The Incredible Con the Banksters Pulled on the FBI
By William K. Black, J.D., Ph.D.
OpEdNews Op Eds 8/18/2013 at 09:33:47
EXCERPT...
(M)any economists still seem not to understand that a combination of circumstances in the 1980s made it very easy to loot a financial institution with little risk of prosecution. Once this is clear, it becomes obvious that high-risk strategies that would pay off only in some states of the world were only for the timid. Why abuse the system to pursue a gamble that might pay off when you can exploit a sure thing with little risk of prosecution? (1993: 4-5).
In criminology jargon, the death of criminal referrals has created an intensely criminogenic environment which creates incentives so perverse that accounting control fraud can become epidemic.
The central puzzle is how the largest epidemics of elite white-collar crime in history, frauds that drove the ongoing financial crisis and made the Wall Street banksters wealthy beyond their most avaricious dreams, resulted in not a single conviction of those elite frauds. The FBI report allows us to figure out some of the key missing puzzle pieces that explain this tragic mystery.
This article (and the next) focus on the brilliant con that the mortgage lending industry was able to pull on the FBI because the banking regulatory agencies and the SEC failed to provide the FBI with the expertise and investigative findings of fraud essential for the FBI and the Department of Justice (DOJ) prosecutors to succeed in investigating and prosecuting the officers controlling complex frauds. Three key facts are essential for the public to understand the FBI's total dependence on criminal referrals from the banking regulatory agencies. First, "control frauds" cause greater financial losses than all other forms of property crime -- combined. "Accounting control frauds" must gut their underwriting process and internal controls in order to make massive amounts of bad loans. That is equivalent to hanging a sign on the front door inviting thieves to rob the bank with impunity.
SNIP...
So we return to the question this column addresses -- how could the DOJ make zero criminal prosecutions of the elite banksters that caused this crisis through the twin epidemics of accounting control fraud by lenders (appraisal fraud and fraudulent "liar's" loans)? The FBI Report shows (indirectly) that the answer is an exceptionally effective con run by the mortgage industry on the FBI. The con could have never succeeded had the banking regulators not ceased making criminal referrals and providing their expertise to the FBI and DOJ on accounting control fraud schemes. The OTS was supposed to regulate Countrywide, Washington Mutual (WaMu), and IndyMac -- three of the most notorious fraudulent lenders in the world. The OTS made zero criminal referrals in this crisis -- which was over 70 times worse than the S&L debacle in terms of losses and fraud.
CONTINUED...
http://www.opednews.com/articles/The-Incredible-Con-the-Ban-by-William-K-Black--130818-359.html
Gee. The rich get away with ripping off trillions. Is it any wonder the NSA goes after Assange, Manning, Snowden and those who oppose the "Money trumps peace" business-as-usual thing?
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