Country Club Sopranos

American banks are on a massive crime spree. Obama and Romney hope you won’t notice.

Last fall, JP Morgan was nabbed again, this time for violating international sanctions and anti-terrorism laws. The Treasury Department cited the bank for engaging in illegal and "egregious" transactions with Iran and Cuba over a five-year period. But instead of being indicted for treason, JP Morgan paid an $88 million settlement to make the problem go away.

In February, the bank was caught gouging customers on overdraft fees. Some were charged hundreds of dollars for being just a few bucks overdrawn. Yet cash — a $110 million settlement, to be exact — again made the accusations disappear.

The crime spree didn't end until August, when JP Morgan paid another $100 million to settle another class-action suit. This time it was dinged for enticing customers to transfer balances at other banks to its own credit cards. In return, they would only have to pay 2 percent of the debt each month. But the bank quietly raised that minimum to 5 percent — the better to generate late fees.

Longtime prosecutor and Notre Dame law professor G. Robert Blakey: "The real theft was on Wall Street… All of the people who ran the scams have their big houses and their airplanes and they’re laughing."
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Longtime prosecutor and Notre Dame law professor G. Robert Blakey: "The real theft was on Wall Street… All of the people who ran the scams have their big houses and their airplanes and they’re laughing."
"Retired criminal" Sam Antar, who now trains the IRS and FBI how to bust corporate looters: “It’s almost like stealing a billion dollars with a pencil is not as bad. You have a lesser chance of going to jail than if you mug somebody on the streets of New York.”
Monika Golon
"Retired criminal" Sam Antar, who now trains the IRS and FBI how to bust corporate looters: “It’s almost like stealing a billion dollars with a pencil is not as bad. You have a lesser chance of going to jail than if you mug somebody on the streets of New York.”

In a span of 18 months, JP Morgan was involved in three major fraud cases — while moonlighting in money laundering and treason. But not a single executive faced criminal charges. And since the bank posted $25.9 billion in revenue during its most recent quarter, the collective settlements amounted to docking it less than two days' wages.

The bankers behaved like mafiosi. The feds handed out parking tickets.

"It's just about dollars," says Mitchell Crusto, a law professor at Loyola University in New Orleans. "If no one's serving time and no one's personally liable, I gotta do that all over again."

Lapdogs guarding the gate

Kid-glove treatment for wayward bankers first became fashionable under George W. Bush. In the Orwellian world of conservative economics, he viewed fraud and racketeering statutes as little more than burdensome regulation — at least when it came to the executive crowd. Crimes against consumers were just a lucrative new profit center.

Obama was supposed to change that; he was anti-business, after all, a modern-day Karl Marx with better access to a barber. But this reputation was born of the prattling of Republicans and their televised subsidiary, Fox News. The evidence screams otherwise.

To be fair, the president did push through the Dodd-Frank Act, which includes too-big-to-fail legislation and other measures that hinder banks' ability to set depth charges across the economy. Obama also created the Consumer Financial Protection Bureau, whose mission was to return America to the same safeguards that existed under Reagan and the first Bush.

But when he appointed Eric Holder attorney general, it was like making John Dillinger's lawyer head of the FBI bank-robbery unit.

Holder, a former Wall Street defense attorney, would ramp up big-dollar settlements. But criminal charges quietly sputtered to a trickle.

Justice Department spokeswoman Dena Iverson disagrees with this interpretation.

"We understand there is desire by the public to put company officials behind bars who may be with firms that have committed fraud against the government," she says in a written statement. "We follow the facts and the evidence, and whenever and wherever we uncover evidence of criminal wrongdoing, we will not hesitate to bring prosecutions."

Iverson offers a list of people who have been convicted for insider trading, Ponzi schemes and mortgage fraud. But they're mostly the smaller fish of finance, people who've never slept in the Lincoln bedroom or golfed with John Boehner. Conspicuously absent are racketeering indictments or repeat-offender charges against the likes of Bank of America or JP Morgan.

In a sense, Holder has granted the industry its own version of juvenile court. No matter how pervasive the crime, no matter how many thousands of victims, the major players can be assured of walking away with little more than a fine, released to the custody of their parents.

"When it comes to Wall Street, Eric Holder couldn't prosecute a ham sandwich that sold itself as kosher," says Sam Antar. "The Obama administration's record has been abysmal."

He should know. As the chief financial officer of a retail electronics chain in the 1980s, Antar pleaded guilty to multiple charges of fraud and conspiracy. He now describes himself as a "retired criminal" with a safer career: teaching FBI and IRS agents how to catch people just like him.

