America vs. Bank of America Lawsuit: “Spectacularly Brazen” Fraud. No Criminal Charges

America vs. Bank of America Lawsuit: “Spectacularly Brazen” Fraud. No Criminal Charges



In the latest token civil suit by the Obama administration
against a major Wall Street bank, the Department of Justice on Wednesday
charged Bank of America with wholesale mortgage fraud.

The complaint filed by the US attorney for Manhattan, Preet Bharara,
alleges that from 2007 through 2009, Bank of America, the second biggest
US bank by assets, or its Countrywide Financial subsidiary, knowingly
and systematically sold toxic home loans to the government-sponsored
mortgage finance giants Fannie Mae and Freddie Mac.

The mortgage finance firms package home loans into securities and
sell the securities to global investors, guaranteeing the loans they
purchase. As a result of Bank of America’s fraud, the Justice Department
claims, Fannie Mae and Freddie Mac lost over $1 billion, contributing
to their near-collapse and government bailout in September 2008, which
has thus far cost US taxpayers $183 billion.

The suit alleges that after the subprime mortgage market began to
implode in 2007, Countrywide, then an independent company and the
biggest US mortgage originator, launched a new program to generate the
greatest possible volume of new mortgages by scrapping quality controls.
It then sold defective loans to Fannie Mae and Freddie Mac, passing
them off as good investments.

Bank of America bought Countrywide in July of 2008 and, according to
the federal complaint, continued the fraudulent loan program through
2009, i.e., after Bank of America had been bailed out with $45 billion
in taxpayer funds under the Troubled Asset Relief Program (TARP).

In a statement released Wednesday, US Attorney Bharara summed up in
fairly scathing language the criminal activity alleged in his suit:

“The fraudulent conduct alleged in
today’s complaint was spectacularly brazen in scope. As alleged, through
a program aptly named ‘the Hustle,’ Countrywide and Bank of American
made disastrously bad loans and stuck taxpayers with the bill. As
described, Countrywide and Bank of America systematically removed every
check in favor of its own balance—they cast aside underwriters,
eliminated quality controls, incentivized unqualified personnel to cut
corners, and concealed the resulting defects. These toxic products were
then sold to the government sponsored enterprises as good loans.”

The statement went on to say that Countrywide’s so-called “Hustle”
process (shorthand for High-Speed Swim Lane) “generated thousands of
fraudulent or otherwise defective residential mortgage loans sold to
Fannie Mae and Freddie Mac that later defaulted, causing … countless
foreclosures.” The program also involved “widespread falsification” of
mortgage data.

According to the federal complaint, Countrywide executives were aware
of the fraud. A quality review in January 2008 showed that 57 percent
of Hustle loans went into default, but top management buried the review.

The federal complaint also charged that Bank of America is refusing
to buy back mortgages “even where the loans admittedly contained
material defects or even fraudulent misrepresentations.”

Bank of America denied all charges. It struck a defiant tone,
declaring, “At some point Bank of America can’t be expected to
compensate every entity that claims losses that actually were caused by
the economic downturn.”

The bank has good reason to be confident it will suffer no major
consequences as a result of the Justice Department suit. Bharara said he
would seek restitution and damages of “over $1 billion,” an amount that
can be handled with relative ease by an institution with more than $2
trillion in assets and over $115 billion in revenues.

More importantly, the Obama administration in this latest suit has
continued its practice of refusing to lodge criminal charges against
those whose illegal actions helped trigger the 2008 financial meltdown
and global economic crisis. As with previous suits filed against Wall
Street banks by various government agencies, the Justice Department
complaint against Bank of America does not name a single official of
either Countrywide or the bank itself.

The White House may very well have pushed for this suit to be filed
two weeks before the November 6 election to boost its absurd pretensions
to taking Wall Street to task. It is the third federal action against a
major bank announced this month, following civil suits against JPMorgan
Chase and Wells Fargo.

But the record speaks for itself. Not a single high-level banker has
been prosecuted, let alone jailed, since the Wall Street crash of
September 2008. Not one major civil case has actually been brought to
trial. Instead, the government has allowed the culprit banks to work out
settlements in which they paid token fines and admitted no wrongdoing.

The former head of Countrywide, Anthony Mozilo, was let off by the
Securities and Exchange Commission with a fine of $67.5 million and no
admission of guilt in October of 2010. The following year, the Justice
Department quietly dropped its criminal probe of Mozilo.

Last month, Bank of America agreed to pay $2.48 billion to settle
claims it misled investors about its acquisition of Merrill Lynch at the
height of the financial crisis in late 2008. In February of this year,
the government allowed the bank to settle fraud allegations involving
Federal Housing Administration loans for $1 billion, also without
admitting wrongdoing.

In the statement he issued Wednesday, Bharara boasted that over the
past 18 months his office has settled lawsuits concerning mortgage fraud
on a similar basis with CitiMortgage, Flagstar Bank and Deutsche Bank.
Noting that he has pending lawsuits against Wells Fargo and Allied Home
Mortgage, Bharara made a point of associating his actions with the
Financial Fraud Enforcement Task Force announced by Barack Obama last
January.

Obama’s task force is a fraud, intended to obscure his
administration’s systematic shielding of financial criminals whose
avarice and criminality have produced incalculable levels of suffering
and social distress not only in the US, but around the world. Meanwhile,
as is well known on Wall Street and in Washington, the same types of
fraud and swindling that triggered the crisis more than four years ago
continue unabated today.


Source:-
http://www.globalresearch.ca/america-vs-bank-of-america-lawsuit-spectacularly-brazen-fraud-no-criminal-charges/5309945