VIA: HuffPolitics

Senator Carl Levin (D-MI) and former Goldman Sachs Mortgages Department head Daniel Sparks, Senate Governmental Affairs Subcommittee on Investigations hearing, April 27, 2010

Dylan Ratigan with special guest New York Times’ Louise Story, discussing the 600+ page report uncovering Goldman Sachs scheme to defraud investors. According to Bloomberg, The U.S. Justice Department and regulators will have to determine whether employees and executives of Goldman Sachs Group Inc. violated any laws when they traded securities tied to the housing market and testified to Congress about the transactions, Senator Carl Levin said.

United States Senate
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
Committee on Homeland Security and Governmental Affairs
Carl Levin, Chairman
Tom Coburn, Ranking Minority Member

WALL STREET AND
THE FINANCIAL CRISIS:

Anatomy of a Financial Collapse

~

MAJORITY AND MINORITY
STAFF REPORT

PERMANENT SUBCOMMITTEE
ON INVESTIGATIONS

UNITED STATES SENATE

April 13, 2011

In the fall of 2008, America suffered a devastating economic collapse. Once valuable securities lost most or all of their value, debt markets froze, stock markets plunged, and storied financial firms went under. Millions of Americans lost their jobs; millions of families lost their homes; and good businesses shut down. These events cast the United States into an economic recession so deep that the country has yet to fully recover.

This Report is the product of a two-year, bipartisan investigation by the U.S. Senate Permanent Subcommittee on Investigations into the origins of the 2008 financial crisis. The goals of this investigation were to construct a public record of the facts in order to deepen the understanding of what happened; identify some of the root causes of the crisis; and provide a factual foundation for the ongoing effort to fortify the country against the recurrence of a similar crisis in the future.

Using internal documents, communications, and interviews, the Report attempts to provide the clearest picture yet of what took place inside the walls of some of the financial institutions and regulatory agencies that contributed to the crisis. The investigation found that the crisis was not a natural disaster, but the result of high risk, complex financial products;  undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.

While this Report does not attempt to examine every key moment, or analyze every important cause of the crisis, it provides new, detailed, and compelling evidence of what happened. In so doing, we hope the Report leads to solutions that prevent it from happening again.

Click image below to continue…

By DIANA B. HENRIQUES
Published: March 11, 2011

The Justice Department is investigating allegations that a mortgage subsidiary of Morgan Stanley foreclosed on almost two dozen military families from 2006 to 2008 in violation of a longstanding law aimed at preventing such action.

A department spokeswoman confirmed on Friday that the Morgan Stanley unit, Saxon Mortgage Services, is one of several mortgage and lending companies being investigated by its civil rights division. The inquiry is focused on possible violations of a federal law that bars lenders from foreclosing on active-duty service members without a court hearing.

Continue reading… New York Times

* Allegations Deutsche Bank filed false documents

* Inquiry could affect foreclosures across United States

* Testimony demanded from Deutsche Bank officials

By Scot J. Paltrow

NEW YORK, Jan 28 (Reuters) – A branch of the U.S. Department of Justice is investigating whether Deutsche Bank (DBKGn.DE) filed false documents and attempted to mislead a bankruptcy judge in a foreclosure action.

Although the investigation involves the case of only one homeowner in Connecticut, a court document filed on Jan. 26 by the United States Trustee’s Office said it wants to elicit information about Deutsche Bank’s practices in general in foreclosure cases.

The inquiry involves Deutsche Bank National Trust Co, the Deutsche Bank unit that acts as trustee for thousands of trusts that invested in mortgage-backed securities. The U.S. Trustees’ Office is a division of the Department of Justice responsible for overseeing administration of bankruptcy cases.

In recent months, the office has stepped up efforts around the United States to block banks and law firms from using false or fabricated documents in home foreclosure actions. The effort follows disclosures in October 2010 of large-scale “robo-signing”, the mass signing of foreclosure affidavits containing “facts” that had never been checked, and wide production of false mortgage assignments.

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Via: NakedCapitalism

A new development is that the US Bankruptcy Trustee, which is part of the Department of Justice, has started poking around the nether world of slipshod and possible made-up documents, and is asking banks to explain what they are up to. These inquiries may be paving the ground for broader-based action.

[…]

DeutscheBank purports to be the trustee for a particular 2005 mortgage securitization which contains the mortgage at issue. This is a partial list of the documentation problems; the motion itself makes for instructive reading:
In the first filing, Deutsche provides a copy of an undated promissory note which is not made out to the trust but the originator. A few days later, Deutshce filed an objection to the debtor’s plan of reorganization, and in it said the mortgage (the lien, not the note) had been recorded as transferred from the originator to Sand Canyon (a unit of Option One) in 2005 and then transferred to Deutsche less than two weeks before the bankruptcy filing. Note that a 2010 transfer is well outside the time parameters stipulated in the pooling and servicing agreement.

