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Archive for the ‘Scam’ Category
Oh, Handcuffs? Hmmmm This Makes Two!
March 3rd, 2011 | 
Author:
Washington, D.C., March 2, 2011 – The Securities and Exchange Commission today charged a former vice president at Colonial Bank who was the head of its mortgage warehouse lending division with conducting a $1.5 billion securities fraud scheme.
The SEC alleges that Catherine L. Kissick enabled the sale of fictitious and impaired mortgage loans and securities from the mortgage warehouse lending division’s largest customer – Taylor, Bean & Whitaker Mortgage Corp. (TBW) – to Colonial Bank, and she caused these securities to be falsely reported to the investing public as high-quality, liquid assets.
Got the essence of this? The loans were either bad or non-existent but they were booked as good, performing, and real.
That’s nice.
But in an interesting and “oh my gosh, there’s two” sort of change, we have this:
In a related action today, Kissick pleaded guilty to criminal charges filed by the Department of Justice in the Eastern District of Virginia.
That would be the second time some criminal fun comes. There’s no update yet on the sentence, of course, but at least the plea appears to have happened. The maximum sentence for the crimes she pled to is reported to be 30 years in the Federal Lesbotell and a $250,000 fine.
Of course the SEC settled for the usual:
The SEC’s complaint charges Kissick with violations of the antifraud, reporting, books and records and internal controls provisions of the federal securities laws. Without admitting or denying the SEC’s allegations, Kissick consented to the entry of a judgment permanently enjoining her from violation of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and from aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. Kissick also consented to an order barring her from acting as an officer or director of any public company that has securities registered with the SEC pursuant to Section 12 of the Exchange Act. Kissick also consented to an order prohibiting her from serving in a senior management or control position at any mortgage-related company or other financial institution or from holding any position involving financial reporting or disclosure at a public company. The proposed preliminary settlement, under which the SEC’s requests for financial penalties against Kissick would remain pending, is subject to court approval.
DON’T DO THAT AGAIN! I SAY, DON’T DO THAT AGAIN! I WILL SLAP YOUR HANDS! YOU DO NOT HAVE TO ADMIT GUILT EVEN IF YOU JUST DID IN CRIMINAL COURT, JUST DON’T DO THAT AGAIN!
Such wonderful enforcement by the SEC – that would be “Suckers Executing Crimes”, right?
After all, we know they use their office computers for porn viewing – so there’s the “Suckers” part.
Posted in Banks, Colonial Bank, Corruption, Debt, Economic Crisis, Economy, Financial System, Fraud, Law Enforcement, Legal, Money, Scam, SEC, Securities and Exchange Commission | 
Tags: Corruption, Fraud, Law, Law Enforcement, Legal, Lenders, SEC | 
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Morning Banking Funnies (Not Really)
Coming this morning are a couple of interesting points….
The Utah Attorney General’s Office says the entity responsible for 4,000 home foreclosures yearly in the state is violating the law.
In a filing with the 10th Circuit Court of Appeals in Denver, Assistant Attorney General Jerrold Jensen said the ReconTrust Co., a unit of Bank of America, is not allowed under Utah law to conduct foreclosure sales.
The law related to this is Utah-specific and states that you must be either an attorney licensed in the state or a title company to foreclose in Utah. Bank of America argues that The National Bank Act preempts. Utah says no and there are conflicting decisions thus far.
Here’s the problem folks – this is exactly the sort of creeping loss of your right for redress that you were told wouldn’t happen when the National Bank Act was passed. You were sold convenience and competition in banking, but it was explicitly stated at the time that this would not result in your rights under state law being lost.
Now, when it suits the bankers, they argue otherwise.
Bank of America said: “Our first priority is to help our customers remain in their home as demonstrated by the more than 775,000 permanent loan modifications completed since January 2008.”
Oh really?
Well then maybe you can explain this.
I was contacted by a BofA screwee, er, “customer” yesterday with a wee problem. He’s got some financial issues and is in the middle of a bankruptcy. The house is apparently not part of the bankruptcy proceedings.
Some time last year he made a phone call to inquire about a HAMP modification.
