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There’s Never Been a Better Time to Be a White-Collar Criminal

Thanks to the Trump administration’s signature mix of incompetence and corruption, America is knee-deep in fraud and corporate malfeasance.

In mid-June, a reporter at an Israeli news outlet gave me some startling information about an international criminal investigation that I had led while working as a prosecutor at the Justice Department. Until earlier this year, I had specialized in white-collar crime in an office based in Washington, D.C. My work, along with that of two outstanding FBI agents, had resulted in the conviction last year of an Israeli citizen named Lee Elbaz. Elbaz had directed a massive fraud—a crude but surprisingly effective scheme that resulted in nearly $150 million in losses to victims throughout the world who had been led to believe that they were investing in obscure financial instruments known as binary options.

Elbaz, however, was not the most significant player in this crime ring. That distinction seemed to fall to a man named Yosef Herzog who had also been charged, along with about 20 other people. I had charged Herzog with wire fraud early last year, when he was living in Israel.

The investigation then took a series of turns, for reasons that The Times of Israel discussed in its eventual story. But what I did not know—and what I learned from the reporter that day in mid-June—was that a senior official at the Justice Department had allowed Herzog to flee Israel, presumably by accident, by giving him the details of an ongoing extradition process. A year later, no one seems to know where he is.

By itself, this would be bad enough. The mastermind of a large international fraud had apparently been allowed to escape—for now, at least—as a result of the incompetence of a senior Justice Department prosecutor. But this episode also encapsulated many of the problems that I came to see while working at the agency: relative disinterest in real-world fraud; an obliviousness to the sophistication of criminals who many see as nuisances but who are in fact wreaking widespread havoc; and high-level ineptitude by previously low-level prosecutors who somehow managed to rise quickly in recent years. Together, these trends point to the precarious state of our white-collar criminal enforcement program under the Trump administration.

In January, before the pandemic destabilized federal law enforcement efforts, the number of new federal white-collar prosecutions reached an all-time low, according to data spanning nearly 35 years. Just 359 new defendants were prosecuted for white-collar crime across all 94 federal districts, down 25 percent from five years before.

It was at least the fourth time since the start of the Trump administration that Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, which compiles the data from requests under the Freedom of Information Act, had announced an all-time low in the number of federal white-collar prosecutions. The decline was the continuation of a trend that began at the end of Barack Obama’s first term—but one that should not have continued this long, let alone accelerated so noticeably.

The figures, disconcerting enough on their own, tell an incomplete story. Things are even worse than they look. Three and a half years after Trump took office, white-collar criminal enforcement is in its worst state in modern history—the result of top-down disinterest in, and occasional outright hostility toward, prosecuting financial crimes; the installation of inexperienced and occasionally inept political appointees and senior officials; and enforcement priorities that are alternately misguided, inexplicable, and politically motivated. Virtually every part of the white-collar enforcement apparatus at the Justice Department is broken.

As we approach the end of Donald Trump’s first term, it’s clear that it’s never been a better time to be a white-collar criminal. Amid a pandemic that shows no sign of abating, as well as an economic recession that shows all signs of getting horribly worse, the question is whether anyone—including Trump’s possible successor, Joe Biden—is going to do anything about it.


Edwin Sutherland, the criminologist who coined the term “white-collar crime” in the first half of the twentieth century, used it to describe “a crime committed by a person of respectability and high social status in the course of his occupation.” That definition is subject to broad interpretation, and in modern parlance “white-collar crime” usually connotes various forms of financial fraud. TRAC, for instance, uses the term to describe “some form of fraud or anti-trust violations involving financial, insurance or mortgage institutions; health care providers; securities and commodities firms; or frauds committed in tax, federal procurement or federal programs among others.”

Crackdowns on white-collar crime tend to be countercyclical. When the economy suffers a downturn that appears to stem from corporate malfeasance, policymakers and the public demand a response from the Justice Department. Often those responses are disappointing, since the Justice Department, having failed to detect the corporate malfeasance in question for years, cannot quickly change course and start prosecuting people successfully.

