Adam Levitin: Hmmmm....

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Adam Levitin: Hmmmm….

Adam Levitin: Hmmmm….

Credit Slips-

How is one to reconcile the civil fraud allegations in the US’s suit against Countrywide for defrauding the GSEs with the Department of Justice dropping its criminal investigation of Angelo Mozillo in 2011?  If the DOJ thinks that they’ve got Countrywide on civil fraud, I would think that should give them basically all they need to get Mozillo (and a whole bunch of other Countrywide folks) on wire fraud or mail fraud.  Mozillo, recall, settled with the SEC, but not, as far as I know with the Dept. of Justice or, for that matter, with any state Attorney General.  Just sayin’.   

The answer, I first thought, might relate to statutes of limitations.  Maybe it’s too late for the Feds to go after Mozillo.  Mail and wire fraud statutes of limitations are five years.  But they are extended to 10 years under FIRREA for mail and wire frauds “ affecting a federally insured financial institution”. That brings us back to the suit against BoA/CW:  the DOJ is making an interesting argument for deploying FIRREA.  Countrywide is alleged to have defrauded the GSEs. That alone doesn’t trigger FIRREA’s extension of the statute of limitations.  So the DOJ is arguing that the fraud affected federally insured financial institutions that invested in GSE stock because they were harmed when the GSE’s share price fell.

[CREDIT SLIPS]

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2 Responses to “Adam Levitin: Hmmmm….”

  1. Sarah says:

    “We still know far, far, far, too little about what was going on in the GSEs during the bubble” – Adam Levitin

  2. Yes, let’s give the CEO of Pennymac a little ringy dingy… Mr. Stanford Kurland. He has essentially brought Countrywide back from the dead, along with a whole cadre of executives that cooked up the whole hairball of COUNTRYWIDE.

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