The original loan did not include impound for taxes and insurance (“escrow.”) Suddenly, out of the middle of nowhere, BofA turns around and whacks him with a sixty percent increase in his payments, arguing that now he must pay escrow (despite the fact that the face of his note does not say so) and that he originally, at the time the note was signed, had more than 20% equity (and thus wouldn’t commonly be required to do so.) Further, they’re clearly trying to “pre-fund” the escrow account.
This is a guy with an active (but not yet discharged) bankruptcy. He clearly doesn’t have a 60% increase in his payment, or he wouldn’t be in bankruptcy.
Now, months later, nobody will talk to him and they’re threatening to throw him out of his house. They also won’t drop the escrow demand, claiming that any inquiry into a modification instantly and irrevocably forces you into escrowing.
Where did that come from? Isn’t this “Contracts 101″? The original note is still in force and effect until and unless a new one is signed. If the original note provides that when you originated you did not have to escrow, how does the servicer get to unilaterally renegotiate that and demand escrow at a later date as the result of an inquiry?
I don’t have the full set of facts on this case as of yet and will likely write more on it when I do. And I fully understand (and explained to this gent) that escrow doesn’t change the money owed, just how it’s paid. Of course if the bank is trying to pre-fund the escrow account then it’s a problem - possibly a very serious problem for someone who’s stretching to make payments to begin with.
Oh, and there’s the usual chain of acts here too. When he called he was told he didn’t qualify for HAMP as he was current, and if he wanted to be considered he had to be late. Then when he was a month late they told him he had to be three months late. And then once he was three months late (basically at their direction) they wouldn’t work with him.
Haven’t we heard this story before – hundreds of times? Servicers basically telling customers to stop paying? Isn’t the servicer supposed to work for the benefit of the investor, who’s interest is, clearly, in timely payment, not in forcing mods (or foreclosures)?
But of course late fees and penalty charges are of interest to the servicer. So are foreclosures, because they get paid first on all those accumulated late and penalty fees. Oh yeah, and since the “investor” is Fannie in this case, is this not The Federal Government looking the other way while the servicer basically rips off the consumer and the government?
Never mind that escrow impoundments are beneficial for the servicer, as they don’t pay interest on them but they get to use the money during the time they “hold” it. And since they don’t pre-pay the taxes and insurance (you’re supposed to “save” the money with them, effectively) this is interest and earnings power that accrues to them during that time, when it should accrue to you.
The general rule on these when it comes to original notes has, in every jurisdiction where I’ve lived and dealt with it, forced escrow only if you have less than 20% down at origination. They also have permitted dropping both escrow and any PMI requirement as soon as the 20% equity threshold is reached.
Again, this is a matter of contracts – where does the servicing bank get the right under the law to renegotiate the original note and “determine”, at the demand of the “investor” (in this case Fannie) that you escrow where you did not have to before based upon an inquiry related to the terms for a modification under HAMP?
Not a completed mod (HAMP does require escrows on those), not even a trial mod, but a phone call?
This smells crooked…. assuming the facts are what they are…. and in this case it may lead the person involved to lose his house.
Posted in Bank of America, Banks, Corruption, Debt, Economic Crisis, Economy, Financial System, Foreclosuregate, Foreclosures, Fraud, Government, HAMP, Money, Mortgage Industry, Mortgage Modificaton, Mortgage Servicers, Mortgages, Scam |
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Fraud As A Business Model Endorsed by The Fed And OCC
Yep…. any screwing is a good screwing, so long as a bank does it and you, the consumer, are the screwee.
WASHINGTON — Top policymakers at the Federal Reserve are fighting efforts to rein in widely reported bank abuses, sparking an inter-agency feud with the FDIC and the Treasury Department. The Fed, along with the more bank-friendly Office of the Comptroller of the Currency, is resisting moves to craft rules cracking down on banks that charge illegal fees and carry out improper foreclosures. The FDIC supports such rules, according to an FDIC official involved in the dispute.
Got that?
The Fed and OCC are resisting cracking down on ILLEGAL fees and IMPROPER foreclosures.