It is well known and oft-repeated, for instance, that there were virtually no prosecutions of high-level corporate executives after the last financial crisis. Serious criminal investigations can take years under ordinary circumstances, and in particularly complex areas of the economy that were not being closely scrutinized by either Congress or executive branch agencies, white-collar prosecutors first have to try to learn how the markets work. They then face considerable challenges when trying to build cases around potential criminal misconduct in large and organizationally opaque companies that also happen to have virtually limitless resources to mount a defense. The system, at least as it is currently structured, is simply not well equipped to prosecute, say, an executive of a global bank that has legally traded in securities underwritten by mortgages procured by predatory lenders—or even the lenders themselves.

Our current economic crisis is the first in over three decades that does not appear to have been the result of corporate malfeasance. Until it hit, high-level market indicators—like the stock market and unemployment—were performing well, and the stock market has since recovered most of its losses from earlier in the year. As a result, it is tempting to believe that white-collar crime may have been declining or stagnant, but in fact, data suggests that it’s been rising for years.

The Justice Department does not conduct surveys to gather data on the prevalence of white-collar crime (as it does for other crimes), but data from both public and private institutions is consistent on this point. Late last year, for example, the Federal Trade Commission estimated that 40 million Americans had been victimized by mass-market consumer fraud in 2017, representing nearly 62 million incidents. Those figures were each more than 50 percent higher than they were six years before. The frauds span a broad spectrum. They include scams in which people are falsely told that they owe the government money (perhaps due to a supposed court case or back taxes) and the sale of fraudulent weight-loss products like dietary supplements (another surprisingly effective form of fraud that, according to the FTC’s estimate, victimized more than six million Americans).

In February, the FBI released its annual report on internet crime. It concluded that 2019 “saw both the highest number of complaints and the highest dollar losses reported” in 20 years—an average of nearly 1,300 complaints a day, with “more than $3.5 billion” in reported losses to individuals and businesses. These included losses due to phishing scams (the most frequent complaint, resulting in about 115,000 reports and nearly $60 million in losses) and so-called “business email compromise” scams, increasingly sophisticated schemes in which scammers use spoofed or hacked email accounts to fraudulently solicit money (the costliest source of complaints, resulting in about $1.8 billion in reported losses).

Days later, a working paper from the University of Pennsylvania’s Institute for Law and Economics concluded, based on roughly two decades’ worth of data, that criminal misconduct at financial institutions has been “on the rise.” Though it was a working paper, the methodology was hard to dismiss: Using a variety of sources, the authors documented a steady increase in reports to regulators of misconduct at financial institutions—a broad array of potential wrongdoing that included suspected money laundering, various consumer frauds (like credit card, payday loan, and student loan fraud), and violations of securities laws (such as market manipulation, accounting fraud, and insider trading).

A couple of weeks after that, PricewaterhouseCoopers issued a report based on a global survey of more than 5,000 companies that concluded that “fraud and economic crime rates” are at “record highs.” The company estimated that this had resulted in $42 billion worth of losses in the last two years due to things like suspected tax fraud, money laundering and sanctions violations, bribery, and antitrust violations.

In other words, we are not just talking about Wall Street fat cats or private equity raiders unscrupulously lining their own pockets. We are talking about widespread fraud, at every level of commerce, from offers of diet pills in your email inbox to tax fraud at multinational corporations. So why isn’t the Justice Department stepping in?


The decline in white-collar prosecutions—even in the face of data indicating that financial crimes are rising—is no coincidence. A minority of voters in 2016 elected a man as president who created a fake university that defrauded thousands of Americans out of millions of dollars—a scam that resulted in his agreement to settle the resulting cases for $25 million. He was also accused of using his charitable foundation for all sorts of financial shenanigans—“in persistent violation” of the law, according to New York authorities—including buying a portrait of himself. Donald Trump was never likely to strike a hard line on the issue of white-collar crime.

Trump has had an obvious impact on certain prosecutions. For instance, he has been vocal about his disdain for the Foreign Corrupt Practices Act, or FCPA—the federal statute that prohibits the bribery of foreign government officials—claiming that it puts U.S. companies (like his) at a disadvantage when competing for business overseas. According to data maintained by Stanford Law School, the number of Justice Department “matters” under the statute—a term that groups multiple investigations and cases if the underlying facts are the same—has been lower during each year of the Trump administration than at any point during the Obama administration.

