United States Attorney Kevin V. Ryan announced today that the Justice Department has selected the Northern District of California to receive nine new positions dedicated to the prosecution of corporate fraud.  The U.S. Attorney's Office in San Francisco received one of the highest allocations in the country.

The nine new positions will include four Assistant United States Attorneys and five support staff, including paralegals and financial analysts.  The new prosecutors and support staff will bolster the District's Securities Fraud Section, which is recognized as one of the Justice Department's premier units dedicated to the prosecution of accounting fraud, insider trading and obstruction of justice.

The new slots are based on funds included in the Justice Department's 2003 budget.  Nationally, Congress allocated funds for 35 new Assistant U.S. Attorney positions for all 93 U.S. Attorney's Offices.  U.S. Attorney Ryan received these four new attorney slots from the Justice Department to meet the District's rapidly increasing number of significant investigations and cases in the corporate fraud area.  The Justice Department evaluated all U.S. Attorney's Offices and determined, based on the caliber and complexity of cases brought, that the U.S. Attorney's Office in San Francisco merited over 10 percent of all attorney positions nationwide.  

"The Northern District has a proven track record for bringing important corporate fraud cases," said Acting Deputy Attorney General, Robert McCallum, Jr.  "In fact, over the last several years, the Northern District has become one of our model U.S. Attorney's Offices in the area of securities and corporate fraud, in its ability to work efficiently with the Securities and Exchange Commission, and in prosecuting increasingly significant cases quickly, aggressively and fairly."

U.S. Attorney Ryan is a member of President Bush's Corporate Fraud Task Force, a group of select U.S. Attorneys and agency heads (including the FBI and SEC) who meet regularly to set policy and make recommendations to the President and Attorney General on corporate prosecutions.  Since the Task Force was formed by Executive Order on July 9, 2002, the U.S. Attorney's Office in Northern California has brought corporate fraud cases against 17 individuals and one corporation, and obtained 16 convictions, in some of the most significant prosecutions in the country.   For example:

!McKesson/HBOC:  The former Board Chair and General Counsel were charged with securities fraud in connection with a $9 billion shareholder loss.  (United States v. McCall & Lapine).

!Ernst & Young:  A former E&Y partner and a former E&Y associate were charged with obstruction of justice for destroying accounting work papers in connection with the investigation of one of E&Y's clients (United States v. Trauger; United States v. Flanagan).

!Enron:  Two Enron executives have pled guilty to conspiracy and false statement charges, and a third has been charged with wire fraud, in connection with the manipulation of California's energy markets during the height of the energy crisis.  (United States v. Belden; United States v. Richter; United States v. Forney)

!U.S. Wireless:  The former CEO and the former General Counsel were indicted for wire and securities fraud (United States v. Hilsenrath and Klarman)

!Network Associates:  The former Vice President of Finance of the company pled guilty to securities fraud.  (United States v. Davis)

!Guidant Corporation:  A wholly owned subsidiary of the Fortune 100 Company pled guilty to 10 felonies and agreed to pay $92.4 million in criminal fines and civil penalties for covering up thousands of malfunctions in a medical device–the largest criminal and civil penalty ever in such a case.

!Media Vision:  The former Chief Financial Officer was convicted after a jury trial of securities fraud.  (United States v. Allen)

!Informix:  The former Chief Executive Officer of the company was indicted for securities fraud.  (United States v. White)

!Critical Path:  The former president pled guilty to securities fraud and three vice presidents of sales pled guilty to insider trading. 

In announcing the new slots, Mr. Ryan emphasized that the U.S. Attorney's Office in the Northern District of California would continue to lead the way in corporate fraud prosecutions.  "The U.S. Attorney's Office in San Francisco is recognized nationally as one of the premier federal prosecutor's offices in the country, especially in the area of corporate fraud.  I have sought to expand the District's focus on corporate wrongdoing with all the tools at our disposal.  These new positions add crucial resources to our efforts.  I am grateful to the Department of Justice for its strong support of the Northern District in an area that will continue to be one of the top prosecution priorities for this Office."