When a California company agreed to pay more than $1 million to resolve a civil lawsuit in Connecticut over protective armor, it was for a case that did not originate on David Fein”™s brief watch at U.S. attorney for the state of Connecticut.
With Fein”™s experience in corporate defense and white-collar crime, however, it is anyone”™s guess the degree to which he will train his sights on Connecticut companies and executives in the wake of ongoing federal scrutiny of the financial sector.
A Greenwich resident, Fein was sworn in last month as U.S. attorney for the district of Connecticut, replacing acting U.S. attorney Nora Dannehy and becoming the 50th person to hold the position in Connecticut history. Dannehy resumed her role as deputy U.S. attorney.
Previously Fein was co-chairman of the white-collar defense practice at the law firm of Wiggin & Dana, representing clients in state and federal investigations, while teaching a class at Yale Law School on federal criminal investigations.
Long before Fein”™s arrival, the U.S. attorney”™s office in Connecticut has had multiple broad-based prosecutorial efforts under way related to business crime, including for financial schemes, Internet scams and mortgage fraud.
The tri-state area white-collar prosecutions that have grabbed national headlines the past few years, however, have mostly originated from the office of Preet Bharara, the U.S. attorney for the southern district of New York.
Both Fein and Bharara won notice early in their careers as assistant U.S. attorneys in New York.
Whereas Bharara made his reputation fighting organized crime and later investigating the firing of seven U.S. attorneys in 2006, Fein has focused on white-collar crime since joining Wiggin & Dana.
As might be expected, mortgage fraud received the greatest increase of attention from the FBI in 2008, the most recent year for which the agency has published white-collar crime statistics, with mortgage fraud cases pending increasing by roughly a third from the year before to nearly 1,650 cases total.
Even with the economic crisis and the discovery of Bernie Madoff”™s pyramid scheme that ratcheted up probes of similar crimes by financial planners, federal cases involving fraud by financial brokers, dealers and advisors actually declined slightly.
A Connecticut case was among the most significant, however: Samuel Israel III”™s Bayou hedge fund that furnished investors with statements of phony returns. Israel went on the lam while leaving clues suggesting he had committed suicide by jumping off a Hudson River bridge, but was apprehended weeks later at a Massachusetts campground.
Fein was sworn into office May 10; his office since then has presided over one sentencing of a financial scam, after Judge Ellen Bree Burns sentenced Stamford resident Francesco Rusciano, 28, to one year in prison for defrauding investors in the Ponta Negra hedge funds Rusciano ran between 2007 and 2009. In pleading guilty, Rusciano admitted that he defrauded investors by exaggerating his background, experience and performance as a currency trader with his prior employer; and by overstating the amount of funds he had under management in Ponta Negra.
The same day, a judge approved a settlement between Fein”™s office and Costa Mesa, Calif.-based Ceradyne Inc., which produced ballistic panels to protect the cockpits of Black Hawk helicopters, but did not test them to ensure they met government requirements, according to federal prosecutors. There have been no known injuries resulting from the untested plates.
In March 2009, Stratford-based Sikorsky Aircraft Corp. paid a $2.9 million civil settlement to resolve allegations that it violated the False Claims Act in connection with Ceradyne”™s failure to test the plates.
