Posted on 09/20/2009 2:04:14 PM PDT by Lorianne
A Swiss bank that used its Cayman Islands’ branch to engage in what a US federal judge has branded “predatory lending practices” is being investigated by the US authorities.
Senior officials of Credit Suisse, Switzerland’s second largest bank, are facing claims that they pocketed millions of dollars by dishing out loans that were impossible to repay.
On Tuesday, 15 September, 31 of the bank’s officials received subpoenas demanding that they hand over internal documents that explain why they loaned $375 million to the now bankrupt Yellowstone Club in 2005.
The Yellowstone Club, founded by American tycoon Tim Blixseth, was once valued at more than US$1 billion.
It ran a service providing its uber-wealthy clientele - which included Microsoft billionaire Bill Gates and former American vice president Dan Quayle - with access to a string of luxurious properties across the globe.
The club’s portfolio featured an ocean front villa in Costa Rica, a slope-side chalet in Aspen, Colorado and a palatial nine-bedroom property on its own private island in the Turks and Caicos Islands.
However, the Yellowstone Club ran into severe financial difficulty last year after it struggled to keep up the repayments on a loan taken out with Credit Suisse against a sprawling resort it owned in Montana, US.
Credit Suisse has now been accused of loaning the money in an unorthodox and lucrative deal for the bank that federal bankruptcy judge Ralph B. Kirscher described in May this year as a case of “naked greed” that “shocks the conscience of this court.”
Mr Blixseth has now subpoenaed officials to try to uncover how and why the bank, which arranged the loan through its Cayman Island branch, developed the syndicated loan scheme.
Brady Dougan, the Chief Executive Officer of Credit Suisse First Boston, and Hans-Ulrich Doerig, Chairman of the Board of Directors, received the subpoenas along with past and current Executive Board officials and Credit Suisse’s Board.
“Bank officials have testified that Credit Suisse created a Cayman Islands ‘branch’ in 2005 to sell these loans.
“In reality, there was no phone and no staff in the bank’s phony branch.
“They used the Caymans to circumvent US banking laws and to issue inflated loans that Credit Suisse executives called a ‘gravy train’ in internal memos.“
“Credit Suisse pocketed tens of millions in fees in the process,” Mr Blixseth said.
As Judge Kirscher explained in a May Interim Order, Credit Suisse used the Cayman “branch” to skirt federal banking law and appraise the Yellowstone Club and other private resorts at grossly inflated values.
When Mr Blixseth owned the Yellowstone Club, he kept up-to-date on the Credit Suisse loan and never missed a payment.
However, he said that when his ex-wife Erda assumed ownership of the mountain resort in 2008, the Yellowstone Club quickly defaulted on the loan.
It became a common occurrence at other exclusive US resorts that also had taken the “Cayman Islands” loans, as Judge Kirscher wrote.
“Numerous entities that received Credit Suisse’s syndicated loan product have failed financially, including Tamarack Resort, Promontory, Lake Las Vegas, Turtle Bay and Ginn.”
“If the foregoing developments were anything like this case, they were doomed to failure once they received their loans from Credit Suisse,” Judge Kirscher wrote.
Judge Kirscher found that Credit Suisse’s greedy executives only earned fees if they sold the hyped loans.
He described them as “predatory lending practices”.
“The higher the loan amount, the fatter the fee to Credit Suisse. This program essentially puts the fox in charge of the hen house and was clearly self-serving for Credit Suisse.”
“The naked greed in this case combined with Credit Suisse’s complete disregard for the Debtors or any other person or entity who was subordinated to Credit Suisse’s first lien position, shocks the conscience of this Court.”
“While Credit Suisse’s new loan product resulted in enormous fees to Credit Suisse in 2005, it resulted in financial ruin for several residential resort communities.”
“Credit Suisse lined its pockets on the backs of the unsecured creditors,” Judge Kirscher ruled.
Mr Blixseth’s new subpoenas will unearth the internal documents Credit Suisse generated when devising their loans.
“In our ongoing discovery, we have had the opportunity to speak to many other Credit Suisse borrowers and their horror stories are shocking. The evidence indicates that this loan program was designed to fail – mostly through technical defaults – which in turn generated millions more in fees for Credit Suisse,” Mr Blixseth said.
