a guarantee of a cabinet post!

Sorry, couldn't resist. ;-)

To the substance of the issue, i am pretty skeptical of the notion that any new laws are needed. we have to recognize that even if something is illegal, a certain amount of the time people will do it anyway. murder is illegal, but it has only slowed down the murder rate.

and the idea of a big brother coming in to proactively prevent fraud sends shivers down my semi-libertarian back.

Posted by: A.W. | Feb 16, 2009 10:17:48 AM

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