Trump’s two attorneys general—Jeff Sessions and William Barr—have been at best indifferent to prosecuting white-collar crime. Sessions used the job to pursue his years-long crusade to crack down on illegal immigration. Barr has used it to advance his interest in expanding executive power and to promote Trump’s political and personal interests—intervening in the prosecutions of Trump allies Roger Stone and Michael Flynn, traveling around the world to pursue Trump’s unhinged conspiracy theories, and preemptively shutting down a criminal inquiry into Trump’s shakedown of Ukrainian President Volodymyr Zelenskiy, to name just a few such efforts.

What happens at the level below the attorney general is a more complicated affair, with more subtle causal mechanisms. The federal white-collar criminal enforcement regime is the cumulative output of different offices at the Justice Department whose work is structured in different ways. Many of the most high-profile white-collar prosecutions are carried out by U.S. attorneys’ offices in a small number of districts—those that include Manhattan, Brooklyn, Chicago, Los Angeles, New Jersey, Northern Virginia, and Washington, D.C. The priorities of those offices are broadly set by presidentially appointed U.S. attorneys with input from the attorney general and senior political appointees in Washington, who can instruct them to focus on things like illegal immigration through directives that siphon resources away from other federal law enforcement work.

Another enforcement arm consists of prosecutors based in Washington—so-called “Main Justice” lawyers—who handle cases throughout the country, sometimes partnering with prosecutors in U.S. attorneys’ offices. This arm includes (among others) a unit that specializes in money laundering, a unit devoted to public corruption, and the Fraud Section—the office where I used to work until earlier this year, and which comprises a group of roughly 150 prosecutors who specialize in financial fraud, health care fraud, and the FCPA.

The political appointees and senior career officials now at the helm of the Justice Department’s white-collar enforcement program have implemented a number of formal policy changes that have resulted in fewer and more lenient investigations and prosecutions. These include expanding policies that allow prosecutors to decline pursuing corporate criminal cases and to reduce financial penalties if companies self-report and cooperate with investigations. The department also relaxed a policy that was put in place during the Obama administration that was supposed to increase the number of prosecutions of individuals involved with corporate misconduct—by forcing prosecutors to do more than just enter into multimillion-dollar settlements with the companies and move on, a practice that has basically baked crime into the cost of doing business.


What makes all of this harder to track is that most of the work that political appointees do is not formalized in policy documents or memos. According to news reports, Justice Department officials have halted or substantially watered down several criminal investigations into misconduct at some of the country’s large companies.

In one case, officials in Texas pushed for prosecutions against Walmart for the inappropriate prescription of opioids, but they were shut down by appointees in Washington. (The U.S. attorney who ran the office in question—a Republican—resigned earlier this year, with little explanation.) In a similar episode, political appointees intervened to substantially reduce the financial penalties against two banks—Barclays and Royal Bank of Scotland—in connection with the sale of residential mortgage-backed securities that began under the Obama administration. (Yet another story reported a similar series of events in a settlement concerning misconduct at Merrill Lynch—a settlement that I worked on.)

It is not unusual for large corporations to lobby through internal “appeals” at the Justice Department to persuade more senior officials that prosecutors should pursue less aggressive measures or settlement terms. But it is unusual for the results to be so controversial that people involved would speak at length with reporters about them. In the case of the Walmart investigation, for instance, a story from ProPublica relied on “interviews with nine people familiar with the investigation” and provided detailed descriptions of high-level meetings within the department, as well as accounts of in-person and written exchanges between the prosecutors and Walmart lawyers.

How much of this reflects actual hostility to white-collar prosecution among senior officials—as opposed to inexperience or ineptitude—is an open question. It is widely known in legal circles that conservative lawyers now in private practice who may once have staffed the senior positions of a Republican Justice Department have been reluctant to join the Trump administration out of fear of becoming permanently tainted (a risk that, in addition, might harm their private sector earning potential). The result has been a conspicuous shortage of conservative-leaning talent—lawyers who wouldn’t stifle or mismanage white-collar enforcement efforts—coupled with the upward ladder-climbing of underqualified and occasionally inept career lawyers.

