Crime that happens here often goes nationwide, FBI agent finds

Name the story, and there's almost always a Las Vegas connection. When it comes to crime, what happens here often reverberates nationwide, whether the subject is money laundering, human trafficking or even mortgage fraud.

Steve Martinez discovered this for himself in three years as Special Agent in Charge of the Las Vegas FBI office. This week he becomes assistant director in charge of the FBI's enormous Los Angeles division.

The Las Vegas office has just a few hundred agents and staffers, while the Los Angeles division is a staggering 8,000. But when it comes to activity under FBI purview, Las Vegas might rank as the Bureau's biggest little city.

Over the past 23 years, Martinez has held posts in Phoenix, Washington, El Paso, and Los Angeles. He also served as the FBI's first on-scene commander at the outset of Operation Iraqi Freedom. From drugs on the border to cybercrime on the Internet, Martinez has done it all.

But he might have seen the widest variety of action in Las Vegas.

"What work we don't generate here as an FBI office looking at the local community, other agencies bring to us," Martinez, 51, told me during a wide-ranging interview recently on KNPR's "State of Nevada."

"Because for the same reason that people like to come to Las Vegas, the bad guys like to come here, too. They think there's anonymity here. And so it's almost a tax on this office to be concerned with those external players as well."

A big part of his job was carving out working relationships with casino corporations and local law enforcement. But Martinez admits even he was surprised to find the FBI investigating widespread mortgage fraud.

"Certainly in the Las Vegas Valley and in other parts of Nevada, it's a huge, huge issue," he said. "For the FBI it was not a high priority when you look at other types of white-collar crime. ... But it was such a spike here and had such an impact on the overall decline in the economy because of the amount of the fraud, we recognized it here very, very early and were out front, I think, nationally in standing up. (We created) a task force first of all, so that we could address it, leveraging other resources, and also just getting to the point where we understood the scope of the problem here.

"There was a lot of work done in the FBI office here to look at ... financial suspicious activity reporting, analyze that and determine where we had some nodes of frauds. And we were really quite surprised ourselves at the level at which it was occurring here."

Whether the scandal results in more state regulation or just more federal prosecution is another matter.

"I think any time you have a situation where you have rapid growth, you're going to have opportunities for people to cut corners and for opportunities to commit fraud," Martinez said. "And I think Nevada has just provided that kind of opportunity. But if you look at the mortgage fraud problem across the country, I think it was really more to do with financial regulation across the board, not necessarily just this state, but the way the banking industry was or was not regulated.

"What really provided the opportunities here was just the rapid growth, the pace at which these transactions were turning over. I think, frankly, the financial institutions were not able to keep up with it. And so, detecting frauds when there was the potential to make an awful lot of money turning one transaction after another over was a real challenge."

He's on to bigger challenges in Los Angeles, but I don't doubt Martinez soon will find himself following a trail that leads back to Las Vegas.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.