Mirabile Dictu! Bank of America Found Guilty of Fraud for “Hustle” Mortgage Lending Program




Key sections of the write-up at the :

The verdict marks a victory for the U.S. attorney for the Southern District, Preet Bharara, who is the first federal prosecutor to win a case by using a federal statute created during the savings-and-loan crisis. The Financial Institutions Reform, Recovery and Enforcement Act of 1989, or Firrea, extends the statute of limitations for civil fraud to 10 years.

To sue under Firrea, the government had to establish that a federally insured financial institution was harmed by the fraudulent conduct. The government argued that Bank of America, a federally insured financial institution, harmed itself by exposing the bank to fallout from the conduct…

George Zelcs, a partner with the law firm Korein Tillery LLC, said Firrea gives “a broad range of targets, and couple that with a longer statute of limitations, and you’re going to be able to have more options on claims and who you can bring them against.”

William Black, a former federal regulator and professor at the University of Missouri-Kansas City law school, said Firrea is a useful tool because limited government resources make it hard for prosecutors to complete investigations in five years, the normal statute of limitations on fraud. “It’s a good thing that the law exists, and this shows you why five years is an insufficient statute of limitations given the complexity in these cases,” he said.

The saying is a half a loaf is better than none, but this is mere crumbs.

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  1. Lambert Strether

    Wake me when a CEO goes to jail. Of course, that will never happen, because the C-class in the FIRE sector has impunity, exactly as in a Banana Republic because freedom.

    Makes you long for the days of honest, accountable government under Bush (Enron jail time) and Reagan (S&L jail time).

    1. sue

      Still believe part of the Obama kick the can down the road-Geithner charade=Wall Street-FED subsidies involve coverup till end of statute of limitations.

      In other words, win-win-win for Wall Street banks-deal to buy back “toxic assets”-mortgage backed securities, and at full paper debt value, minus inflation of currency, over several years, and move past prosecution stage=statute of limitations.

      Advantage=Obama-DLC dems expect to get corporate campaign culture capture.

      Truth: Wall Street buys government. (Sheila Bair’s, “Bull By The Horns”)

    2. Walter Map

      CEOs are less likely to go to jail than the government’s attorneys for having inconvenienced them. “No bank officials were harmed in creating this dramatization.”

      BoA spends more than that on postage. Their attorneys must have conceded the case, figuring it wasn’t worth it to postpone the weekly golf outing.

    1. My thought as well. When it’s time to throw somebody under the bus, of course they look around for a woman. Maybe it’s just coincidence…

      1. Maybe, but the two, Chase VP/AGCs who lied through their teeth to me about Chase’s authority to convert several dozen revolving business lines of credit into 60-month amortized loans without notice were both women, and I haven’t heard that there are any tire marks on them.

  2. danseuse

    wasn’t there a dance called The Hustle? Did Countrywide use dance music to promote their program?…happy couples dancing up the sidewalk to their new (thank you countrywide!) home…

    1. LucyLulu

      They’ve got us setting the bar awfully low these days, don’t they? Compared to being a CEO who’s committed murder in Belize, fled the country, got caught in Guatemala and deported back home to US, and is not only walking around free, but has been asked to provide expert Congressional testimony on Obamacare (McAfee), a guilty verdict for fraud IS pretty damn tough.

      Definitely a bunch of misogynists in the US Attorney’s office. What other explanation could there be?

    1. Bingo. Prosecutors have yet to hit the TBTFs with anything they could be found guilty of. I wish people would stop using the term in relation to this case. It makes it sound like DOJ is actually doing its job.

  3. LucyLulu

    Could civil suits follow if the suit stems from 2007? FIRREA extends the statute of limitations to 10 years but isn’t authority to file charges under FIRREA limited to the federal government? And isn’t there an absolute SOL of five years otherwise on securities fraud? I don’t know the answers, hence why I’m asking.

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