On February 14th, people rarely discuss the 1929 St. Valentine’s Day massacre. But, for citizens of Chicago, this date signified the end of a long period of conflict between two powerful criminal gangs in Chicago: the South Side Italian gang led by Al Capone and the North Side Irish gang led by Bugs Moran.
Not only did public outrage over the St. Valentine’s Day massacre end the long, bloody era of Al Capone, but, two short years later, Capone was finally sent to prison. Capone was convicted of income tax evasion and sentenced to ten years in a Federal institution, plus one year in the Cook County Jail for attempted jury tampering.
Lawyers well remember the arrest of Al Capone. His conviction for pettier crimes, such as tax evasion, has become a model for achieving creative justice.
In 1931, the U.S. government alleged Al Capone owed $215,080.48 in back taxes from his gambling profits. Adjusting for inflation, this amounts to just over $3 million.
Today, the Justice Department’s Criminal Division is looking for just $5 million. Why? To handle future financial fraud cases—cases that could, quite possibly, lead to the successful imprisonment of the current recession’s Al Capones.
According to budget documents submitted to Congress on Monday a mere, $5 million would create 28 new positions, including 16 prosecutors, to handle financial fraud cases.
The WSJ Law Blog reports, “Some of the prosecutors would likely be part of a new mortgage-crime unit to investigate possible financial-crisis era misconduct in the pooling and sale of residential mortgage-backed securities, the documents say.”
The new unit was also announced by President Barack Obama in his 2012 State of the Union address (via WSJ).
“Without the commitment of additional resources, the department’s expanding fraud caseload will outstrip its ability to handle such matters effectively and efficiently,” the department reportedly said to the WSJ.
“These resources will enable the department to hold accountable criminals who perpetrate financial and mortgage fraud, deter future perpetrators of fraud, and recover monies stolen from the U.S. taxpayer.”
According to the division’s budget justification, the Justice Department’s Criminal Division is seeking more resources in order to:
- Expanded use of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to pursue fraud involving federally insured financial institutions;
- Increased protection for federal programs important to the nation’s economic recovery, such as small business and student loan programs;
- Combat fraud against the government’s minerals royalty program — one of the largest nontax sources of federal revenue.
These investigatory resources would likely lead to growth within the criminal and real estate sectors of law. Good news for attorneys during a time when experts predict “tepid growth” in the legal industry.
President Obama appears to be on board, with his fiscal 2013 budget proposal allocating $36.5 billion to the Justice Department, an increase of $1.9 billion from the previous year.
Law firms should think about restructuring and broadening their services to include criminal defense or real estate and other financial fraud. Prepare your clients now, for a trend of increasing litigation by the Justice Department in the near future.