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A telephone call between a financial adviser in Beverly Hills and a trader in New York was all it took to fleece taxpayers on a water-and-sewer financing deal in West Virginia. The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market.
The call came less than two hours before bids were due for contracts to manage $90 million raised with the sale of West Virginia bonds. On one end of the line was Steven Goldberg, a trader with Financial Security Assurance Holdings Ltd. On the other was Zevi Wolmark, of advisory
The money was intended to build schools, hospitals, roads and sewers and refinance higher-cost debt.
CDR helped arrange deals in which financial firms took millions of dollars in profits from GICs, Bloomberg News reported in October 2006. Almost all of the deals were shams: As much as $7 billion in bond-issue proceeds were invested in GICs but never spent for the intended purpose of providing services to taxpayers.
CDR signed off on interest-rate swaps to municipalities, as banks took hidden fees sometimes 10 times as much as they charged on fixed-rate bond deals, according to data compiled by Bloomberg. For the public, the swaps were fraught with risks.
“Few people understand this part of public finance,” Georgia State’s Hildreth said. “It is a very small band of brothers who know the market. So, of course, they are going to reap the benefits
“The government continues to show that it simply doesn’t understand how this market operated,” Zelenko said in an e- mail.
Originally posted by Romekje
There's no fighting the elite if it comes down to money..
The Rotschilds alone hold more then 50% of the global wealth in money and land lol.
Ex-UBS Banker Pleads Guilty to Muni-Bond Fraud
Mark Zaino, a 35-year-old former UBS employee, became the first Wall Street banker to admit to a role in a conspiracy to pay public agencies below-market returns on investment deals, according to his guilty plea to fraud and conspiracy charges Wednesday and Justice Department records filed in U.S. District Court in Manhattan.
The Justice Department’s more than three-year investigation is the broadest criminal probe ever of the $2.8 trillion municipal bond market, which centers on the auctions for so- called guaranteed investment contracts, known as GICs.