Some of the people now at the top of the Justice Department are comically unfit. Bill Hughes, one of the high-ranking officials overseeing the department’s work pursuing coronavirus-related misconduct, is an associate deputy attorney general who, according to his LinkedIn bio, came to his position from the White House barely a year ago, with no prior experience working at the Justice Department except for a summer internship as a law student nearly 15 years ago. He appeared at a hearing before the Senate Judiciary Committee in June, but his answers to questions about the department’s pandemic response were vague and vacuous. At one point, a visibly annoyed Senator Dianne Feinstein pressed him about the department’s work pursuing perpetrators of consumer fraud, asking him in frustration, “What is being done to stop them—to arrest and convict?” Hughes told her that the department was “vigorously investigating and using the tools we have, both criminal and civil,” and proceeded to cite the possibility of obtaining forfeiture of fraudulent gains at the end of a successful criminal prosecution—a nonanswer to the question at hand that also betrayed a law-student-level understanding of criminal procedure.

I saw less egregious instances of these sorts of questionable appointments in my own day-to-day work. As some news reports have indicated, this occasionally resulted in me getting into professional disagreements with officials who had been mid-level managers during the Obama administration but had managed to get promoted under Trump. Before his ascension, for instance, Robert Zink, the current head of the Fraud Section, was best known for leading a high-profile prosecution of a trader at the Swiss bank UBS that resulted in the defendant’s acquittal in 2018—the sort of misstep that usually does not result in a promotion shortly thereafter. And Brian K. Kidd, the current head of the securities and financial fraud unit in that office, came to the position after serving as a prosecutor in Puerto Rico and in the public corruption division in Washington—best known for mishandling virtually every high-profile case it has pursued, including the failed prosecutions of former Virginia Governor Bob McDonnell and New Jersey Senator Bob Menendez. Kidd’s most notable achievement is having worked on one of the many corporate settlements during the Obama administration.


Fewer and more lenient investigations and prosecutions are just one part of the story. What has been left of the Trump Justice Department’s white-collar work has included an eye-opening number of high-profile failures and embarrassments.

For instance, despite a years-long investigation into misconduct relating to the so-called Libor scandal that resulted in billions of dollars in corporate penalties being paid to U.S. and European authorities during the Obama administration, no one has gone to prison in the United States. Two traders at the Dutch bank Rabobank had their convictions reversed in 2017. The last trial concluded in late 2018, and although the defendants—two Deutsche Bank traders—were convicted, they received no jail time after the presiding judge concluded that the department had given a pass to more culpable people and turned two “minor participants” into scapegoats.

Last March, a judge in San Francisco threw out charges against a Barclays trader in the middle of a trial over manipulation in the foreign exchange market, after telling prosecutors on the case that they did not understand “the business” at issue. Multiple news reports correctly described this as a “rare move.” (I worked on that investigation for several months near its inception, but I was not involved in the decision to bring the charges or in prosecuting the case.)

In November, in a case in Brooklyn involving alleged fraud by two hedge fund executives who had been accused of misleading bondholders in an oil and gas company, a judge overturned guilty verdicts returned by a jury after concluding that the evidence was too thin. The case is now on appeal, but its prospects are unclear. The court that handles appeals from cases in New York federal courts has increasingly proven hostile to prosecutions in which the nominal victims are highly sophisticated financial players who are ostensibly capable of defending their own interests.

Last December, prosecutors lost an FCPA case, again in Brooklyn, after a jury quickly concluded that there was no jurisdiction in the district. The result appears to have turned on an arcane legal requirement, but it is a crucial one in cases involving foreign conduct. Observers called it “a blow to U.S. efforts to police corruption abroad” and a demonstration of the “flaws in U.S. efforts to prosecute overseas bribery.”

In February, a judge in Connecticut overturned guilty verdicts under the FCPA in a prosecution of a former executive at a French company alleged to have been involved in the bribery of Indonesian officials. He remains convicted of money laundering—but unless the judge’s decision under the FCPA is reversed on appeal, it will result in a further erosion of the department’s ability to pursue individuals who violate the statute from abroad.

