Abacus Indicted for Criminal Mortgage Fraud

 

While the name Abacus is famous as Goldman’s fraudulent CDO scheme – the poster child for the rampant fraud on Wall Street – another Abacus (a small bank) has just made news by being criminally indicted for mortgage fraud.

Bloomberg’s Anthony Lee Pacchia interviewed Bill Black on the meaning and ramifications, and sent me the following summary and clip:

Manhattan DA Cy Vance given us a rarity in filing *criminal* charges against Abacus Bank and 19 former employees for mortgage fraud. The papers say the bank originated liar loans, a common practice for most banks. But according to guest Professor William K. Black, don’t expect this case to lead to more prosecutions of large banks despite overwhelming evidence of rampant fraud amongst the big banks in mortgage origination. A couple of his points:

-state and federal authorities don’t have anywhere near the manpower or resources to actually prosecute big banks for fraud.

-Treasury Sec. Tim Geithner has actively discouraged prosecutors from going after big banks.

-the very idea of prosecuting Abacus for a crime while allowing it to remain open is completely nonsensical and is likely to provoke a run on the bank.


Of course, fraud caused the 1930s Depression and the current financial crisis, and there’s no recovery because the government made it official policy not to prosecute fraud (and see this, this, this, and this).

But government regulators have said that they’ll take on the small fish … and let the big-time criminals go.

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  • http://blogdredd.blogspot.com/ Dredd

    Sounds like election year window dressing.

  • gozounlimited

    The People Awaken to Financial Terrorism: Infowars Exclusive

    Prisonplanet.com
    June 8, 2012

    This is an overview in the Financial Terrorism conference held in the UK this past weekend. Speakers included Max Keiser, John Perkins, F William Engdahl, Ian Crane, Alessio Rastani and more. Stay tuned for more in depth videos from the conference.

    see video: http://www.prisonplanet.com/the-people-awaken-to-financial-terrorism-infowars-exclusive.html
    ***********
    Keiser Report: Planet Ponzi – E298

    June 8th, 2012

    (RussiaToday) – In this episode, Max Keiser and co-host, Stacy Herbert, discuss shamed, naive and unsustainable ponzis and the UK’s Metropolitan Police’s Total War on Economic Crime (or at least that committed by the bottom 99%). In the second half of the show Max talks to Mitch Feierstein, hedge fund manager and author of Planet Ponzi, about global ponzi schemes, asymmetric hedging and whether or not hedge funds do any ‘good.’ View this entry » http://dprogram.net/2012/06/08/keiser-report-planet-ponzi-e298/
    ***********
    Alabama Appeals Court Reverses Decision on Chain of Title Case, Ruling Hinges on Question of Bogus Allonges – 06/08/2012 – Yves Smith

    The fact that a higher court has finally decided to place the question of the legitimacy of suddenly-appearing allonges at the heart of a ruling is a welcome development.

    read more: http://www.nakedcapitalism.com/2012/06/alabama-appeals-court-reverses-decision-on-chain-of-title-case-ruling-hinges-on-question-of-bogus-allonges.html
    ***********
    Trustee Sees Customers Trampled at MF Global

    By JAMES B. STEWART
    Published in NY Times: June 8, 2012

    If the collapse of the commodities brokerage firm MF Global were a murder mystery, the revelation that $1.6 billion of customer money had disappeared would be the equivalent of finding the corpse.
    Who did it? And given that customer assets, by law, must be segregated from a firm’s assets and operations, how could it have happened?

    This week, MF Global’s liquidation trustee, James W. Giddens, went a long way toward solving the mystery in a 181-page account of MF Global’s decline and fall.

    read more: http://www.nytimes.com/2012/06/09/business/trustee-suggests-mf-global-misused-customers-money.html?_r=1&ref=business

 

 

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