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William K. Black
Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle
Posted: December 28, 2010 05:29 PM

The role of the criminal justice system with regard to financial fraud by elite bankers in 2011 is likely to reprise its role last decade — de facto decriminalization. The Galleon investigation of insider trading at hedge funds will take much of the FBI’s and the Department of Justice’s (DOJ) focus.

The state attorneys general investigations of foreclosure fraud do focus on the major players such as the Bank of America (BoA), but they are unlikely to lead to criminal liability for any senior bank officials. It is most likely that they will lead to financial settlements that include new funding for loan modifications.

The FBI and the DOJ remain unlikely to prosecute the elite bank officers that ran the enormous “accounting control frauds” that drove the financial crisis. While over 1000 elites were convicted of felonies arising from the savings and loan (S&L) debacle, there are no convictions of controlling officers of the large nonprime lenders. The only indictment of controlling officers of a far smaller nonprime lender arose not from an investigation of the nonprime loans but rather from the lender’s alleged efforts to defraud the federal government’s TARP bailout program.

What has gone so catastrophically wrong with DOJ, and why has it continued so long? The fundamental flaw is that DOJ’s senior leadership cannot conceive of elite bankers as criminals.

Task force probing whether banks broke federal laws during home seizures

Washington Post Staff Writer
Tuesday, October 19, 2010; 3:10 PM

Federal law enforcement officials are investigating possible criminal violations in connection with the national foreclosure crisis, examining whether financial firms broke federal laws when they filed fraudulent court documents to seize people’s homes, according to people familiar with the matter.

The Obama administration’s Financial Fraud Enforcement Task Force is in the early stages of an investigation into whether banks and other companies that submitted flawed paperwork in state foreclosure proceedings may also have misled federal housing agencies, which now own or insure a majority of home loans, according to these sources.

The task force, which includes investigators from the Justice Department, Department of Housing and Urban Development and other agencies, is also looking into whether the submission of flawed paperwork during the foreclosure process violated mail or wire fraud laws. Financial fraud cases often involve these statutes.

Continue reading …WASHINGTON POST

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Secretary Brunner: Please tell President Obama NOT to sign the Interstate Recognition of Notarizations Act

On Monday, September 27, 2010, U.S. Senator Bob Casey (D-PA), on the Senate floor, asked that the Judiciary Committee be discharged from further consideration of a bill that would hurt consumers.

H.R. 3808 requires federal and state courts to recognize notarized documents from other states, including ones that contain electronic notarizations that are not subject to the same consumer safeguards of documents notarized in person. Some financial institutions are using electronic notarizations to process home foreclosure documents.

Sen. Casey asked that the Senate move forward with immediate consideration of the bill with unanimous consent that the bill pass with no other action or debate. The Senate passed the bill without amendment by unanimous consent. It now sits on the President’s desk. I’m asking you to email or call the President at 202-456-1111 to ask him not to sign the bill.

H.R. 3808 is known as the “Interstate Recognition of Notarizations Act.” It passed the House under a suspension of the rules in April 2010. It requires federal and state courts to recognize any notarization that is lawful in the state where the notary is licensed. Now, in one day, it passed in the Senate.

When I learned of it last Thursday, it sounded innocuous to me, but then I started looking at the timing of the bill. GMAC, owned by Ally, had just suspended its foreclosure actions in 23 states, including Ohio. I had already referred Chase Home Finance, LLC, on August 23, 2010, to the U.S. Department of Justice, asking it to review and investigate Chase’s document notarization practices in home foreclosures (18,000 documents per month were being notarized by 8 people, along with other irregularities). I license notaries in the State of Ohio. Even though I don’t have the power under state law to investigate or prosecute, I couldn’t stand idly by without acting. That’s why I’m asking you to email or call the President at 202-456-1111 to ask him not to sign the bill.

Last Wednesday, the day before I announced the DOJ referral, JPMorgan Chase announced it was having third party counsel review its document procedures for foreclosures. Just two days before, the U.S. Senate had rushed through H.R. 3808. Something didn’t seem right. Since then others agree with me.

“Unfortunately, concerns have been raised that Ally’s practices are not an anomaly in this industry, and that these bad practices are used by numerous other companies as well,”

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By CARRICK MOLLENKAMP And SERENA NG

Federal probes of the collapsed mortgage-bond boom are shedding light on how Wall Street firms sometimes created securities and sold them to one set of investors, while advising others to bet against them.

One firm that was a major player in mortgage securities, Deutsche Bank AG, illustrates a pattern investigators are looking at. While creating and selling mortgage securities to some of its clients, the big German bank was not only advising other clients to bet the other way, but also sometimes doing so itself.

A Deutsche trader helped create an index that made it easy to bet against housing, and the bank itself then used the index to do just that.

After the collapse of mortgage securities led to a costly bailout of the firm that insured many such securities—American International Group Inc.—some of the federal cash that was sunk into AIG flowed to Deutsche, to cover bearish bets by its hedge-fund clients.

Deutsche’s actions are a vivid example of potential conflicts on Wall Street—the way big financial firms play both sides of the fence with investors. The issue became more extreme during the mortgage bubble and subsequent bust because of the size of the bets on Wall Street and subsequent losses on Main Street.