And in June, prosecutors in Manhattan moved to dismiss the charges against an Iranian businessman who had been convicted earlier in the year on charges of using the U.S. financial system to move money to fund a Venezuelan construction project on behalf of the Iranian government. Prosecutors were accused of violating discovery obligations; among such alleged lapses was a fundamental failure to promptly disclose exculpatory evidence that had become a hot-button issue during trial. The presiding judge ordered prosecutors to answer a lengthy list of questions concerning the discovery problems, as well as the involvement of more senior prosecutors supervising the case. The only remaining question appears to be how much trouble the prosecutors will get in based on the disclosures of potential misconduct to date.

To be clear, with the exception of the last case, I do not blame the line attorneys involved in these cases, which were all challenging in different ways. But a damning record like this reflects a serious deficit of judgment and competence among the senior career officials and political appointees in the Trump administration who oversee this work. They are supposed to monitor the progress of complicated investigations and ask difficult questions before complex cases are charged—often substantially shaping the decisions that are made along the way and the prosecutions that are ultimately brought. They are also supposed to help ensure that the government successfully navigates the gauntlet of legal issues that arise throughout the prosecution and that the government puts on a case at trial that maximizes the odds of a conviction.


Even the department’s current marquee white-collar initiative—a crackdown on a market manipulation practice known as “spoofing”—has proven to be a source of considerable embarrassment. (I contributed to the effort before I left the agency.)

Spoofing is a tactic used to manipulate prices on financial exchanges through the rapid placement and cancellation of orders. As reported in the book Flash Crash, by the financial journalist Liam Vaughan, the practice was criminalized in 2010 with the support of high-frequency trading firms whose algorithms and profitability are hampered by spoofing.

The Justice Department has spent more than $4.5 million alone on private data consultants working on spoofing cases (principally in markets for precious metals futures, like gold and silver). This is a staggering figure when you consider that the entire budget of Main Justice’s Criminal Division—which includes the department’s centralized efforts to prosecute (among other things) child exploitation, international drug trafficking, and computer crime, along with white-collar crime—is about $200 million. And the money spent on outside data analysis does not include the countless man-hours that more than a dozen prosecutors have spent on the cases in recent years.

Meanwhile, it’s exceedingly difficult to identify the real-world victims of spoofing on Wall Street. There is no demonstrable relationship between spoofing and the real economy or the average person. In fact, spoofing-related losses to other market participants are both small and diffuse. The high-frequency trading firms that are the biggest “victims” of spoofing are immensely profitable companies that most people have never heard of. They include a company called Quantlab, which makes hundreds of millions of dollars a year, and Citadel Securities, a trading firm owned by a billionaire that made over $2 billion in profits in 2018. What’s more, the allegedly wronged parties in spoofing cases—the high-frequency trading firms on Wall Street—are themselves anything but upstanding financial citizens. One recent study from the U.K. Financial Conduct Authority concluded that the tactics of such firms are costing other investors in global equity markets about $5 billion a year.

The Fraud Section has lost the only two spoofing cases that have been taken to trial, and although it has obtained pleas from about a half-dozen people who admitted to spoofing, the two defendants who have been sentenced to date did not receive any prison time. This is not a good record. According to federal statistics, about 98 percent of all federal defendants plead guilty, nearly 90 percent of convicted defendants are sentenced to some prison time, and almost 90 percent of defendants who go to trial in fraud cases are convicted.

None of this has stopped the Justice Department from trying to portray this seemingly pointless endeavor as a stirring success. Last November, the agency claimed that its anti-spoofing work would lead to different types of data-driven prosecutions and an increased enforcement presence in commodities markets. Many months later, neither of those things has happened, but senior officials are still publicly commenting on and possibly leaking details of the department’s work as part of a highly unusual public relations effort—one that demonstrates a Trump-like shamelessness in claiming stunning success on a record that is at best mixed. These overblown claims reek of desperation—they represent a harried bid to justify what might otherwise be regarded as a multimillion-dollar boondoggle. They also bespeak no small failure on the part of officials to come up with a better way to use scarce resources at a time when financial crime is more widespread than ever.


The coronavirus pandemic is putting some of the Justice Department’s recent failures into stark relief. To be sure, the pandemic has created some significant challenges—such as the logistical difficulties of conducting in-person interviews—that are out of the agency’s control. Even so, the department seems to be devising entirely new ways to fail in its mission.

