White-collar crimes are categorized
by deceit, concealment, or violation of trust and are not dependent on the application
or threat of physical force or violence. Such acts are committed by individuals
and organizations to obtain money, property, or services, to avoid the payment
or loss of money or services, or to secure a personal or business advantage.
The FBI investigates white-collar criminal activities, such as money laundering,
securities and commodities fraud, bank fraud and embezzlement, environmental crimes,
fraud against the government, health care fraud, election law violations, copyright
violations, and telemarketing fraud. In general, the FBI focuses on organized
crime activities that are international, national, or regional in scope and where
the FBI can bring to bear unique expertise or capabilities that increase the likelihood
of a successful investigation and prosecution. In the health care fraud arena,
the FBI targets systemic abuses, such as large-scale billing fraud that is national
or regional in scope and fraudulent activities that threaten the safety of patients.
The FBI pursues financial institution fraud involving $100,000 or more. In cases
of telemarketing and insurance fraud, the FBI will generally become involved where
there is evidence of nationwide or international activities.
INFRINGEMENT CASE: OPERATION CYBERSTORM
In March 2000, the FBI started
undercover operation CYBERSTORM to find and prosecute individuals and groups involved
in making and selling counterfeit software and illegally re-marking computer central
processing units (CPUs).
Several cooperative witnesses told investigators
that some individuals and companies in San Jose, California, were engaged in the
illegal remarking and brokering of CPUs and the manufacture and sale of counterfeit
computer software. Based on this information, as well as findings from a preliminary
FBI investigation, numerous individuals and companies were identified as being
involved in the production and distribution of re-marked CPUs and counterfeit
An undercover Agent started and ran a phony business engaged
in the buying and selling of gray market CPUs and computer software. In order
to be accepted by the computer industry, the Agent routinely purchased counterfeit
products and sold legitimate computer components to targeted companies.
CYBERSTORM uncovered a large network of software pirates and manufacturers in
California. On April 18, 2002, 27 individuals were arrested, and the counterfeit
products recovered during the conduct of these searches were estimated to be in
the tens of millions of dollars.
CARE FRAUD CASE: ROBERT R. COURTNEY
In July 2001, the FBI's Kansas City
Division discovered that Robert Courtney, a pharmacist, was diluting doses of
Gemzar and Taxol, two chemotherapy drugs used to treat cancer patients. Agents
set up a sting operation to purchase drugs from Courtney's pharmacy and sent approximately
six prescriptions to the Food and Drug Administration for testing. The tests showed
that prescriptions prepared by Courtney, which should have had 100 percent of
the prescribed drugs, actually had anywhere from 39 percent to less than 1 percent
of the cancer drug.
On August 23, 2001, a federal grand jury returned
an indictment against Courtney and his pharmacy, charging eight counts of tampering
involving serious bodily injury and twelve counts of adulteration/misbranding.
On February 26, 2002, Courtney pleaded guilty to all 20 counts and agreed to accept
a sentence of between 17 1/2 years and 30 years in prison, to forfeit all of his
property, and to provide the government with a full accounting of all his criminal
activities and the criminal activity of any other individual involved.
GOVERNMENTAL FRAUD CASE: APRIL 8 REALTY, LA PUENTE, CALIFORNIA
8 Realty fabricated and sold hundreds of false real estate loan file documents
to over 100 real estate agents and investors in the Los Angeles area between 1997
and 1999. The FBI's investigation included an undercover sting operation in which
real estate agents and investors were videotaped purchasing fraudulent loan documentation
as part of a joint Office of Inspector General, Department of Housing and Urban
Development, and FBI housing fraud initiative. The supporting documentation used
to qualify otherwise unqualified home buyers consisted of fraudulent W-2 forms,
manufactured employee pay verification forms, altered bank statements, and fictitious
letters of credit. In total, these fraudulent documents were used to secure over
1,000 US Government-insured loans. The investigation led to the guilty pleas of
18 real estate professionals involved in the fraud in 2001.
CARE FRAUD CASE: TAP PHARMACEUTICALS
In 1996, TAP Pharmaceuticals earned
$500 million on Medicare reimbursement for Lupron, a drug to treat prostate cancer.
TAP is not directly reimbursed by Medicare for purchases of Lupron. Rather, Lupron
is purchased by urologists from TAP's sales representatives. The urologist then
submits a claim to Medicare or any other insurance plan for reimbursement. Once
the urologist is paid, the urologist then pays TAP for his purchases of Lupron.
An FBI investigation revealed that TAP paid kickbacks to urologists. The kickbacks
were paid in several ways, including unrestricted grants and free samples, free
kits of Lupron, office equipment, software, and tickets to sporting and cultural
On October 3, 2001, TAP entered into the second largest health
care fraud settlement agreement in the United States. TAP was sentenced to a $290
million criminal fine and accepted a $585 million civil settlement. In addition,
TAP was required to pay interest of approximately $10 million as agreed to in
the settlement. Four urologists were convicted in connection with this case for
the selling of Lupron samples.
Combating significant violent crime is a traditional
area of FBI expertise. The Bureau concentrates on crime problems that pose major
threats to the integrity of American society, such as criminal street gangs, bank
robberies, carjackings, kidnappings, interstate transportation of stolen property
and motor vehicles, assaults and threats of assault on federal officials, assaulting
the President, theft or destruction of government property, and fugitive matters.