Regulators now are grappling with whether the business-as-usual conduct at financial firms merely looks bad in hindsight, or whether there were misrepresentations or other legal issues that need to be further investigated and guarded against in the future. “This is a gray area that we need more investigation into,” says Andrew Lo, a finance professor at Massachusetts Institute of Technology and a hedge-fund manager.

Deutsche says that helping investors bet either way—either for or against an asset—is part of doing business for a securities firm.

“Some clients sought more exposure to the housing market, while others sought less,” a spokesman for Deutsche said. “We served clients whatever their investment objective, but only after being satisfied that they had arrived at their view after thorough consideration.”

Continue reading …The Wall Street Journal

Contributed by muckracker1 (Editor) beforeitsnews.com
Tue May 25 2010 17:57

Latest in 83 year old Black farmer’s fight against illegal foreclosure:
Harry Young files $100 million lawsuit against DOJ and USDA based on loan officer’s testimony at Young’s trial

by Monica Davis

Harry Young is an 83 year old farmer in western Kentucky. He has been waging a five year legal fight to regain his land after the government foreclosured and auctioned the property in 2005. Young filed a $100 million lawsuit against the Secretary of the United States Department of Agriculture, the Department of Justice and various federal officials May 24, 2010. He is seeking a jury trial.

Young, whose land was foreclosed and auctioned in what he contends was an illegal foreclosure, was arrested and tried on charges of allegedly making threats against the Farm Services Agency in Owensboro, Kentucky. He was the last black farmer operating in three western Kentucky counties when his land was sold at what supporters claim was an illegal auction based on fraud in 2005.

At the time, he was not allowed to present evidence of his payments. Young has denied the allegations, that he: made threats, and that he hadn’t made payments on his loan–as alleged by the Assistant US Attorney, who said, in a 2005 press release that “…for many years, Mr. Young had] lived in this house and farmed the land without making payments.”

Young’s land,which includes coal and oil deposits worth as much as $750,000,000 was sold at an auction which supporters say was based on fraudulent, perjured information by federal officials. After the auction,
Young filed suit against the U.S. Department of Agriculture and FSA in May in U.S. District Court in Louisville. In the suit, he asks for $25 million for “the embarrassment, humiliation, pain and suffering and personal indignities” caused by the USDA and FSA. He also asks for $5 million for loss of income from farm and related operations. (Local paper.)

That suit, and two others, were thrown out, based on information from the USDA, which did not include the receipt for the payments totaling over $100,000 in 1985/86. Young was tried on the threat charges in the Western District of Federal Court in Paducah, Kentucky. Supporters say the charges were retaliation for his refusal to stop legal action to regain his farm. His trial on the threat allegations resulted in a hung jury on . Rather than risk another trial, Young accepted a plea bargain deal, where he accepted a pre-trial diversion agreement, agreeing to “stay out of trouble for a year.”

Several issues arise: 1. the government did not acknowledge his loan payments; 2. his account was credited with a loan that another farmer received; and 3. he never received a jury trial in earlier proceedings.

According to a local newspaper covering the foreclosure in 2005:

…Young, who is black, says he is a victim of a racist organization. He points to a letter from Jeffery Hall, state FSA executive director, in December 2004 stating that “no voluntary payments on Mr. Young’s account (have) been received since 1980,” and Young “has remained on the property basically rent free.”

The letter contradicts financial statements that show disbursements of $121,800.26 and $9,394.59 from an escrow account to the Farmers Home Administration, the FSA’s former name, in 1985 and 1986, Young said. (Local paper)

Young also said he was charged interest for loans he never took out. “I don’t owe them nothing,” he said. “I’ve overpaid them if they mark interest off.” (Local paper)

Under oath, in contrast to what had been said earlier–that “anyone could have typed up” the receipt which Young said proved his case, the local FSA county supervisor acknowledged that the signature on the receipt for two loan payments was his. On that basis, Young filed a his latest lawsuit.

For the past 20 years, that this legal battle has been waged, Mr. Young has said that the government was lying about his failure to pay his loan, and had charged him for a loan which he never applied for–the proceeds of which reportedly went to a white farmer. Young has always maintained that he paid his loans–which has been corroborated by by court testimony of the county supervisor of the Farm Services Agency (FSA) and its parent agency, the US Department of Agriculture (USDA), which had earlier claimed that Young hadn’t made a payment on his loan in twenty years. In 2005, the US Attorney out of Louisville, Kentucky, in a press release, said, “For many years, Mr. Young has lived in this house and farmed the land without making payments.”

Justice Department attorneys refused to consider the receipt from the County Supervisor as evidence in 2005. And, when Young showed the receipt to a US Marshal during the auction of his property, the US Marshal reportedly said: “I can’t read.”

 I would *NOT* make a report by e-mail.  I would send a signature-required package.

http://www.stopfraud.gov/report.html  

Fraudulent activities should always be reported to your local law enforcement office. The following is additional information on how specific types of fraud complaints or cases of suspected fraud can be submitted to federal agencies.