The conventional wisdom is that the pandemic has probably increased the prevalence of white-collar crime, and the Justice Department has claimed that there will be an uptick in prosecutions later this year as ongoing investigations yield indictments. These cases could, in theory at least, include offenses such as accounting fraud (to hide losses from investors), bribery (to generate business), procurement fraud (to obtain government contracts for relief work), antitrust violations (to fix prices for in-demand products), insider trading (to mitigate losses resulting from declining stock prices), and government program fraud (to obtain benefits from various economic relief programs). In the ordinary course of events, investigations like these take a considerable amount of time, so it is too early to render a verdict on the department’s work, but the early indicators are not promising.

The Justice Department’s white-collar prosecutions over the initial phase of the pandemic have focused on hoarding and price-gouging on medical supplies, as well as fraudulent applications for relief from the Paycheck Protection Program. The former body of prosecutions would conveniently deflect blame from the Trump administration’s failure to stockpile much-needed medical equipment early this year—but the evidence so far suggests that there was actually very little hoarding or price-gouging in these areas. (A summary of the effort in June by the head of the agency’s task force identified just three prosecutions, though several others have been brought based on alleged fraud or misbranding.) And the PPP fraud cases so far have focused largely on crude and ultimately unsuccessful efforts to defraud the program.

Meanwhile, the Justice Department is doing little about perhaps the most successful coordinated fraud on government programs in history—a scheme to defraud state unemployment agencies using stolen personal information from Americans that has cost states hundreds of millions—perhaps even billions—of dollars in fraudulent benefits. There is also no indication that the department is doing anything meaningful about a persistent wave of coronavirus-related consumer fraud—which, based on data from the FTC, has increased by more than 3,000 percent since late March, now reaching more than 137,000 complaints reporting more than $90 million in losses.

These schemes share several features that reflect long-term failures in the Justice Department’s white-collar enforcement regime that have gotten noticeably worse under the Trump administration: They are likely being perpetrated in large numbers by criminals who are overseas; they involve losses that are relatively small on an individual basis but huge in the aggregate; and, in the case of consumer fraud, they are concentrated in markets that draw less attention from white-collar prosecutors than they should.


This enforcement failure also raises difficult questions of economic and racial equity that are usually overlooked in discussions about white-collar crime.

We lack systematic data on the demographics of offenders and victims of white-collar crime, but the available evidence suggests that white-collar criminals are more likely to be white. This would probably come as no surprise to most people, who likely see someone like Bernie Madoff as the archetypal white-collar defendant: white, male, and wealthy.

The victim side of the equation is more complicated. Our existing approach to white-collar crime coddles the wealthy while leaving the vulnerable to fend for themselves. The victims are the people whose economic interests the government is devoting resources to protecting and, in some cases, promoting—and so who is considered a victim of a financial crime reveals a lot about the government’s priorities. The upshot of the Justice Department’s anti-spoofing initiative, for instance, is that the federal government is essentially backstopping the business models of some of the most profitable companies in the world, owned by some of the richest people in the world, almost all of whom are probably white.

Similarly, when the Justice Department prosecutes accounting fraud at public companies, the parties most directly harmed by that fraud are (in theory at least) the company’s shareholders. Still, most stock in this country is held by the wealthy—with the top one percent possessing nearly half of it. The wealth in this country is also disproportionately held by white people, so stock holdings mirror (and in part drive) racial income inequality, as well. A 2018 study by the Roosevelt Institute summarized data showing that “[w]hile 60 percent of white households have retirement accounts and/or own some stock”—the people who most benefit from the prosecution of accounting fraud—“only 34 percent of black households and 30 percent of Latinx households do.”

Income tax evasion, by contrast, is a crime that affects everyone who lawfully contributes to the funding of the federal government—not just through income taxes, but through other, more regressive forms of taxation, such as the payroll tax. According to an analysis last year by the Brookings Institution, roughly “one out of every six dollars owed in federal taxes is not paid,” which “is plausibly about three-quarters the size of the entire annual federal budget deficit” and is likely driven by unpaid taxes among high earners. Perhaps not coincidentally, the IRS’s budget has been slashed in recent years, resulting in significant reductions in audits and referrals for criminal investigation. These cuts have given rise to an absurd status quo in the agency, ensuring that the poorest people in the country are just as likely to be audited as the wealthiest.

