It’s not just monolithic corporations, financial institutions, state governments and the like that are benefiting from bailout funds. Scam artists stand to make a killing also, the FBI says:

“These funds are inherently vulnerable to bribery, fraud, conflicts of interest and collusion. There is an old adage, that where there is money to be made, fraud is not far behind, like bees to honey,” FBI director Robert Mueller told an afternoon gathering of business executives.

Law enforcement agencies faced a similar scenario after Hurricane Katrina, with a task force created in the wake of the 2005 storm so far convicting 246 people of fraud and other crimes related to relief funds in Mississippi and Louisiana, Mueller said.

Given the trillions and trillions of dollars involved in the government’s current moves to stem the economic crisis, “from the purchase of troubled assets to improvements in infrastructure, health care, energy and education — even a small percentage of fraud would result in substantial taxpayer losses,” said Mueller, a former U.S. attorney who had specialized in white-collar crime litigation while a lawyer in private practice.

It’s a not-so-surprising yet still chilling horror story from one of the nation’s top law enforcement authorities. Mueller goes on to say that the FBI doesn’t have the resources to track down “every criminal threat,” meaning he’s worried that some fraud will never be discovered.

FBI Director Anticipates New Crime Wave Of Financial Fraud [Morning Star] (Photo: peasap)

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