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Scott Cohn: White-Collar Crime

Thursday, 1 Dec 2011 | 2:36 PM ET

Here's how I see perp walks in 2012.

1. CEOs stay handcuff-free.

Sorry, Occupy Wall Street. Don't expect a parade of CEO perp walks. The conduct that gave rise to the financial crisis was so widespread — and maybe just barely legal enough — that prosecutors still haven't been able to get the lower level guilty pleas they need to work their way to the top. But we will see some arrests in 2012 because of No. 2, below.

2. Insider trading remains front and center.

Raj Rajaratnam
cnbc.com
Raj Rajaratnam

The conviction of Raj Rajaratnam legitimized the useof wiretaps to ferret out insider trading. Now that they know it works, prosecutors will unleash more juicy tapes of other trader types in 2012.

3. Ponzi schemes will persist.

FBI Ponzi cases are already up 150 percent since Madoff. Watch for cases involving foreign currency scams — especially popular nowadays. The Madoff case isn't over yet either, and accused Ponzi schemer Allen Stanford is still waiting to go on trial.

4. Focus on health care fraud.

With healthcare in focus this election year, watch for growing attention by law enforcement to fraud, which could account for at least 10 percent of the cost of Medicare and Medicaid.

5. Politically charged probes into corporate failures.

The bankrupt solar energy firm Solyndra, which received a half-billion dollar federal loan guaranteeunder the Obama stimulus, is already a political hot potato and the subject of an FBI investigation. Proving crimes will be tough, and partisans will be furious when the feds come up empty. But executives at bankrupt MF Global — including former New Jersey Governor Jon Corzine — should be sweating bullets as authorities search for billions in missing or misappropriated customer funds.

Scorecard for 2011





My 2011 GPA: B-

1. "Expert network" becomes a houshold phrase.

Grade: Incomplete

Not in your house? Yeah, not mine either. Prosecutors said some at the research firms were offering illegal inside information. There were some important convictions in 2011, like Winifred Jiau and James Fleishman. But they're not household names, either, and the investigation is ongoing.

2. Growing backlash to war on corporate crime.

Grade: C

I correctly predicted this, but didn't predict the equal and opposite reaction from those calling for executives in handcuffs.

3. Judgment time for Madoff family members.

Grade: B

Few could have imagined that less than two weeks after I predicted growing heat for the Madoff family, Mark Madoff would tragically take his own life on the second anniversary of his father's arrest. The cloud of suspicion was too much to bear, and it still has not lifted from other family members, all of whom deny they knew a thing.

4. The financial crisis becomes a distant memory.

I was wrong about this. The longer we go without indictments, the more the memory sears.

Grade: C

5. A new sheriff in Albany starts to make his mark.

Grade: A

Newly-minted New York Attorney General Eric Schneiderman makes his mark. He became a hero objecting to a $20-million mortgage settlement with big banks. He's still not a household name, but his prospects may be better than those "expert networks."

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