Bankster Fraud Doesn’t Really Exist (DOJ)

Everyone knows that not one Wall Street top level banker has been criminally prosecuted for the mortgage crisis that they created.  I assumed that DOJ simply was not trying to prosecute them, because their crimes seem so obvious to everyone else.  In fact, William Black at New Economic Perspectives has documented that the Assistant US Attorneys have been trained so that they cannot even suspect CEOs of any kind of fraud, and they have additionally been instructed not to look in all the places where they would find evidence of it:

In researching my series of articles on the critical omissions in Attorney General Eric Holder’s press release about the settlement with Citi I realized that I need to write multiple articles about the destructive role played by Benjamin Wagner. Holder made Wagner DOJ’s leader on mortgage fraud because Wagner was so willing to propagate the single most absurd, destructive, but so very useful (to the administration and the banksters) lie about mortgage fraud.

“Benjamin Wagner, a U.S. Attorney who is actively prosecuting mortgage fraud cases in Sacramento, Calif., points out that banks lose money when a loan turns out to be fraudulent. ‘It doesn’t make any sense to me that they would be deliberately defrauding themselves,’ Wagner said.”

This column addresses a single article Wagner’s shop published in a journal volume entitled “Mortgage Fraud” to train Assistant U.S. Attorneys (AUSAs) on how to investigate and prosecute mortgage fraud. 32 UNITED STATES ATTORNEYS’ BULLETIN MAY 2010. The title of the article is “Finding the Smoking Gun,” and the author is Barbara E. Nelan, Assistant United States Attorney, Northern District of Georgia.

This article exemplifies three decisive DOJ failures led by Wagner. AUSAs were trained by Wagner to believe three lies:

  1. The “bank,” by which he really meant the bank CEO, was always the victim of mortgage fraud and never the leader of those frauds
  2. Banking regulatory agencies had no meaningful role to play in detecting, investigating, and aiding the prosecution of frauds that was worth mentioning in the training, and
  3. Whistleblowers had no meaningful role to play in detecting and aiding the prosecution of frauds that was worth mentioning in the training

Those three lies guaranteed de facto immunity for the senior bank officers who led the three most destructive financial fraud epidemics in history.

It makes sense that if the leadership of DOJ does not want these prosecutions to occur, that they would have to train this way.  Surely some smart young AUSA would otherwise figure it out and bring a case.

Black goes on to describe how DOJ, in fact, trained AUSAs to see evidence of management fraud and misunderstand it

Black does have this one backwards:

I am friends with academic historians, and know their scorn for the “great man” style of history in which normal people barely exist and are barely considered. Under Wagner, the opposite sin occurs – the senior officers of the bank disappear from the DOJ narrative.

Actually, this is exactly “great man” style at work.  The great man does not appear because the narrative is about crime – the great man is off doing God’s work.

His conclusion:

At the end of Wagner’s training program the AUSA or FBI agent will be far less effective than before the training. They are being taught to hunt for mice and to believe that lions and hyenas do not actually exist. They are taught that the bank CEO is their invariably honest friend and the bank is the helpless victim of the fiendishly clever hairdressers, minor real estate agents, and 20 year old loan brokers whose prior job was flipping burgers. It is all a sick perversion of justice and a squandering of our grotesquely inadequate resources for prosecuting elite white-collar criminals. Holder and Wagner exemplify every warning Edwin Sutherland made 75 years ago when in his presidential address he announced the concept of white-collar crime and gave his examples showing the vastly greater ability of elites who control seemingly legitimate firms to do immense damage to society because apologists define their crimes out of existence.


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Filed under Financial, Government

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