Country Club Sopranos

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

Former Bain executive Marc Wolpow best expresses the nominee's business principles: "Mitt, I think, spent his life balanced between fear and greed," he told the Boston Globe.

Bank of America, the nation's largest crime family

So bad has the leniency become that the feds are allowing bankers to keep much of what they steal. Ask Morgan Stanley.

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 August, it settled with the Justice Department over its role in fixing New York City's electricity rates. The bank played middleman in a deal between two energy providers, KeySpan and Astoria Generating, which then colluded to withhold electricity from the market, artificially driving up prices and costing consumers an estimated $300 million.

Morgan Stanley was paid $21 million for arranging the scheme. But the ever-generous Holder let the bank settle for $4.8 million.

It marked a stunning new low in federal prosecutions, akin to forcing a bank robber to return just $2,500 after stealing $10,000. With no jail time, of course.

Morgan Stanley offers little defense for its actions. "We will decline comment," says spokeswoman Mary Claire Delaney. But New York state senator Michael Gianaris will happily fill that silence.

"It's a good business deal for Morgan Stanley," he says. "They could break the law and get away with almost $17 million in profits for it, so why not do it again? If they get caught — and that's a big if — they still get 70 percent of the profits."

Peter Vallone Jr., a Queens councilman and former prosecutor, has never seen such tender handling of criminals. "It didn't deter a company this big, because it sort of amounts to their lunch budget," he says. "And most of all, it didn't return the money to the people it was stolen from. I was a prosecutor for six years, and I've never seen someone being fined less than they made."

Unfortunately, it's been happening for years.

Take the widespread scheme of reordering debit-card purchases to push customers into overdrafts. When it began, Bush's attorneys general, John Ashcroft and Alberto Gonzales, refused to prosecute. Private lawyers stepped into the breach with class-action suits.

California attorney Barry Himmelstein was among them. He noticed how bankers had become so entitled, they began to complain that getting caught chopped into their profit margins.

"We got that argument from Wells Fargo," he says. "It's a ridiculous argument. The fact that you can't make millions of dollars by screwing your customers is not an excuse to keep screwing them."

But even in class-action cases, the banks were getting off light. Himmelstein objected to one settlement involving Bank of America, which was also involved in the overdraft scam. By his calculations, the Charlotte company had ripped off its customers to the tune of $4.5 billion.

Yet the settlement allowed Bank of America to repay just 10 percent of its ill-gotten gains. The average victim was eligible for a $27 refund — less than the cost of a single overdraft.

Four years ago, American taxpayers kept Bank of America afloat with a $45 billion bailout. It repaid them by becoming a veritable crime family. Let's return to the highlight reel:

• Last year, BofA paid a $20 million settlement for illegally foreclosing on soldiers' homes over a three-year period. (Bank spokesman Larry Grayson declined comment for this story.)

• But it wasn't until this summer that the bank achieved frequent-guest status in American courtrooms. In June, it was fined for overbilling 95,000 customers over an eight-year period. Total revenue: $32 million. Total fine: $2.8 million.

• A month later, it paid $20 million more to settle a class-action suit. This time it was caught deceiving customers — or simply enrolling them without their knowledge — in worthless credit-card protection programs.

• In August, BofA paid another $738 million in a price-fixing case with Visa and MasterCard. It was accused of conspiring to keep merchant credit-card fees artificially high.

• The bank returned to court again in September, this time paying $2.4 billion for deceiving investors over its purchase of Merrill Lynch.

In less than two years, Bank of America had chalked up six major fraud cases. But there was no talk of three strikes. No indictments for racketeering. Not one executive charged with a crime.

Triage for cowards

The time to break balls was four years ago, believes Ed Mierzwinski of the U.S. Public Interest Research Group, a nationwide federation of consumer advocates. The banking industry was on the verge of collapse. American taxpayers showed up with a $125 billion life preserver.

Yet government officials were so worried about imminent carnage, they forgot to ask a simple favor in return: You have to stop ripping us off.

"We could have brought them to heel," says Mierzwinski. "The bailout was done so fast that they didn't put in clauses for better behavior."

Bankers, quite naturally, kept doing what they'd always done. This presented one of those only-in-government ironies: While the taxpayers had plenty of money to bail them out, we found our pockets empty when it came time to throw them in prison.

Mierzwinski empathizes with the Justice Department. Banks can field armies of lawyers, who are more than happy to stall and obfuscate as long as the meter's ticking. The feds cannot, so they retreat to triage, agreeing to settlements that present a mirage of victory.

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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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