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While our country is awash in one banking scandal after another, has anyone seen any real punishment for those involved? Sure we see the street level fraudsters like the mortgage fraud pros we've talked about over the years get arrested and locked up, yet despite all the press releases and hoopla over these cases, we've yet to see a single high level banker or Wall Street insider get locked up over the trillions of dollars worth of fraud that's occurred over the last decade. Case in point, after receiving billions of dollars of federal bailout money, the folks over at JP Morgan Chase lose upwards of 5 billion dollars in some wacky derivative trades, the money is gone just like that, POOF! Who's left to answer for it? No one, all we get is condescending remarks from the banks CEO Jamie Dimon. Or worse, how about the Libor scandal from London that's cost borrowers untold billions of dollars? What kind of punishment have we seen for those involved? Almost nothing.
Over the last couple of years we've heard of a banking scandal in Iran where the folks involved stole a couple of billion dollars from the government banks, check out the consequences for those involved...
(Reuters) - An Iranian court has sentenced four people to death for their roles in a billion-dollar banking fraud scandal that forced bank executives out of their jobs and tainted the government of President Mahmoud Ahmadinejad, state media reported on Monday.
The embezzlement case, discovered in September 2011, revolved around forged documents allegedly used by the directors of an Iranian investment company to secure loans totaling $2.6 billion to buy state-owned enterprises.
Thirty-nine people were tried for their involvement in the fraud.
"We are typing their sentences now and according to the sentence that was issued, four of the accused in this case were sentenced to death," judiciary spokesman Gholam-Hossein Mohseni-Ejei told the IRNA state news agency.
He did not name the individuals sentenced to death.
Two others were sentenced to life imprisonment and others received sentences ranging from 25 years and down, Mohseni-Ejei was quoted as saying.
DAMN! That's the way you deal with these MF's! Send them to jail for life or hang them! How's that for a deterrent for the next financial fraudster who thinks he can steal other peoples money? You think the prospect of being hung would wipe the smile off of JP Morgan Chase's CEO Jamie Dimon?
I think so! It's a shame that we have to look to a backwards third world country to see what the appropriate punishment is for the bankers whose shell games have brought our economy to it's knees. The sad part is that I honestly believe that until we impose harsher punishments for these crooks, nothings going to change...
I couldn't believe what I was reading this morning, after all the years of maintaining that the real criminals in the mortgage and real estate meltdown was the banks, we finally have some validation to our claims. Today we've learned that the banks at the core of the mortgage meltdown are willing to pay $20 billion dollars or more to win releases of liability from future claims that could arise from their lending practices! From the Bloomberg article...
A push by U.S. banks to win broad liability releases has become one of the main obstacles in talks to resolve a nationwide probe of mortgage-servicing and foreclosure practices, two people briefed on the matter said.
The mortgage servicers want protection from additional state and federal claims over their mortgage practices as part of reaching a settlement that may exceed $20 billion, according to the people, who declined to be named because the talks are private. The banks are seeking releases that go beyond servicing of mortgages to include lending and securitization of loans, one of the people said.
Of course they want to settle, $20 billion is chump change compared to what their potential exposure could be. But not so fast...
That effort has encountered resistance from at least two states. Delaware Attorney General Beau Biden and New York Attorney General Eric Schneiderman, who are investigating the bundling of mortgage loans into securities, don’t want their probes blocked by a broad settlement of liability.
Biden said he has “strong reservations” about a deal that provides releases related to practices such as securitization and lending, because servicing is the focus of the nationwide settlement talks.
“We have an investigation going on. It would hinder our ability to do that, so that’s why I have real reservations,” Biden said in an interview.
“Attorney General Schneiderman remains concerned by any settlement agreement that would preclude state attorneys general from conducting comprehensive investigations of the mortgage crisis,” Danny Kanner, a spokesman for the attorney general, said in an e-mailed statement.
Biden said it would be “imprudent” to relinquish claims in areas that haven’t been fully investigated.
“I hesitate to release those claims and those potential liabilities mostly because we’re still in the midst of investigating many of the other related issues,” he said.
Could this be real or simply some state attorney generals that are raising objections simply for political gain? Here's the best part, a quote from the CEO of JPMorgan Chase, Jamie Dimon...
“I would do anything to get it done today,” Dimon said July 14 about a settlement, according to a transcript of the company’s second-quarter earnings call.
NO SHIT? He'd do anything to get this settlement done today? How often do you hear people that are this eager to give away TWENTY BILLION DOLLARS??!! Remember, by settling the banks will be absolved of all civil and criminal liability, so of course they're eager to settle.
Now comes the best part, California Attorney General Kamala Harris has created a mortgage fraud task force that's going after the LENDERS who were at the epicenter of the mortgage/real estate meltdown! Better late then never! From the L.A. Times...
California Atty. Gen. Kamala Harris, saying that years of unscrupulous lending still haunts the state, is creating a 25-person task force to target mortgage fraud of any size — from small operations that preyed on troubled borrowers to corporations that sold risky loans as safe investments.
The team of 17 lawyers and eight special agents from the state Department of Justice will pursue three major areas, Harris said in an interview:
•Corporate fraud, including instances in which bundled mortgages were sold as securities to the state or its pension funds under false pretenses. Harris said her office plans to prosecute some cases under California's False Claims Act, which she described as "one of those very powerful tools that California uniquely has … to pursue, in essence, what are false claims that are submitted to the state."
•Scams, including instances in which consultants, lawyers and others took fees from people in foreclosure, saying they would help the homeowners get loan modifications or other remedies, but delivered nothing.
•Fraudulent lending practices, including deceptive marketing, failure to fully disclose loan terms and qualifying people for loans who couldn't afford the terms.
Harris said the mortgage fraud that ultimately led to the housing crash continues to be a drag on the state, causing huge losses in jobs, property values and state revenues.
"We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state," Harris said, referring to the decline in homeowner equity. "There is a direct connection" between mortgage fraud "and the issue that we are challenged with in terms of our state budget crisis."
Creation of the state's Mortgage Fraud Strike Force, which Harris will announce at a news conference Monday in Los Angeles with Mayor Antonio Villaraigosa, comes as other states turn up the heat on the lending industry.
Harris said that although successful prosecutions of major players in the mortgage meltdown have been difficult, the severity of the crisis called for a tough-minded approach to mortgage fraud, one that could target executives of major financial institutions.
"If the evidence leads us there, no case will be too big or too small to pursue," Harris said. "There remain millions of people affected by the mortgage crisis."
Fantastic. I wonder though, why hasn't the Miami Dade State Attorneys Office set up a similar task force? Why is it that the SAO down here refuses to go after the lenders? It's been four years since the task force was created and they're still stuck on prosecuting small time fraudsters, why not go after the big guys, the people that actually fueled the mortgage meltdown? The task force is no longer made up of inept and incapable prosecutors like Bill Kostrzewski, the men and women working their now are experienced and highly capable, so why not put together a case targeting the lenders who caused this mess?
Even if the banking industry ponies up the $20 billion and gets away from any liability for playing an indispensable role in the mortgage/real estate meltdown, they'd still be acknowledging some sort of responsibility in the crisis that ultimately brought our economy to it's knees. That at least in my opinion is huge, suddenly the defendants in cases like the Plantation Cops mortgage fraud case who claimed that the banks were the villains don't seem so far off base.