What part of “illegal” don’t these guys care about?
Oh, that’s simple. If it’s illegal (say, by charging an illegal fee, foreclosing by committing perjury, doctoring wire information so that the fact that you’re funding terrorism in the Middle East is obscured, or screwing municipalities with hinky derivative deals, or perhaps not even transferring mortgages into alleged mortgage-backed securities) according to The Fed and OCC it’s perfectly ok if it screws the consumer – or anyone except a bank.
But as soon as you screw a bank, why that’s really illegal and for that you should be prosecuted.
That we continue to allow this as citizens, when we, the people, have the final and in fact unalienable right to say no simply means that we get the government we deserve.
So when you get screwed (and you probably are if you’re paying your mortgage right now, since nobody will tell you who actually owns it – therefore, you don’t know if you’re paying the right person), if you get charged an illegal fee (and then forced to pay it), if you’re an investor and get screwed by a computer run by a big bank that “front runs” your trades and thus allows said bank to have an unbroken “winning” record (remember, for every winner in a trade there is a loser – guess who the loser is? Yep – it’s you) or whatever other indignity you suffer, it’s your responsibility – directly – through your continued silence and continued re-election and permission to occupy the Capital that you grant for the clownfaces in DC, including those at The Fed and the OCC, that this occurs.
It is one thing to have a set of documents called “The Declaration of Independence” (setting forth unalienable rights that you possess not from government, but simply as a consequence of existence) and “The Constitution” (which sets forth a very small number of enumerated powers for our Federal Government) but if you, the people, sit on your ass while that same government gives license to blatant and clear lawless behavior such as the charging of illegal fees and does not enforce the law, including by criminal indictment, then you in fact have nothing at all.
Enjoy your self-imposed serfdom America.
It only ends when you demand it.
To start demanding it (and note, this is only a start) go to http://stopservicerscams.com/ (link is also permanently placed in the left side bar)
Posted in Banks, Corruption, Economic Crisis, Economy, Financial System, Foreclosuregate, Foreclosures, Fraud, Mortgage Servicers, Scam |
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Holy Crap! Senator Levin Reads His E-Mail
Whodduthunk?
For about 2 years, FedUpUSA has doggedly sent Senator Carl Levin e-mails with many of our daily posts. Rarely, if ever do we get a response…..even though he happens to be my Senator, since I reside in Michigan. Actually, I was pretty sure he’d blocked my e-mails along time ago. Apparently not.
From The Market-Ticker today:
Senator Levin Quotes Tickerguy! (Flash Crash Hearings)
In the hearing going on right now, The Senator said (in part):
One well known trader, Karl Denninger, recently made this public comment about U.S. trading activity:
“Folks, this crap is totally out of hand. And it’s now a daily game that’s being played by the machines, which are the only things that can react with this sort of speed, and they’re guaranteed to screw you, the average investor or trader. Go ahead, keep thinking you can invest.” (Emphasis omitted.)
Yes, I sure did.
May I ask why Nanex was not included in these hearings? They seem to have it documented quite well.
There was also my little July 4th missive and follow-up as well.
This much we now seem to know – at least some folks on The Hill read The Ticker.
At least we know someone at Senator Levin’s office read that daily post.
Posted in Corruption, Economic Crisis, Economy, Financial System, Fraud, Scam, SEC, Senator Carl Levin, Trading |
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The Con Of The Decade Part I
By Charles Hugh Smith
The con of the decade (Part I) involves the transfer of private debt to the public (the marks), who then pays interest forever to the con artists.
I’ve laid out the Con of the Decade (Part I) in outline form:
1. Enable trillions of dollars in mortgages guaranteed to default by packaging unlimited quantities of them into mortgage-backed securities (MBS), creating umlimited demand for fraudulently originated loans.
2. Sell these MBS as “safe” to credulous investors, institutions, town councils in Norway, etc., i.e. “the bezzle” on a global scale.
3. Make huge “side bets” against these doomed mortgages so when they default then the short-side bets generate billions in profits.
