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Justice Denied: Why Countrywide Chief Fraudster Mozilo Isn't Going to Prison

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posted on Feb, 23 2011 @ 08:04 PM
Justice Denied!

From Daily Finance
By ABIGAIL FIELD Posted 9:50 AM 02/23/11

Angelo Mozilo, the former head of Countrywide Financial, isn't going to jail. In fact, he won't even face a trial in which there's a chance of going to jail -- nor will he experience the stress of being charged.

Countrywide's vast numbers of fraudulent mortgages -- which were created to feed a securitization machine, not to secure repayment of properly underwritten loans -- may still doom Bank of America (BAC), which purchased Countrywide in 2008. Countrywide was such a bad actor it was sued by 11 attorneys general, leading to an $8.7 billion predatory lending settlement.

Sufficient evidence of Mozilo's knowledge of -- indeed, his direction of -- Countrywide's bad deeds existed for him to accept a record $67 million settlement with the Securities and Exchange Commission. As large as that was, from the point of view of anyone looking for justice, the deal was entirely unsatisfactory. First, because Bank of America picked up most of the tab. Second, because even if Mozilo had paid the full amount, it would only have been about half of the $132 million he took home in 2007.

The New York Times reported this weekend on a Countrywide whistle-blower -- Michael Winston -- who wouldn't play ball with the company's practices, and was fired as a thank you. A jury awarded him $4 million as compensation for the firing. Surely Winston could have been a witness for the prosecution. But the prosecutors have dropped the case.

Mark Malone, a former federal and state prosecutor who spent eight years prosecuting the mob, white collar criminals and political corruption, said:

"Mozilo was the boss of bosses of predatory lending. He was the inspiration for MERS, the electronic database used to facilitate much of the fraud surrounding predatory lending, mortgage securitization and fraudulent foreclosure practices. If prosecutors are not going to go after low-hanging fruit like Mozilo, the rest of the bankster bosses can sleep well, assured that their fortunes are secure.
Why No Bankers Have Been Charged

Mozillo is just one of a line of financial crisis titans -- in my opinion, crooks -- who are not being criminally charged. And in the little civil justice pursued so far, not only have judges questioned the lightness of the settlements, but the SEC's top cop, Robert Khuzami, is being investigated for overruling prosecution-minded SEC staff and cutting a sweetheart deal for a couple of Citibank (C) executives.

So what is going on? After all, we're a nation that takes fighting crime so seriously we use SWAT teams and submachine guns to pursue marijuana possessors and dealers. And we go after some white-collar crime aggressively, such as targeting insider trading with wiretaps and informants. We even convicted some of the Enron guys, and jailed a big law partner for facilitating the Refco fraud.

But not a single architect of the financial crisis that brought America to its knees has yet been charged. And of all the crimes against "the People," the financial crisis ranks as one of the all-time worst.

As Yves Smith at business blog Naked Capitalism touched on, one reason prosecutors aren't acting has to do with the laws and attitudes of the enforcers. Another reason, detailed by Matt Taibbi in Rolling Stone, is the revolving door between the U.S. Attorney's office in the Southern District of New York and the SEC on the prosecution side, and the big firms that defend the crooks. (The SDNY has Wall Street in its jurisdiction. Although the SEC can't bring criminal charges, it investigates and sends cases to the SDNY.) To that list, it's important to add the revolving door between big corporate law firms and the Justice Department in Washington.
*************************************************************************************************************************************More info at the link!


edit on 2/23/2011 by ZindoDoone because: (no reason given)

posted on Feb, 23 2011 @ 08:19 PM
If, hypothetically, there needed to be a revolution in America, it should be an Egyptian style shut down of these mega-corporate money-rapists.

The people need to take back control of production from the robber-barons of the 21st century.

posted on Feb, 23 2011 @ 08:26 PM
reply to post by pirhanna

I agree with you in principal but the fall out would take years to settle and hundreds of thousands would suffer.(I know, that many are already suffering but this would be different) We may never recover from something as brutal as what is happening in the Mid-East.! The other part of the article that's in the link gives examples of both sides being too chummy to actually punish anyone!

posted on Feb, 23 2011 @ 08:38 PM
Don't all those SEC settlements include something about not pulling anymore illegal crap? Isn't that supposed to be like probation?

So why aren't any of these repeat offenders nailed for it?

Why no financial three-strikes laws? No zero-tolerance for financial misdeeds?

Rigged system, run by the criminals for the criminals.
edit on 23-2-2011 by apacheman because: (no reason given)

posted on Feb, 25 2011 @ 04:42 PM
reply to post by apacheman

That's basically what the second part of that article says. That the SEC and the FBI as well as Wall Street have a revolving door concept of justice that has no real punishment when it's in the financial sector. The fox is indeed guarding the hen house in al aspects of financial dealings good and bad!


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