Posts Tagged ‘Wiretaps’

Gordon Gekko Changes His Mind, Says Greed Is Bad

Tuesday, March 6th, 2012

Actor Michael Douglas is playing a new and rather surprising role as spokesman for the FBI to fight corruption on Wall Street.  The actor – famous for his line “greed is good” in the 1987 film “Wall Street” – is sending a new message in a public service announcement, explaining that insider trading is a serious crime.  “The movie was fiction, but the problem is real. To report insider trading, contact your local FBI office,” Douglas says in the spot.

“In the movie ‘Wall Street,’ I played Gordon Gekko, a greedy corporate executive who cheated to profit while innocent investors lost their savings,” according to Douglas.  “The movie was fiction, but the problem is real.  Our economy is increasingly dependent on the success and integrity of the financial markets.  If a deal looks too good to be true, it probably is,” he concludes.  The one-minute commercial opens with Douglas as he looked in 1987 and in the Gekko character famously addressing a fictional shareholders meeting in the movie, before the clip cuts to the grey and older actor who is now working for federal law enforcement.

Douglas’ new role is part of the FBI’s “Perfect Hedge” operation, which has successfully prosecuted 57 individuals in the last five years for insider trading, and is targeting 120 more suspects.  The commercial is part of the ongoing effort, and will feature segments of actual FBI wiretaps from successful prosecutions.

So far, the new video — which is being shown on CNBC and Bloomberg Television — is part of the government’s broader initiative aimed at drawing cooperating witnesses and tipsters from Wall Street.  Previously, insider trading was not one of the FBI’s areas of focus, so potential informants might not have known where to turn, according to the accepted wisdom.  Now that the crime is a top priority for securities investigators, the video is part reminder, part plea for those who have seen something illegal to come forward and provide information.  Additionally, the video is an effort to raise the FBI’s public profile.  As David A. Chaves, a supervisor and special agent, said, “It’s important for us to have the FBI brand out on Wall Street.  He’s talking about himself as Gordon Gekko and the role that he played and how that was fiction and this is not but about real crime on Wall Street.”

Several government agencies are investigating illegal behavior on Wall Street, from the FBI to the Securities and Exchange Commission and other regulators.  To build their cases, investigators use uncompromising tactics once reserved for organized crime and terrorism cases, such as wiretaps and well-placed cooperators.  The FBI’s attitude is who could be a better spokesman against insider trading than the man who played Gordon Gekko, who came to personify Wall Street crime in both the 1980s and in the recent financial crisis with the 2010 sequel, “Wall Street: Money Never Sleeps.”  “The more people out there aware of the problem, the more opportunities we have to get tips,” said Richard T. Jacobs, a FBI supervisory special agent, who helped bring a major insider trading case which resulted in the conviction of a billionaire hedge fund manager.

The campaign also is targeting embezzlements by stockbrokers and Ponzi schemes — which have surged since the financial collapse of 2008.  Since then, securities and commodities fraud investigations have risen 52 percent, from 1,210 inquiries to 1,846 last year, the FBI said.

According to FBI spokesman Bill Carter, the spot will be distributed to 15 cities — Atlanta, Boston, Charlotte, Chicago, Dallas, Denver, Los Angeles, Miami, New York, Newark, Philadelphia, San Francisco, Seattle, Washington and New Haven, CT – all of which have seen an increase of fraud cases or evidence of potential trouble.

Surprisingly, Douglas was “startled over the positive response he received as Gordon Gekko,” Chaves said.  “I don’t know what’s wrong with Wall Street but I would be approached all the time, people would ‘high-five’ me or shake my hand for being this terrible man who stole people’s money.  Where are the values?  What are people thinking when I’m held like a hero in that role?  The culture has to change.”

Attorney General Eric Holder affirmed that the Justice Department is committed to rooting out corporate crime.  “From securities, bank and investment, to mortgage, consumer and health-care fraud, we’ve found that these schemes are as diverse as the imaginations of those who perpetrate them, and as sophisticated as modern technology will permit,” Holder said.

