Feb.18, 2010, Source: Reuters

Manhattan District Attorney Cyrus Vance has created a Major Economic Crimes Bureau as he and other high-profile investigators redouble their efforts to fight financial fraud.

Vance, who replaced Robert Morgenthau as district attorney on Jan. 1, named senior U.S. Justice Department official Richard Weber to lead the new bureau. Weber will also be deputy chief of the district attorney's investigation division.

The economic crimes bureau combines the Frauds Bureau, which was created in 1938 by then-DA and eventual U.S. presidential candidate Thomas E. Dewey, and lawyers from a bureau known as Investigation Division Central, or IDC. It will employ about 60 investigators, including 30 to 35 lawyers.

"There is a greater need than ever for offices like ours to be vigilant and competent in prosecuting complex fraud cases," Vance said in an interview.

He said the new bureau will focus on matters, including securities and mortgage fraud, money laundering and financing involving suspected terrorists, and "devote new resources to go after identity theft and cyber crime more broadly."

As to how Wall Street itself should regard the change, he said: "I think Wall Street wants to eliminate economic crime as much as the citizens do."

The IDC was the bureau that in 2005 won convictions of former Tyco International Ltd (TYC.N) Chief Executive Dennis Kozlowski and Chief Financial Officer Mark Swartz for looting the company and defrauding investors.

Weber since 2005 had been chief of the Justice Department's asset forfeiture and money laundering section, where he oversaw several major U.S. and foreign prosecutions that resulted in more than $1 billion of asset forfeitures.

Among his cases were the federal portions of agreements announced in 2009 by the Justice Department and Morgenthau with Credit Suisse Group AG (CSGN.VX) and Lloyds TSB Bank over alleged improper wire transfers and other violations involving Iranian banks and other entities. Credit Suisse and Lloyds agreed to pay a respective $536 million and $350 million of penalties.

Vance's announcement comes as U.S. Securities and Exchange Commission enforcement chief Robert Khuzami overhauls his division following criticism of his predecessors.

U.S. Attorney Preet Bharara in New York and state regulators such as New York Attorney General Andrew Cuomo are also campaigning aggressively against financial fraud.

"It's an opportunity for partnership and I intend to do a lot of partnering," Vance said.

"In overlapping jurisdictions, conflicts can always occur," he went on. "But as a philosophical matter, I ran for this job believing that what voters want is for law enforcement professionals to work for the best interests of the public. Sometimes that means I am going to defer to federal prosecutors and I believe there are times that they will defer to our office. There's plenty of work to go around."

Vance's father, also named Cyrus Vance, was U.S. secretary of state under President Jimmy Carter.