BOISE, Idaho – Citing the sharp rise of check and Internet fraud, the state’s top regulator of credit unions and banks is moving ahead this month with what he describes as a tough “and novel” bill in the 2005 session of the Idaho Legislature to double criminal and civil penalties for financial crimes. Gavin Gee, director of the Idaho Department of Finance, said his proposed Financial Fraud Prevention Act would be broad enough with new enforcement powers to cover an array of financial crimes ranging from counterfeit cashier’s checks to phony loan applications and bogus CU Web sites. Existing financial crime law in Idaho “has never been specific enough,” to deal with modern-day fraud, said Gee, noting the bill is patterned after strict federal securities laws, particularly in the penalty area. “Virtually every day the department gets calls about some form of financial fraud whether it be stolen travelers’ checks or phony credit unions and whereas it used to be a nuisance, this is now a growing national problem with big dollars involved,” observed Gee. The Fraud Prevention Act, would give his department new enforcement tools to deal directly and more immediately with crimes aside from referring them to the state attorney general. Gee met two weeks ago with representatives of the Idaho Credit Union League, the Idaho Bankers Association and the Idaho Financial Services Association to get their input on his bill which already has wide support of the trade groups. A priority, said Val Brooks, regulatory and governmental affairs specialist for the Idaho CU League, has been to ensure that the Gee bill is not so overly broad that specific crimes are overlooked. Important, she said, is that the department has the authority to go after fraud perpetrators on their own. Apart from phony CUs and counterfeit cashier’s checks, other types of fraud that were discussed at the meeting included advance loan schemes, embezzlement, phishing, and check or credit card fraud. Gee said if enacted, his bill would also enable the department to work more closely with Canadian authorities since some of the fraudulent activities originate across the border. “Older adults have long been the target and most vulnerable when their IRA and retirement savings are targeted,” said Gee. Just like “what happens when a driver is caught speeding through construction zones, we are doubling the fines,” he explained. -

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