25 October 2010
Did you know that in the aftermath of the Savings and Loan (Thrifts) scandal there were more than a thousand felony convictions of financial elites?
The cost of the wrongdoing associated with the rip-off and closure of nearly 800 Thrifts cost taxpayers more than $160 billion. The current sub-prime/mortgage-backed security scandal is 40 times bigger according to Economics professor William Black.
That means the size of the crime is $6.4 trillion by my calculation.
Can you guess how many indictments there have been on financial elites who created this enormous mortgage crisis mess? Zero, none, nada, zip.
Yes, not one single prosecution or conviction
has been started of achieved.
There was real estate document fraud when the original Promissory Notes and loan documents were “lost.” The Promissory Notes were required to create tens of thousands of mortgage-backed securities (MBS). No “note,” no security. That is security fraud.
No security means the special IRS tax treatments for the MBS’s were fraudulently obtained. That is IRS tax fraud. Because there were no documents, the rating agencies fraudulently made up triple “A” ratings for the securities. When the whole mess blew up, big banks hired foreclosure mill law firms to create forged documents.
That phony paperwork was and is being used to wrongfully remove homeowners from their property. That is foreclosure fraud. It appears to me the entire mortgage/securitization industry is one giant criminal enterprise.
And yet, last Wednesday, Housing and Urban Development Secretary Shaun Donovan said,
What! Well, look a little harder Mr. HUD Secretary (see complete Reuters story with Donovan’s quote.)
Donovan did say the foreclosure fiasco is “shameful,” but that is not the same as a criminal prosecution now is it? Where is U.S. Attorney General Eric Holder in all of this? I guess he’s busy planning a lawsuit to stop California from making pot smoking a misdemeanor.
Holder is probably also very busy with
continuing legal actions against Arizona’s immigration law. I guess
trillions of dollars in mortgage and securities fraud is just not enough of
a legal priority for America!
Iowa AG, Tom Miller, is leading the investigation for the 50 states.
His focus, according to a recent Washington Post story, is “preventable foreclosures“,
Miller’s office also says,
When did State AG’s become public policy
negotiators for the banks? Where are the criminal prosecutions? This is a
sham and an outrage perpetrated by state governments. Who are they
protecting? I say it’s really the banks’ and investors’ income stream.
At the end of September on the Dylan Ratigan Show, he said,
Black is not just some angry academic.
Besides being a Professor of Economics at the University of Missouri KC, he is also a former bank regulator and an expert in crimes committed by CEO’s. He thinks Treasury Secretary Tim Geithner and Attorney General Eric Holder should be fired so real regulators can get to work on prosecutions of crime throughout the entire industry.
And get this, just last week, Black adamantly claimed that “major frauds continue,” at all the big banks.
Hear for yourself in the clip below:
William Black, a professor at the University of Missouri at Kansas City, talks about the U.S. mortgage crisis.
Black speaks with Lisa Murphy on Bloomberg Television's "Fast Forward."
(This is an excerpt of the full interview).
He also said in this segment (but wasn’t included in the clip) that,
That means trillions of dollars in MBS’s are worthless!
Foreclosuregate is a gargantuan financial mess, and federal and state regulators have not found a single crime in all of this to prosecute? Clearly, the U.S. government and both political parties are shielding the perpetrators.
Oh wait! The SEC did fine Angelo Mozilo, the former head of Countrywide Financial Corp., $67.5 million in penalties to settle civil fraud and insider-trading charges.
Mozilo ripped-off hundreds of millions of
dollars, and he pays a fine that amounts to a parking ticket for a man of
his wealth? Is that the same as a criminal prosecution? I don’t think so!!
(more on the
Mozilo story from The WSJ.)
According to the financial elites, these crimes are essential to keep the American economy running smoothly.