Probe Into Fannie Mae, Freddie Mac Widens

WashPost ^ | 9-30-08 | Zachary Goldfarb

[STARWISE]

The government probe into Fannie Mae and Freddie Mac widened as the mortgage giants disclosed yesterday they are under investigation by the Department of Justice and the Securities and Exchange Commission.

The companies, which were seized by the government three weeks ago, said that the U.S. Attorney for the Southern District of New York and the SEC have opened investigations over accounting, disclosure and corporate governance matters relating to events dating to Jan. 1, 2007.

[STARWISE]

According to the SEC employee I spoke to today, there was a $400 Million penalty levied against the CORPORATION of Fannie Mae for accounting fraud in 2006 .. but NOT the individuals for the betrayal of their fiduciary duties and wholesale theft.

Even if there is a corporate setttlement, it's still critical that the investigation get to the heart of the matter: the criminal fraud committed by Gorelick, Raines, Mudd et al.

~~~~

PLEASE call the US Attorney's Office in NY to URGE that they include Jamie Gorelick, Franklin Raines and Daniel Mudd in their investigations.

Contact:

Michael J. Garcia United States Attorney - Southern District of New York

Criminal Division

1 St. Andrews Plaza New York City, NY 10007

Phone: (212)637-2200

Fax: (212)637-2390

~~~~

[dirtboy]

Talk about a RICO suit waiting to happen.

[Andy from Beaverton]

I wonder how much Freddie/Fannie employees gave to B-HO?

[Seattle Conservative]

I don’t understand why they’re only going back to 2007. IIRC there were things that should be investigated between 2003-2007 (and probably earlier).

[Dustbunny]

Hopefully this will be a truthful investigation. Unlike the 9/11 investigation.

Although I doubt it will be because those in the do nothing helpful Congress will probably be pulling strings and jerking chains to make sure their names are never mentioned.

[r9etb]

I expect that the MSM will soon begin a series of big stories tying these problems to the many former Fannie Mae/Freddie Mac executives who currently work for Obama's campaign.

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chortle .
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... snort .... .
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BWAHAHAHAHAHAHAHAHAAAAA!!!!! Sometimes I crack myself up....

[101voodoo]

It’s unclear whether they are investigating events TO (up until) 2007 or FROM 2007. My guess is it is up until 2007 since that’s when all the scandals took place.

[ninergold3]

LOL! Good one.

[bray]

Raines and Johnson should be jailed. Their books made Enron look saintly.

Pray for W, Gov Palin and Our Troops

[penelopesire]

He is a Bush appointee...maybe we have a chance here...but I doubt it. Tired of holding my breath on this kind of stuff. Will call though like you suggest.

http://en.wikipedia.org/wiki/Michael_J._Garcia

[Reaganesque]

That’s how far back it goes NOW. You’ve got to start somewhere. If this is a serious investigation, they will then expand the search if the evidence suggests they need to. Of course, the key phrase there is “serious investigation.” But, for now, they seem to be going about this in a deliberate, methodical fashion and that’s a good thing.

[AFreeBird]

What about Frank, Dodd and other corrupt pols who aided and abetted Fannie and Freddie?

[NVDave]

There’s probably a statute of limitations on the white-collar felony charges they could bring.

[workerbee]

I’m too cyncial to think this is going to amount to more than a little noise, but there’s always hope. I read this is the prosecutor who investigated Spitzer.

[STARWISE]

US Attorney’s Office - NY

email: usanys.crcomp@usdoj.gov

~~~

Useful contact numbers at the SEC:

http://www.sec.gov/contact/phones.htm

~~~~

Michael Garcia has had several successful terrorism prosecutions:

In 2001, he was involved in prosecuting four defendants accused of conspiring with Osama bin Laden and 17 others in the bombings of the United States Embassies in Kenya and Tanzania in 1998. The four defendants were convicted in May 2001.

In 1993, Mr. Garcia also took part in the successful prosecution of four defendants accused of involvement in the first terrorist attack on the World Trade Center.

