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Obama launches task force to fight financial fraud

Interagency effort will investigate mortgage fraud, Ponzi schemes and other financial crimes

The Obama administration on Tuesday unveiled a new interagency task force to investigate and prosecute mortgage, securities and other financial fraud.

Led by the Department of Justice, the task force plans to use a collective effort of federal, state and local authorities to crack down on financial fraud. The SEC, the Treasury Department and the Housing and Urban Development Department serve on the steering committee.

"We face unprecedented challenges in responding to the financial crisis that has gripped our economy for the past year," Attorney General Eric Holder said in a press conference. "Mortgage, securities, and corporate fraud schemes have eroded the public's confidence in the nation's financial markets and have led to a growing sentiment that Wall Street does not play by the same rules as Main Street."

The task force's mission, he said, "is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening."

Holder said federal authorities have already stepped up their efforts to prosecute financial crimes, citing the convictions of Bernard Madoff and the indictments of several officers of Stanford Financial Group in connection with another major Ponzi scheme. Also, the FBI is investigating more than 2,800 mortgage fraud cases, up nearly 400% from five years ago, he said.

The task force replaces the Corporate Fraud Task Force created by President Bush in 2002.

"Many financial frauds are complicated puzzles that require painstaking efforts to piece together. By formally coordinating our efforts, we will be better able to identify the pieces, assemble the puzzle and put an end to the fraud," SEC Chairman Mary Schapiro said in a prepared statement.

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