4. Leverage each $1 of actual capital into $100 of high-risk bets.
5. Hide the utterly fraudulent bets offshore and/or off-balance sheet (not that the regulators you had muzzled would have noticed anyway).
6. When the longside bets go bad, transfer hundreds of billions of dollars in Federal guarantees, bailouts and backstops into the private hands which made the risky bets, either via direct payments or via proxies like AIG. Enable these private Power Elites to borrow hundreds of billions more from the Treasury/Fed at zero interest.
7. Deposit these funds at the Federal Reserve, where they earn 3-4%. Reap billions in guaranteed income by borrowing Federal money for free and getting paid interest by the Fed.
8. As profits pile up, start buying boatloads of short-term U.S. Treasuries. Now the taxpayers who absorbed the trillions in private losses and who transferred trillions in subsidies, backstops, guarantees, bailouts and loans to private banks and corporations, are now paying interest on the Treasuries their own money purchased for the banks/corporations.
9. Slowly acquire trillions of dollars in Treasuries–not difficult to do as the Federal government is borrowing $1.5 trillion a year.
10. Stop buying Treasuries and dump a boatload onto the market, forcing interest rates to rise as supply of new T-Bills exceeds demand (at least temporarily). Repeat as necessary to double and then triple interest rates paid on Treasuries.
11. Buy hundreds of billions in long-term Treasuries at high rates of interest. As interest rates rise, interest payments dwarf all other Federal spending, forcing extreme cuts in all other government spending.
12. Enjoy the hundreds of billions of dollars in interest payments being paid by taxpayers on Treasuries that were purchased with their money but which are safely in private hands.
Since the Federal government could potentially inflate away these trillions in Treasuries, buy enough elected officials to force austerity so inflation remains tame. In essence, these private banks and corporations now own the revenue stream of the Federal government and its taxpayers. Neat con, and the marks will never understand how “saving our financial system” led to their servitude to the very interests they bailed out.
The circle is now complete: in “saving our financial system,” the public borrowed trillions and transferred the money to private Power Elites, who then buy the public debt with the money swindled out of the taxpayer. Then the taxpayers transfer more wealth every year to the Power Elites/Plutocracy in the form of interest on the Treasury debt. The Power Elites will own the debt that was taken on to bail them out of bad private bets: this is the culmination of privatized gains, socialized risk.
In effect, it’s a Third World/colonial scam on a gigantic scale: plunder the public treasury, then buy the debt which was borrowed and transferred to your pockets. You are buying the country with money you borrowed from its taxpayers. No despot could do better.
Posted in Banks, Corruption, Debt, Economic Crisis, Economy, Federal Reserve, Financial System, Fraud, Government, Money, Scam |
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Will Americans Reclaim Our Nation in 2010 From the Thugs and Con Artists?
The giant banks are treating the American Citizen like we work for them, are holding the economy hostage, and are taking our deposits and using them to speculate in casino style gambling.
They’ve bought and paid for Congress and the White House. See this, this and this.
Will Americans exercise our power, or become serfs to a permanent banking royalty?
An economist says the healthcare bill “is just another bailout of the financial system”, and lawyers say that it is unconstitutional.
Will we defeat this giveaway to the insurance giants, or become permanent slaves to mandatory insurance requirements?
Top scientists, economists and environmentalists all say
that cap and trade is a scam which won’t significantly reduce C02
emissions, and will only help in making the financial players who
crashed the economy even more wealthy.
Will we defeat this
worthless scam, or allow the failed banks like Goldman Sachs, JP Morgan
and Citigroup – who have already taken many billions of taxpayer
dollars – to make a fortune off of this con game at our expense?
Will
Americans reclaim our nation in 2010 from the thugs and con artists, or
put our heads down and stay subservient while the little we have left
in the way of money, resources and dignity is stolen by the giant
banks, insurance companies and carbon trading players?
Posted in 2010, Americans, Bailout, Banks, C02, Cap and Trade, carbon trading, Citigroup, Con Artists, Congress, Corruption, Economists, Economy, Financial System, Goldman Sachs, Insurance Companies, JP Morgan, Lawyers, Money, Scam, Thugs, White House |
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