http://www.nytimes.com/2005/04/11/nyregion/11senator.html

~~~~

LET THEM HEAR FROM US!

[Blood of Tyrants]

Why are they limiting it to Jan 1 of last year? The fraud has been going on for well over a decade. My well-educated guess is that some very powerful people would be caught up in the net if it were expanded. And ass we know, the powerful DO NOT have to answer to the law as we mere mortals do.

[Peter Horry]

This should be is an essential part of any remedy to this crisis. There should be criminal penalties, asset liquidation, and punitive damages applied as appropriate.

[STARWISE]

Absolutely .. they’re implicated. I don’t know that traitorous members of Congress can be prosecuted for their official acts.

But ... they can be included in the comprehensive and complete failure and financial evisceration of Fannie Mae verbally in the report, at least.

[TruthWillWin]

At least one of the guilty parties, Barney Frank, has no concern about doing jail time. Think about it......

[STARWISE]

[SweetCaroline]

*

[SweetCaroline]

*

[gussiefinknottle]

you forgot david gregory’s wife, beth wilkerson.

[AFreeBird]

Ah, so in other words: he'd gladly sign up to take one (or a thousand) for the team.

We're waiting Bwaney.....

[penelopesire]

Lots of info here to mine:

REPORT TO THE PRESIDENT
CORPORATE FRAUD TASK FORCE
2008

http://www.usdoj.gov/dag/cftf/corporate-fraud2008.pdf

Quite a few things on sub-prime stuff:

Here is one report:

Federal Home Loan Mortgage Corporation (Freddie Mac)
On September 27, 2007, the Commission filed a settled enforcement action charging Freddie Mac with securities fraud in connection with improper earnings management. The Commission’s action also charged former Freddie Mac executives David W. Glenn, its former president, COO, and vice-chairman of the board; Vaughn A. Clarke, its former CFO; Robert C. Dean, a former senior vice president; and Nazir
G. Dossani, a former senior vice president. The Commission alleged that Freddie Mac engaged in a scheme that deceived investors about its performance, profitability, and growth trends and that the company misreported its net income in 2000, 2001, and 2002. In its settlement with the Commission, Freddie Mac agreed to pay a $50 million penalty. Glenn, Clarke, Dossani, and Dean agreed to pay penalties of $250,000, $125,000, $75,000, and $65,000, respectively, in addition to disgorgement.

Another one Here:

Securities and Exchange Commission
American International Group, Inc.
On February 9, 2006, the Commission filed settled charges against American International Group, Inc. (AIG) for securities fraud, alleging that AIG misled investors about its financial results by entering into sham reinsurance transactions. The settlement required AIG to pay a penalty of $100 million and disgorge ill-gotten gains of $700 million.

Another one here:

MCA Financial Corp.
MCA Financial Corp., based in Southfield, Michigan, was a privately held mortgage company that made conventional and subprime loans to individual homebuyers in Michigan and several other states. MCA was also a mortgage and land contract broker and servicer. MCA defrauded both its investors, who purchased MCA’s bonds and mortgage-backed securities, and institutional lenders by misrepresenting its true financial condition in financial statements that were regularly filed with the SEC. As the result of paper transactions involving low-income housing in the City of Detroit between MCA and numerous off-book partnerships controlled by MCA’s top two executives, tens of millions of dollars in sham assets and revenues were booked. Seven former MCA executives, including its chairman and CEO, president and COO, CFO, and controller, were convicted in the Eastern District of Michigan of conspiracy, wire fraud, mail fraud, bank fraud, and filing false statements with the SEC. Their sentences, the last of which were imposed in 2006, ranged from 10 years’ imprisonment, for the former chairman, to 12 months of alternative confinement, for a senior vice president who cooperated. The defendants were also ordered to pay restitution, jointly and severally, to investors and lenders in the amount of $256 million.

BIG SECTION ON MORTGAGE FRAUD TOO.

[surrey]

I just had a conversation with the vp of our little town bank. She said they have to make examples of some of these crooks just like they did with Martha Stewart.
She’s a little frustrated that “all banks “ seem to be getting the blame from people. This bank is very conservative and doesn’t give out mortgages easily. She said you would be amazed at how many people come in looking for a mortgage that they’ll have a tough time paying. This bank won’t give it to them. The town is filled with waterfront McMansions and I’m sure many of these will be on the market.

[april15Bendovr]

Laurie Mylroe would be a good person to consult on this topic.

[penelopesire]

We need to be looking into this...THEY ARE BASED IN ILL.

U.S.
Attorney’s Office for the Northern District of Illinois
Mercury Finance Company
Mercury Finance Company was a NYSE-listed subprime lending company. As a result of an extensive accounting fraud scheme designed to inflate the company’s revenues and to understate its delinquencies and charge offs over several years, the market capitalization of the company decreased by nearly $2 billion in one trading day after the existence of the fraud was publicly announced. Commercial paper purchasers also eventually lost about $40 million and longer term lenders lost another $40 million. The former CFO admitted his role in the fraudulent scheme and cooperated with the investigation, but he died unexpectedly before charges were brought. John Brincat Sr., the former CEO and chairman of the board of directors of the company, pled guilty to wire fraud and conspiracy in connection with the scheme. On May 23, 2007, Brincat was sentenced to 10 years in prison. Previously, Bradley Vallem, the former treasurer of the company, pled guilty to engaging in the accounting fraud scheme, agreed to cooperate and received a
1.6
Corporate Fraud Task Force Member Contributions
20-month sentence. Lawrence Borowiak, the former accounting manager, pled guilty to trading Mercury Finance Company stock on inside information, agreed to cooperate, and received a sentence of 12 months in prison.

“AN ‘UNEXPECTED DEATH’ OF THE CFO”
???
Will see what I can find.

[STARWISE]

Great link .. thank you.

~~~~

Keep passing this on .. the idiot, crooked Rats
would pay a dollar to lie if the truth were free.

***Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis (2004)***

http://uk.youtube.com/watch?v=_MGT_cSi7Rs

[Eroteme]

That’s how far back it goes NOW. You’ve got to start somewhere. If this is a serious investigation, they will then expand the search if the evidence suggests they need to. Of course, the key phrase there is “serious investigation.” But, for now, they seem to be going about this in a deliberate, methodical fashion and that’s a good thing.

