McClatchy: Justice Dept. drops massive fraud case

[babylonsister]

http://www.mcclatchydc.com/227/story/18223.html

Justice Dept. drops massive fraud case
By Marisa Taylor | McClatchy Newspapers


WASHINGTON — Two years into a fraud investigation, veteran federal prosecutor David Maguire told colleagues he'd uncovered one of the biggest cases of his career.

Maguire described crimes "far worse" than those of Arthur Andersen, the accounting giant that collapsed in the wake of the Enron scandal. Among those in his sights: executives from a subsidiary of Berkshire Hathaway, the investment empire overseen by billionaire Warren Buffett.

In May 2006, he felt strongly enough about his case that he prepared a draft indictment accusing executives from a Virginia insurer, Reciprocal of America, of concocting a series of secret deals to hide its losses from regulators. Although he didn't name anyone from Berkshire Hathaway's subsidiary, he described the company as a participant in the scheme.

But Maguire never brought those charges.

Months after preparing the draft, he was removed as the lead prosecutor on the case and reassigned.

His replacement, a prosecutor who hadn't been involved in the case until then, soon announced that the Berkshire Hathaway subsidiary, General Reinsurance, wouldn't be indicted. By April of this year, the entire investigation, which the Justice Department once hailed as one of the largest insurance-fraud cases in the history of Virginia, had fizzled.

Former employees and policyholders of the Richmond-based insurer were astounded. Why had the Justice Department spent upward of $2 million to investigate the case only to decline to prosecute? Maguire and his team of investigators had secured two related guilty pleas, interviewed dozens of witnesses and gathered 7,000 boxes of documents.

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[Ian David]

1. Loyal Bushies hard at work! n/t

[babylonsister]

2. Yep. This sounds oh-so-familiar! nt

[Unreconstructed Lib]

3. self-delete

[Unreconstructed Lib]

4. A friend just emailed this story to me, this morning.

McClatchy has been an amazing news service, lately. And I think that this investigation threatened to expose too many people in power--Ds and Rs, alike. Hochberg frankly admitted as much in his correspondence to Maguire, when he said, "Indicting the company would have enormous collateral consequences."

[babylonsister]

7. Even more or a reason to get to the bottom of it, and find out why

this was dropped so suddenly, without explanation.

[City Lights]

5. Gee, what a surprise.

Not.

[kansasblue]

McClatchy Newspapers. I like them ! more...

The McClatchy Company NYSE: MNI is an American publishing company based in Sacramento, California, that operates a number of newspapers and websites.

The company originated in The Sacramento Bee, which was first published on February 3, 1857, after the California Gold Rush. James McClatchy took over as editor of the Bee within a week. Having purchased Knight Ridder, the United States' second-largest newspaper company (see below) (Gannett Company is the largest), McClatchy operates 32 daily newspapers in 29 markets, with a total circulation of 3.3 million. <1> In addition, McClatchy operates a number of community papers that are printed with less frequency. The Minneapolis-St. Paul's Star Tribune, acquired in 1998 and sold again in 2006, had the highest circulation of all McClatchy newspapers.


http://en.wikipedia.org/wiki/McClatchy_Newspapers

[babylonsister]

8. And Knight-Ridder was one of the only agencies questioning the

run-up to this illegal occupation, per one of Bill Moyers' programs.

[spanone]

6. bu$h* = facism at it's finest

[OzarkDem]

9. Impeach Gonzo

It will be the only way to get to the bottom of these investigations!

[superkia]

10. Just simply amazing whats going on?