Consumer fraud, like tax evasion, marks a key arena of malfeasance where further enforcement work would benefit the public good. Indeed, a more significant commitment of criminal enforcement to consumer fraud would have even more obvious salutary effects than focusing on tax evasion, since the evidence suggests that Black people are likelier to file consumer fraud complaints. But consumer fraud is all too easy, in a political sense, for law enforcement officials to ignore—the monetary losses totted up through such scams are staggering in the aggregate, but they are diffuse and relatively small on an individual basis. The FTC’s data showed that the median loss from fraud reported to the agency last year was just $320.

That may seem like a small amount to many people—and particularly to the sorts of people (like me) who attend elite law schools and move on to become federal prosecutors. But according to data released last year by the Federal Reserve, nearly 40 percent of households in the country would have been incapable of managing an unexpected expense of $400 or more without going into debt or selling something. The Fed explained that racial and ethnic minorities of all educational backgrounds were “even less able to handle a financial setback.” Things are no doubt considerably worse as a result of the significant increase in unemployment this year, which has disproportionately affected Black and Latino workers.


The state of white-collar criminal enforcement is now in such disrepair that it will take years to recover, if it ever fully does. Even if Joe Biden wins in November, it will take a serious commitment of attention and resources on the part of new leadership at the Justice Department to try to reverse the damage.

The Biden campaign recently released more than 100 pages of recommendations from the “unity task forces” that were asked to find common ground between Biden’s supporters and those of Senator Bernie Sanders. The document contains many laudable and detailed proposals concerning criminal justice reform—including use-of-force guidelines, police oversight reforms, and other measures to address discrimination in the criminal justice system. But it does not contain anything specific to addressing white-collar crime, a sphere in which incarceration needs to go up, not down. There is, in fact, much that can and should be done—some of it relatively easy, and some of it requiring serious thought and long-term planning.

To begin with, internal Justice policies governing white-collar prosecutions need to be revised and in some cases entirely rolled back. Enforcement priorities need to be closely reevaluated in order to ensure that the department is using its scarce resources optimally—and, ideally, in a manner that protects the interests of broad swathes of our society rather than well-to-do individuals and companies that do not need the federal government to do even more for them.

Then there’s the question of staffing decisions—a critical element in white-collar prosecutions. Most political appointees will move on, but personnel decisions at the senior career level may also need to be revisited—without veering into political litmus tests—to ensure that hiring and promotions were justified by merit rather than political patronage or personal relationships and that political appointees have not “burrowed” into career positions. Funding needs to be boosted in order to support the hiring of more prosecutors and law enforcement personnel who can conduct financial investigations. We must look closely at whether white-collar investigators and prosecutors represent the diversity of the economic constituencies that they are—or should be—protecting. And the department should consider whether it can cost-effectively take functions in-house that it sometimes outsources—like data collection and analysis—so that American taxpayers are not paying needlessly high private sector rates.

We also need to take a good look at how best to maximize the jurisdictional reach of white-collar prosecutions. We need to improve our international law enforcement partnerships to increase the speed and efficacy of overseas investigative work, and we should think creatively about how we can incentivize countries that drag their feet when asked to provide information or access to people within their borders to do more. (One way to do this might be by boosting international aid contingent on countries that tend to slow-roll white-collar criminal inquiries showing measurable progress in these areas.)

Some searching discussion also needs to happen about how the stateside federal bureaucracy handles the rise of white-collar crime. We should ensure greater coordination between the Justice Department and consumer protection agencies like the FTC and the Consumer Finance Protection Bureau. And more broadly, we need to consider whether federal law enforcement institutions, in their current form, are still adequate for the international economic system as it exists today—byzantine, fractured, and opaque.

The Justice Department is by no means the only agency that will require an incoming Biden administration to sift through the rubble of the Trump era. But the public deserves a dramatic and long-term improvement in white-collar work at the Justice Department, and now is the time to start thinking hard about making that happen.