Convicted Illinois Governor Sentenced to 14 Years

Monday, December 12th, 2011

Former Illinois governor Rod Blagojevich became the state’s second chief executive in a row to be sentenced to federal prison for corruption.  Blagojevich, who – among other charges was convicted of attempting to sell President Barack Obama’s Senate set to the highest bidder – was sentenced to a stiff 14-year sentence in a federal prison.  He must report to the Federal Bureau of Prisons on February 16, 2012.

Blagojevich’s predecessor, George Ryan, is currently serving a 6 ½-year sentence at a federal prison in Terre Haute, IN, also for corruption.

“The governor was not marched along this path by his staff.  He marched them,” Zagel said before he imposed the sentence.  Blagojevich governed the fifth-most populous state from January 2003 until his impeachment and removal from office in January of 2009.  He had been arrested the previous month for what Chicago U.S. Attorney Patrick J. Fitzgerald called “a political corruption crime spree.”  Blagojevich was convicted on 17 counts in a trial that ended in June.  An earlier jury deadlocked on 23 of the 24 counts it considered, but found the ex-governor guilty of lying to federal agents.

Blagojevich admitted to the judge that he made “terrible mistakes” and acknowledged that he broke the law in his attempt to sell the Senate seat.  His attorneys admitted for the first time that Blagojevich is guilty of corruption.  The defense also presented sincere appeals from Blagojevich’s family, including letters from his wife Patti and one of his two daughters, that pleaded for mercy.  But the judge made it clear that he believed that Blagojevich had lied on the witness stand when he tried to explain his scheming for the Senate seat, and he did not believe defense suggestions that the former governor was duped by his advisers.

Assistant U.S. Attorney Reid Schar wasn’t impressed by Blagojevich’s emotional plea.  “He is incredibly manipulative and he knows how to be,” Schar said.  “To his credit he’s clever about it.  Judge, the defendant is corrupt, he was corrupt the day he took office, he was corrupt until the day he was arrested,” Schar said.  “Judge, the people have had enough.  They have had enough of this defendant.  They have had enough of people like him.”  The lengthy legal ordeal began when President Obama’s U.S. Senate seat became available upon his election.  Wiretaps of Blagojevich were recorded saying that Obama’s seat was “f — ing golden” and that it wouldn’t go “for f — ing nothing.”

So now what does Blagojevich do? He’ll spend the holidays with his family.  Next, his legal team will ask Judge Zagel to choose a prison, preferably in the Midwest, said Kent College Law professor Richard Kling.  Because the sentence is more than 10 years, he’ll be classified in a low-security prison with double-fence razor wire.

Judge Zagel sternly told Blagojevich that “abuse of the office of governor is more damaging than the abuse of any office in the United States except for president.  “I cannot comprehend that even if you are guilty,” Zagel said.  “You don’t think you caused harm to Illinois.”

“Blagojevich betrayed the trust and faith that Illinois voters placed in him, feeding great public frustration, cynicism and disengagement among citizens,” Fitzgerald said.  “People have the right to expect that their elected leaders will honor the oath they swear to, and this sentence shows that the justice system will stand up to protect their expectations.”  “This sentence sends a clear message that public officials cannot engage in corruption for personal benefit in exchange for political favors,” said James Vanderberg, special agent-in-charge of the Chicago Regional Office of Inspector General.

If Judge Zagel has any second thoughts about the sentence, he can take satisfaction in the fact that some of the jurors from the corruption trials approve of the 14-year sentence.  James Matsumoto, the jury foreman from the first trial, said he and other jurors were “satisfied” by the sentence.  John McParland, a juror at the second trial, saw a less-cocky Blagojevich today but wasn’t certain the former governor in fact apologized for his actions.  “He’s like two different men,” McParland said.  “His apology was a little circumspect,” according to Matsumoto.

Under federal sentencing guidelines, Blagojevich won’t be eligible for release until early 2024 when he will be 67 years old.  Additionally, Blagojevich is planning to appeal his sentence, a process that could take years.