Exactly. They've got to start somewhere. In any criminal enterprise, especially one at this level, complexity, and sophistication, you've got to reverse engineer the operation...take it apart piece by piece working backwards in time.

I too see this investigation as a good thing. As they acquire the necessary pieces of evidence and flip the witnesses they've got the basis for more subpoenas, earlier dates, etc. Sorting the players and events in order of most-recent back to its genesis reveals patterns necessary to proving institutional fraud, especially the systemic built-in nature of the coverup and its origins at the highest levels. It's how good criminal cases are built.

[polymuser]

I don’t know that traitorous members of Congress can be prosecuted for their official acts.

Impeachment or censure.

[april15Bendovr]

Metaphorically speaking this old movie image shows well how successful so far the Democrats are at putting the blame on the Republicans.

Can anyone guess the movie?

[STARWISE]

Details - Borowiak

http://classaction.findlaw.com/cases/securities/sec/sec1/files/1999/lr16296.html

[a6intruder]

The Bridges at Toko Ri?

[verity]

Stalag 17.

[STARWISE]

Right ... seems rather unlikely right now ... ;(

[singfreedom]

It was obviously a conspiracy to defraud. Isn’t that what is required for a RICO suit—a criminal conspiracy?

[april15Bendovr]

Here is the Democrat

[singfreedom]

That’s when the actual damage was done. Why would they investigate SINCE 2007. That would be an expensive pointless exercise.

[april15Bendovr]

Verity was right

[STARWISE]

More recently, analysts and the press questioned how the companies calculated their capital -- a government-mandated financial cushion used to offset losses. For most of the year, the companies -- and their regulator -- said the companies had sufficient capital.

In the weeks leading up to the takeover, government examiners looking through Fannie Mae and Freddie Mac's books worried about what made up the capital the companies were claiming. For instance, they counted as part of their capital certain tax credits they were due.

But the tax credits could only be applied against profits.

Since the companies were experiencing big losses, the tax credits had little immediate value.

~~~~

What clever scam/con artists.... jeeze.

[maggief]

This video is no longer available due to a copyright claim by Warner Music Group

Burning Down The House: What Caused Our Economic Crisis?

A highly informative video that traced the cause of our current crisis that had
its roots planted 12 years ago.

http://www.youtube.com/watch?v=H5tZc8oH—o

//

June 26, 2008
Categories: Barack Obama
Bronfman, (Warner Music Group, CEO), Bernstein head Obama Jewish group

http://www.politico.com/blogs/bensmith/0608/Bronfman_Bernstein_head_Obama_Jewish_group.html

[singfreedom]

Absolutely. When you do a dictionary search for “malfeasance”, Frank, Dodd, Pelosi and Reid will be pictured there. All those in the “Black Caucus” will probably be pictured there, too. That's going to be one LONG entry!

[singfreedom]

He might not like those ugly orange jumpsuits to much though.

[penelopesire]

Thanks. Was just looking around some other links. Probably not much there of interest.

[STARWISE]

Whatta joke. Franklin Raines, Horatio Alger Association Member

http://au.youtube.com/watch?v=APdUYVDRT28

***

John Gibson explains who is responsible for the Fannie Mae and Freddie Mac collapse and who Fannie & Freddie have been supporting in Congress

http://au.youtube.com/watch?v=YGnZMGDG4k4&feature=related

***

Brit Hume - Brett Baier: McCain’s Early Recognition of Fannie/Freddie Crisis

http://au.youtube.com/watch?v=63siCHvuGFg&feature=related

***

Barney Frank - July 14, 2008

“they are well managed and not in economic trouble ...”

http://au.youtube.com/watch?v=Q6Yv7jT0TX0

[BIOCHEMKY]

“I don’t know that traitorous members of Congress can be prosecuted for their official acts.”

What seems possible to me is if the FACTS surrounding the “Manufactured Financial Crisis” purposely brought on by democrat operatives are exposed to the public, certain democrat Senators and Congressmen could be indicted on treason charges. I think this because what this connected group of individuals have done over a period of many years, deliberately and seriously undermining the nation’s financial foundation through the promotion of subprime mortgages, qualifies as having greatly endangered the national security of the United States. I hope the investigation into Fannie Mae/Freddie Mac/AIG/ACORN leads to indictments of all of the key players under the federal RICO statute with the penalties being those for treason.

[potlatch]

Thanks for the ping. TIDBITS of interest;

 

 

[rodguy911]

Great thread Star! We know who is to blame for the corruption there.

Problem is we are really late trying to solve things now after all the dirty work has been done, we need to demand they stop next time we catch them with hands,feet and lips inside the cookie jar.

[PhilDragoo]

Calling the Department of Justice. . . .

We tailed Mark Rudd's Maoists to the Nixon Counterinaugural January 19, 1969.

Walking beneath the windows of the DoJ, the shirt-sleeved lawyers were giving everybody the finger.