CORRUPTION: Credit Suisse's Charter MUST BE REVOKED http://market-ticker.org/archives/1450-CORRUPTION-Credit-Suisses-Charter-MUST-BE-REVOKED.html
Now if we could get someone interested in pursuing Charlie Rangel, big time crook.
About that weird stuff coming from a guy named Dennis Montgomery.. posted all over the place...that crazy general McInerny who said the Malaysian airliner that went down had secretly landed in Pakistan has been pushing this tale too about The Hammer/Scorecard:
(BLIXSETH, DENNIS MONTGOMERY, NV) —— Brennan Plotted For Years To Get Trump, Starting with a Fly-By-Night Operation in Reno *source?* [BigLeauguePolitics]
image: https://stonecoldtruth.com/wp-content/uploads/2018/02/brenn9.jpg
A whistleblower case currently in federal court in Washington, D.C. stands to bring out incredible allegations of John Brennan and James Clapper’s moves against Trump, Supreme Court Chief Justice John Roberts, and the former presiding judge of the FISA court Reggie Walton.
Real estate mogul Timothy Blixseth admitted that he saw records from CIA and NSA whistleblower Dennis Montgomery proving that Clapper and Obama CIA director John Brennan oversaw repeated spying on the phone calls of President Donald Trump and millions of other private American citizens, including Supreme Court Justice John Roberts and FISA court judge Reggie Walton.
Fired former FBI director James Comey received evidence from the whistleblower’s lawyer but sat on it.
In an audiotaped interview — conducted before Trump ever ran for president — Blixseth spoke to former Maricopa County Sheriff Joe Arpaio and detective Mike Zullo. The audio was released in connection with a civil contempt case that the Department of Justice filed against Arpaio. The audio of this conversation appears to only be preserved in one location on the Internet, on a whistleblower Soundcloud page.
“This guy showed me 900 million phone calls. And I see myself in there. I see people I know. I see Donald Trump in there a zillion times, and Bloomberg is in there,” Blixseth said on the tape, referring to information that Montgomery allegedly showed him.
“He’s a very genius computer guy,” Blixseth said of Montgomery. “What they did is, they were actually working for the CIA. And they mask it as — I’m sure you’ll remember this — the contracts with the CIA, of which I had many copies, said that they were decoding Al-Jazeera television, said that there was broadcast embedded, remember that? Owned by Gore? Al Gore’s got part of it now. But it was all bullshit. That was bullshit. That was a front by the CIA. And this guy [Montgomery] worked for Brennan and Clapper. Those were the two guys running it,” Timothy Blixseth told Arpaio and Zullo on the tape.
“He started out in 2004 with another partner in Reno, Nevada, called eTreppid. They collected about $40 million from the CIA. Top security clearance. All kinds of letters…In 2006 they started a new company that [my ex-wife] owns, and they started doing the same business for the government. What it really turns out they were doing is they were hacking into all of America.
Big League Politics called the listed number for eTreppid Technologies, but we were told that Montgomery no longer works there. “That company closed down years ago, sir,” a representative said of eTreppid Technologies. When asked what the company is called now, the representative said, “I’m sorry, I can’t discuss any more with you.”
Blixseth claimed in his conversation with Zullo and Arpaio that Brennan and Clapper were running the operation.
“Everything they said they didn’t do, that Brennan said recently, mainly Clapper. It’s all bullshit. And I’ve got it right here,” Blixseth said.
On the explosive tapes, Blixseth walks Arpaio and Zullo through the details of the program on a computer screen. At one point, the three begin pulling up specific names of targeted individuals.
“You know who that guy is? That’s the head of the FISA court they hacked into, Reggie Walton,” Blixseth tells the investigators.
John Barlow worked a little with both Snowden and Julian Assuage
“On Tuesday, 15 September, 31 of the bank’s officials received subpoenas demanding that they hand over internal documents that explain why they loaned $375 million to the now bankrupt Yellowstone Club in 2005.”
I read some industry analysis about that project back around 2012. The appraisal process used to determine the collateral value was a ridiculous conflict of interest by the parties involved.
The entire project was a microcosm of the global meltdown in 2009.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.
