The FBI investigates matters relating to fraud, theft, or embezzlement occurring within or against the national and international financial community. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent upon the application or threat of physical force or violence. Such acts are committed by individuals and organizations to obtain personal or business advantage. The FBI focuses its financial crimes investigations on such criminal activities as corporate fraud, securities and commodities fraud, health care fraud, financial institution fraud, mortgage fraud, insurance fraud, mass marketing fraud, and money laundering." This report covers the financial crimes that occurred between October 1, 2006, and September 30, 2007. It begins with an overview of the FBI's Financial Crimes Section, then focuses on each of the previously listed subcategories of financial fraud.
XUJIA WANG, VICE PRESIDENT OF FINANCE - MORGAN STANLEY (NEW YORK): This investigation was initiated on the basis of regulatory reporting related to suspicious options trading activity in Genesis Healthcare Corporation (GHC) immediately preceding the acquisition of GHC by private equity firms. Through her employment as Vice President of Finance for Morgan Stanley, Xujia Wang obtained material non-public information on GHC and other acquisitions, which she and her husband, Ruopian Chen, used to execute illicit trades in an account held in the name of a family member. On September 5, 2007, Wang and Chen pleaded guilty to charges of securities fraud and conspiracy to commit securities fraud for their roles in this insider trading scheme that resulted in illicit trading profits in excess of $600,000. On December 4, 2007, Wang and Chen were each sentenced to 18 months imprisonment and required to forfeit $611,248.
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