When the Government Can’t Investigate Fraud

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Government agencies are limited by their resources, both money and people. It came as no surprise to me that the Federal Bureau of Investigation is struggling to investigate cases of financial fraud. They simply don’t have enough investigators. I see the same problem with the SEC and FTC… not enough people to investigate all the allegations of fraud and shady dealings.

What are agencies to do when they can’t investigate everything that they think merits attention? Sadly, many cases go away with no action.

The FBI’s problem with financial fraud is multi-faceted:

  • After September 11, 2001, many agents were moved from criminal investigations to terrorism and intelligence
  • Agents are retiring in large numbers, resulting in brain drain… loss of the most knowledgeable agents
  • Cutbacks mean that the FBI has to prioritize, and white collar crime is further down the list than other issues

It’s reported that criminal cases referred to prosecutors by the FBI has dropped 26% in the last seven years. 11,029 cases were referred seven years ago. Just 8,187 were referred last year.

What happens when cases of fraud aren’t investigated by the FBI? Clearly the fear of being discovered decreases for the would-be criminals. But what if your company is a victim of fraud?  Many companies are left to their own devices to investigate fraud. They have to pay attorneys and fraud investigators (like me) to dig into the fraud allegations and pull together the evidence. A fraud examiner puts together a report and supporting documentation, and hopefully the FBI or the U.S. Attorney’s Office agree to take a look at the case.

Because it’s fully investigated and packaged for them, there’s a greater chance that they might consider prosecution. There’s still independent work that these agencies will have to do for any case they accept, but by doing the bulk of the legwork for them, a company has a better shot at action by the federal government.

This seems a little wrong, doesn’t it? As taxpayers, we believe that these watchdog agencies have a responsibility to enforce the laws and investigate financial fraud. They simply can’t do it all, and if an individual or company wants a criminal case pursued, they may have no choice but to bear the cost of much of the investigative work.

One thought on “When the Government Can’t Investigate Fraud

  1. SANDRA ASEREMO

    I have gave up on the government. From the police, district attorney , IRS, FBI etc. I have contacted all of them and none of them want to investigate. Here are the simple fact of what happened. My former pastor raised money to buy a church building. This is a church of 150 people. Extremely small church. A lot of people sacrificed and gave. The building cost $845,000. This was in 1998. Then My former pastor took out an equity of $510,000. The very next year. Nobody knew it except one person in the church office because he has to sign it too. As time goes by,equity grew.

    My former pastor is also the chief financial officer of a huge Ministry. So to get more money(equity) out, he had the church property transfer to this Huge ministry. Nobody knew that the building does not belong to the small church any longer. except again this one same person who works in the administrative staff.

    And sure enough, my former pastor kept draining the equity of the building and in the meantime kept asking from the church for donation for the building funds. In the meantime also, my former pastor bought a $1.13 million home.

    Since he is also the chief financial officer of a huge ministry, not just our senior pastor. He is in charge of this huge ministry money. The worldwide churches are required to donate 10% of their tithes. And he also is in charge of another ministry called World partner. World Partner is supposedly another ministry to fund the missionaries worldwide. Guess where all those money went ? TO his pockets and all his close friends pockets within this ministry.

    So what you are looking is like a Mafia church/ministry. Remember the person who signed the building over to the huge ministry ? yea , he was in the pockets too. Earning 6 figure income to do his bidding.
    My former pastor was earning $603,000 a year. His boss was making $800,000. And a lot of his friends within the ministry were earning $150,000 – $225,000.

    All of those money came from the worldwide tithes and World Partner ministry and some of it from the equities of our building.

    Now one of their friend is also doing the same thing as my former pastor is doing. He has his own ministry called Malachi Foundation. Malachi Foundation according to the IRS is to raise money for the poor , widows and the orphans and some allowance to the pastors.

    And guess where the money went ? Same people, to my former pastor and his boss. Its called money laundering. Its right there on file 990.
    Because my former pastor daugther was caught sleeping a another pastor who is married with 3 kids, he has to step down. The associate pastor has to take over the church. He was also paid in 6 figure income to NOT to question anything.

    When my former pastor step down and fled to Florida, thats when everybody realized that the building does not belong to the church. And all the building funds have disappeared. And the administrative person who signed the building over to the Hige Ministry is gone too.

    By this time, the same people who were being paid huge amount of salary, had made a few investigation themselves that sure enough, they are overpaid. That all of those money came from the missions. Some of the people who works directly for my former pastor, who knew the fraud going on, immedietly resigned. Because none of them want to be questioned.

    BUT Nobody wants to call the IRS or report to the police, because ALL of them were embarassed at the financial scandal at a huge scale. The loss is over $30 million in the span of 10 years.

    The church building was sold for $3 million. They received $800,000. The church received only $500,000. from the sale. The Huge Ministry kept $300,000 .

    What my former pastor doing right now ? starting a new church. Called Storyteller church in Irvine Ca

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