A federal crackdown is proceeding quietly against bankers accused of systematically defrauding states, local governments and non-profits.
Since 2009, federal authorities have secured 19 convictions or guilty pleas as part of the investigation, including seven since April. The cases have put a spotlight on the municipal bond market, an esoteric corner of the finance world where prosecutors say Wall Street firms have repeatedly used inside information to pad their bottom lines at the public’s expense.
“[T]hese complex, seemingly uninteresting backroom deals have a real impact on taxpayers,” Richard Weber, head of the Internal Revenue Service’s criminal division, said following the convictions of three former UBS bankers last month.
So let me ask the silly question that nobody is asking — have these deals been unwound or have the guilty institutions been forced to cough up every single dime of ill-gotten gain back to the municipal government that got bilked, including all the fees from the fraudulent scheme and every dollar of excess interest resulting from the bid-rigging?
Or did the beneficiaries get to keep some or all of what they stole and did the taxpayers get and are continuing to get financially raped?
I remind everyone that in the case of Jefferson County Alabama the 400% sewer and water bill increases remain even though some of the people involved were prosecuted and convicted.
If the taxpayers were not made whole and the institutions that were involved were not forced to remit to those taxpayers every single dime of ill-gotten gains, with interest, along with every dime of fees they “earned” through these fraudulent deals then in point of fact the crime still did pay even if there have been a few limited prosecutions of “the little people” at the bottom who were involved.