William K. Black, a professor of Economics and Law, UMKC, a former financial regulator and author of The Best Way to Rob a Bank is To Own One, and one of our Bank Whistleblowers United (BWU) co-founders has decided we could “retire” our series of BWU Lemon Awards and permanently award “a Lemon” award to the Department of Justice (DOJ).
In a recent Huffington Post blog, Black says “this current award is particularly close to our hearts because it involves the sworn testimony of one of our co-founders, Richard Bowen.”
I second his choice. What prompted this award were two recent revelations; one of which is the release by the National Archives of the Financial Crisis Inquiry Commission (FCIC) documents in which the criminal referrals that FCIC made to the DOJ were revealed.
You may recall I spoke of this and the National Archives release in previous posts and I addressed Citigroup’s senior leadership frauds, which were the subject of not one but two separate criminal referrals made by the FCIC; one of which was based solely on my testimony. Black points out, as did I, that to date, the mainstream press has ignored the referrals based on this testimony.
He notes that the reason for awarding this lemon award to the DOJ is their refusal to prosecute any Citigroup leader despite receiving two separate FCIC criminal referrals based upon two different bodies of evidence. The DOJ did not alert the public to this failure; it was the Inspector General (IG) of the Federal Housing Finance Agency (FHFA) that did so.
The IG report says “that the evidence had established that Citigroup officials had committed the key elements of fraud. The totality of the evidence and testimony obtained showed that Citigroup knowingly and purposefully purchased and securitized loans that did not meet representation and warranties or in many cases were outright fraudulent loans.”
As Black says, my testimony “gave the DOJ a case against Citigroup’s senior leaders on a platinum platter. He put the senior leadership, including Rubin, on direct, written notice of Citigroup’s massive fraud.” The frauds mentioned involved over $100 billion in fraudulent sales, which affected Fannie Mae, Freddie Mac and customers through securitizing toxic loans and selling them through false “reps and warranties.”
Black notes that my team was finding fraud evidence that started at 40% and grew to 80% and that Citigroup chose to purchase mortgages from the most fraudulent loan originators and resellers, like Argent.
Further, Citigroup bought Argent in 2007! This was after the real estate situation and meltdown was known, after Argent’s frauds were revealed and after my team had warned Citi’s top leadership that Argent’s loans were endemically fraudulent!
In his very thorough post, Black outlines the FHFA specific complaints. He quotes the Miami Herald, December 2008 that says, ”employees of Argent Mortgage had a practice of actively assisting brokers to falsify information on loan applications. They would “tutor . . . mortgage brokers in the art of fraud.” Employees “taught (brokers) how to doctor credit reports, coached them to inflate (borrower) income on loan applications, and helped them invent phantom jobs for borrowers” so that loans could be approved (“Borrowers Betrayed, Part 4,” Miami Herald, Dec. 7, 2008).”
Black concludes, “the DOJ’s refusal to prosecute Citigroup’s senior managers deserves our maximum 10 lemon award”. He is clear, as are our other co-founders, Gary Aguirre, Michael Winston and myself, “that the DOJ is actively hostile to holding elite bankers accountable for their crimes.”
It is also pretty clear to me that the DOJ and our government officials do not and will not hold the Too-Big-To-Fail banks to account and are instead giving them carte blanche to continue robbing the American taxpayer. Lemon awards may be a start; using our voices to protest to our elected officials and demanding accountability is another step that must be taken.
[tweetthis url=”http://bit.ly/1WuwG2y”]Should we give a permanent “Lemon” award to the #DOJ? #tbtf ~ @RichardMBowen[/tweetthis]
Related Posts
Silence is Deadly. Lessons Learned.
Whistleblowers: Inside the Mortgage Meltdown
Department of Justice – Encouraging Whistle Blowing or Blowing Smoke?
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
