Truthout:
By Marisa Taylor
McClatchy Newspapers
Monday 23 July 2007
Prosecutor who built case against Virginia insurer was replaced.
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, would not 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 Virginia history, 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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