Tag Archives: FBI

Congressman wants FBI to release details of financial crisis investigations

It’s about time….

If you’ve ever wondered why more (any) senior executives weren’t held responsible for their companies’ conduct during the financial crisis, you’re not alone.

Representative Bill Pascrell, D-NJ, feels the same way and he wants answers.

Pascrell, who serves on the House Ways and Means Committee, sent a letter Tuesday toFederal Bureau of Investigations Director James Comey, calling on the FBI to release the details on its financial crisis investigations.

In the aftermath of the financial crisis, dozens of companies have paid out billionsupon billions in fines for various acts of malfeasance during the financial crisis, but to this point, many of the executives who lead those companies have escaped punishment, including Angelo Mozilo, the founder of Countrywide.

Earlier this year, the Department of Justice abandoned its attempt to sue Mozilo for his company’s actions.

Countrywide originated more mortgages in this country from 2004 to 2007 than any other lender. During that time, Countrywide closed so many subprime mortgages it remained a top-5 producer for that home loan product. The same goes for other loans, such as Alt-A.

One of Countrywide’s executives was actually fined for her actions during the crisis, but that fine was recently overturned.

In May, the Second Circuit overturned a $1.27 billion penalty against Bank of America in a fraud case over defective mortgages sold by Countrywide in the run-up to the housing crisis.

The Second Circuit’s May decision also voided the $1 million penalty against Rebecca Mairone, who the New York Times once referred to as the “face of the housing crisis.”

Read on.

What Happened When the FBI Investigated Foreclosure Fraud in Florida

By David Dayen

Six years ago, FBI agents in Jacksonville, Florida, wrote a memo to their bosses in Washington, DC, that could have unraveled the largest consumer fraud in American history. It went to the heart of the shady mortgage industry that precipitated the financial crisis, and the case promised to involve nearly every major bank in the country, honing in on the despicable practice of using bogus documents to illegally kick people out of their homes.

But despite impaneling a grand jury, calling in dozens of agents and forensic examiners, doing 75 interviews, issuing hundreds of subpoenas, and reviewing millions of documents, the criminal investigation resulted in just one conviction. And that convict—Lorraine Brown, CEO of the third-party company DocX that facilitated the fraud scheme—was sent to prison for duping the banks.

Thanks to a Freedom of Information Act request, VICE has obtained some 600 pages of documents from the Jacksonville FBI field office showing how agents conducted a sprawling investigation. (The Jacksonville case is also featured in my new book, Chain of Title.) The documents suggest the feds gained a detailed understanding of how and why the mortgage industry enlisted third-party companies to create false documents they presented to courts, as detailed in the 2012 National Mortgage Settlement, for which the big banks paid billions in civil fines. The banks’ conduct is described in the settlement documents as “unlawful,” and the Jacksonville FBI had it nailed almost two years earlier.

Read on.

FBI accused of planting hidden microphones around Bay Area to nab real estate investors

Trying to gather more evidence of bid rigging at foreclosure auctions

Agents from the Federal Bureau of Investigation reportedly planted hidden microphones in and around the San Francisco Bay Area as part of an effort to catch several real estate investors suspected of bid rigging at local foreclosure auctions, according San Francisco’s CBS KPIX 5 and the Daily Caller.

Both reports state that between March 2010 and January 2011, the FBI allegedly placed hidden microphones inside light fixtures, at a bus stop and in other locations around an Oakland courthouse without a warrant to obtain more evidence of fixing foreclosure auctions.

Read on.

FBI Opens Investigation Into Malaysian PM’s Goldman-Financed Slush Fund

WSJ is reporting that the FBI has opened an investigation into the development fund. Here’s more:

The FBI has opened an investigation into allegations of money-laundering related to a Malaysian state investment fund, a person familiar with the matter said.

The scope of the investigation wasn’t known. It is the latest in a series of international investigations related to the fund that have been revealed in the past several weeks.

The international investigations center on entities related to 1Malaysia Development Bhd., which was set up by Prime Minister Najib Razak in 2009 to help drive the economy. The fund is having difficulty repaying more than $11 billion of debt and is at the center of investigations that are destabilizing the government.

Late Friday, a former member of Malaysia’s ruling party who had raised questions about money transfers to the Malaysian prime minister was arrested on charges of attempting to undermine democracy, his lawyer Matthias Chang said.


The arrest of Khairuddin Abu Hassan, who remained in custody on Saturday, prevented him from traveling to New York where he planned to urge U.S. authorities to investigate the transfers, Mr. Chang said.

A spokeswoman for the FBI’s New York office said that no agent in the office had arranged to speak with Mr. Khairuddin or had any previous contact with him.

Two of the transfers were made through the Singapore branch of a Swiss private bank and routed via Wells Fargo & Co. Wells Fargo declined to comment.

Ex-Morgan Stanley Broker Fired for Helping Feds Investigate Fraud, Suit Says

A former Morgan Stanley broker has filed a suit accusing the firm of firing him for being a whistleblower who had raised allegations of insider trading involving its Knoxville, Tenn., branch and had helped federal authorities uncover fraud at a truck-stop chain.

The broker, John Verble, says in his filing that he wore a wire to help the Federal Bureau of Investigation investigate the fraud case, and that a superior at the Morgan Stanley office physically threatened him when his efforts became known.

“As a direct result of plaintiff’s involvement in assisting the FBI to investigate violations…plaintiff was retaliated against, discriminated against and illegally discharged from his position in violation of numerous federal statutes,” the complaint said.

Mr. Verble, now a financial adviser at Raymond James Financial Inc., wants either to return to his old job or damages equal to double his roughly $360,000 salary until he reaches 68 years of age, according to the complaint. He is now in his mid-50s, his lawyer’s office says.

Read on.