"It's kind of like Wall Street has a different set of rules than other industries," Antar says. "It's almost like stealing a billion dollars with a pencil is not as bad. You have a lesser chance of going to jail than if you mug somebody on the streets of New York."

And if Mitt Romney's elected, he'll make Bush and Obama look like disciples of Eliot Ness.

Romney has vowed to rescind even Obama's most modest gains, including too-big-to-fail laws. After all, he's never had an aversion to snuggling up with corruption.

Take the case of Drexel Burnham Lambert, the grandest criminal empire in modern Wall Street history. In the 1980s, its CEO Michael Milken was being investigated in a massive insider-trading and stock-manipulation case. But Romney, then head of Bain Capital, refused to stop doing business with Drexel, claiming its chieftain had yet to be convicted.

Before Drexel collapsed and Milken was sent to prison, Romney made $175 million with the company.

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8 comments
rbblum
rbblum

So, the significant difference between a crook and the too big to fail financial institutions is that a crook may have to pay restitution; whereas, the too big to fail institutions may have to pay a fine.

rhbroili
rhbroili

It sounds like the banks believe the fines are simple a "cost of doing business as usual". 

 

fallingman
fallingman

Yeah, Holder would love to do more prosecutions, but it's just sooooooo hard.

 

I call bulls#$t on that.

PENDINGLAWSUIT
PENDINGLAWSUIT

BARRY FAGAN DEFEATS WELLS FARGO ON JUDICIAL NOTICE

Posted By Neil Garfield LIVINGLIES ON OCTOBER 31,2012

 

http://livinglies.wordpress.com/2012/10/31/fagan-defeats-wells-fargo-on-judicial-notice/

 

Editor's Comment: Following up with the offensive strategy and the concept of attacking every weak point in the pretender lender's strategies, Fagan went after Wells Fargo on the seemingly innocuous motion for the Judge to take Judicial notice of several documents.

Besides the obvious fact that Judicial notice is narrowly construed to allow the FACT that a document was RECORDED (and not as proof of the matters asserted in such documents), Fagan took the offensive and essentially argued that Wells was trying to win a non-judicial foreclosure (in court, which is an oxymoron) using proof that could not be accepted in a judicial foreclosure.

His argument and his citations are right on point. The moral of this story is that if you keep the faith and realize that this entire foreclosure mess is just one part of the securitization scam, then you arrive at the inescapable conclusion that the homeowners should win, not just delay the foreclosures. Once you know you should win, it is easier to take the offensive and start thinking about the cases in a different way.

The question is not just "how do I protect my client" but also how do I win this case."

Read the documents below and you'll see how Fagan artfully slices up the Wells Motion for Judicial Notice and how the Court concluded correctly that Wells can't get away with violating the rules of evidence simply by slipping documents in through the back door.

It looks to me like we are turning the corner here. Deny and Discover has been getting a lot of traction. Stopa has surprised pretender lenders with summary judgment granted in favor of the borrowers and Fagan, is picking apart Wells Fargo. A fellow I know recently said to me "if you can make it bleed, you can kill it." He was referring to foreclosures.

Silverthumb
Silverthumb

Who says crime doesn't pay?  It pays pretty good for JP Morgan's Jamie "scumsack"  Dimon, who brings down $24 million per year plus stock options, perks, and any other tax dodge he can think of. These crooks, after getting bailed out with OUR tax money, continue to bend Americans over a barrel and give it to them good and hard.   Or how about John "the slime" Corzine, who stole over 1.6 billion of client money only to be addressed as "honorable" by congress.   I'd hate to be in these crooks' shoes when the Greater Depression hits.   Think Mussolini.

Anse
Anse

I will never understand why so many continue to grovel at the feet of these people. We speak of them as "job creators" as if daring to rein them in would put us all in abject destitution. But what do we risk with better regulation? Could they really pull up roots and take their bounty elsewhere? Honest question: could they conduct business like this anywhere else in the world? How is it that we have come to think we have no leverage here? And while there is no doubt that Democrats have much to answer for on this, the Republican Party is so completely devoid of any moral compass that they actually see no crime in any of this. Obama and Holder deserve much criticism. But Democrats, when pressed, know full well that all of this is so very, very wrong. Republican leadership will never put a stop to this.

H_e_x
H_e_x

 @Anse They gained so much living in this country but do everything they can to not give anything back. They threaten to leave, but there is no where else they could make their money like the U.S. When they threaten to leave, they are admitting that they are here to make money and nothing more. People really need to stop gargling on the balls of the rich in the hope that they spew out a few pennies their way.

 
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