North Carolina prosecutors contend that many financial and white collar crimes have gone undetected for years in the state.
Whether it is mortgage fraud, embezzlement or obtaining property by false pretenses, the cases can be intricate and often require a different investigative expertise from that used for violent crimes.
So, the N.C. Conference of District Attorneys has launched a new financial crimes initiative.
With a portion of the $338 million from the National Mortgage Settlement that came to North Carolina last year, the conference has hired a White Collar Crime Resources Prosecutor.
Tammy Smith, a Campbell University law school graduate who worked in private practice for 10 years before a two-year-stint as legislative counsel for the Administrative Office of the Courts, will be the first person in the post. She will work with a team of regional prosecutors expected to come on board in mid-February or March. The prosecutors will work with district attorneys across the state and the state Attorney General’s Office.
“What we hope to do is take some of the constraints off the local offices,” Smith said.
The program was launched with $6.7 million that state Attorney General Roy Cooper set aside from the fraud settlement. He and other top prosecutors across the nation reached a landmark agreement last year with the country’s five largest mortgage providers.
“Financial crime prosecution is intricate and difficult,” Cooper said. “Often those cases get pushed to the sides of a prosecutor’s desk because they’re so difficult and take lots of time.”
Under the Conference of District Attorneys initiative, investigators and prosecutors with expertise in accounting and mortgages will turn their focus to fraud and other financial crimes that are becoming more common across the nation and in North Carolina, according to law enforcement officials.
Jacksonville, an Onslow County town with lots of housing turnover, was listed last year as a new hot spot on National Fraud Risk indexes, Smith said.
Smith and Cooper say mortgage fraud, forgery, obtaining property by false pretenses and other financial crimes can take a costly toll on the entire state, residents and businesses.
“Criminals see it as low risk, high gain,” Smith said.
Prosecutors hope their use of the settlement money will change that trend.
More federal efforts, too
Cooper said his office is in the midst of forming a statewide financial crimes task force that will work with the new prosecutors and those in the civil consumer complaints division, who often are the first to hear about suspected financial crimes.
The focus at the state level coincides with stepped up federal efforts, prosecutors say.
The past several years – with rampant foreclosures, desperate homeowners, record-low interest rates and billions in available government aid – have been fertile ground for scam artists and shady business owners.
Though federal prosecutors have filed hundreds of lawsuits and sent out thousands of cease-and-desist orders to questionable businesses, high levels of financial fraud persist.
Some of the cases in North Carolina might be ripe for federal prosecutors, Cooper said. But he also hopes the new white collar crime prosecutors will keep a wide and varied focus.