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UPDATE: Did Wall Street Violate the Racketeering Act?

Posted by Larry Doyle on May 4, 2011 11:50 AM |

A month ago I questioned whether there was sufficient evidence of abusive and fraudulent practices in the mortgage business on Wall Street (underwriting, servicing, securitizations, etc) to make a case that the industry as a whole violated the Racketeering Act? I would not expect that our ‘leaders’ in Washington would ever think about making that case; that said, I think there is plenty of reason to believe that a very real case could be made.

What will we likely see? Perhaps a number of individual cases. We witness just such a situation today with news that the Department of Justice yesterday filed a lawsuit against Deutsche Bank for lying about the quality of loans made by a mortgage subsidiary of the German bank.
The Wall Street Journal provides further details on this case this morning, in writing, U.S. Says Deutsche Bank Lied,

The Justice Department accused Deutsche Bank AG of “recklessly” lying about the quality of loans made by a mortgage unit of the German bank and guaranteed by the U.S. government.

In a civil lawsuit filed Tuesday in federal court in Manhattan, U.S. Attorney Preet Bharara sought to recover alleged damages and losses on mortgages insured by the Department of Housing and Urban Development, which could total more than $1 billion.

The 48-page lawsuit detailed what Mr. Bharara said was a decade-long disregard of basic underwriting standards and quality control at mortgage lender MortgageIT Inc., which was acquired by Deutsche Bank in 2007.

Now I ask you, do you think that if MortgageIT lied about the quality of loans it was underwriting and had insured by the FHA, what do you think was going on at Washington Mutual, JP Morgan, Bank of America, Wells Fargo, Countrywide, Citigroup, and every other originator of mortgages? If a number of institutions were lying about the quality of their loans being insured by the FHA, collectively could they be defined as a racket and would the lying be violation of the Racketeering Act?

I don’t know. I am just asking.

Might the DOJ ask the same question and explore this possibility? Do you think Wall Street may have violated the Racketeering Act in this enormous market segment? I believe a very real majority of people in America believe the industry did. I am not saying it was necessarily a fully coordinated and organized conspiracy per se but I do believe industry norms and practices which violated the RICO Act became so deeply embedded that a very real case could be made.

Given the ongoing plight and the accompanying pain within our housing industry, this is a story which is not going away anytime soon.


GO AHEAD and please subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

April 4th, I wrote the original story which follows.

I want to thank a regular reader for prompting me to tune into 60 Minutes last evening. Watching CBS’s Scott Pelley evidence how Wall Street banks knowingly and fraudulently engaged in forging mortgage documents made me cringe and vomit as I thought of just how low these financial institutions have sunk in terms of corporate integrity.

As state attorneys general prepare to pursue these Wall Street banks for the activity of forging these documents, I would raise the question whether this coordinated forging activity rose to the level of racketeering. Did these Wall Street banks violate the Racketeer Influenced and Corrupt Organizations Act? Let’s navigate.

Before I delve into the questions surrounding the potential violation of the RICO Act, I STRONGLY encourage you to take the 5 minutes to review this summary video of the 60 Minutes’ piece last evening.

For the overachievers in the crowd who care to watch the entire outstanding 14 minute piece, I am happy to provide the link here.

I have long believed that a significant segment of the mortgage origination, securitization, and now foreclosure process was knowingly and actively engaged in a concerted fraud. The fraud encompassed not only those issuing and securitizing the mortgages but also those taking out the mortgages. While regulators and legal authorities have shown little willingness to pursue the obvious fraudulent activity, the blatant fraud involved in the forging of foreclosure documents is the ultimate insult to the indescribable injury.

I ask the following very simple question. Did this activity violate the RICO Act? In what manner might the the RICO Act have been violated? Try the following on for size:
1. Mail and wire fraud.
2. Extortionate credit transactions.
3. Obstruction of justice.
4. Interference of commerce.
5. Laundering of monetary instruments.
6. Monetary transactions in property derived from specified unlawful activities.
7. Relating to trafficking in goods and services bearing counterfeit marks.
8. Fraud in the sale of securities.

Who within these Wall Street banks was aware of the fraudulent robo-signing of the mortgage documents? Who authorized the robo-signing? We need names!!

If Wall Street was so brazen to undertake such a blatantly obvious fraud in this robo-signing activity, where else did these banks engage in fraud? Remember, you never find just one rodent.

I am no lawyer but I am not so sure you need to be in order to connect the dots involved in this ongoing housing nightmare. On behalf of every citizen and taxpayer in our nation, I call upon each and every attorney general in our nation to ask the question at the head of this commentary.

For those who truly love capitalism and the never ending pursuit of truth, transparency, and integrity our nation deserves nothing less than a full and total exposition of the obvious fraud involved in this entire mortgage travesty.

Who amongst our attorneys general have got the balls and the character to raise the question as to whether Wall Street did violate the Racketeering Act?

Thank you again to the reader who prompted me regarding last evening’s episode of 60 Minutes.

Larry Doyle

Please subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Jim

    Is there really any question? The only question is why hasn’t the RICO claim been brought previously.

    This story and the claim deserve to be AGGRESSIVELY pursued. Amazing to think that the banks would engage in such activity? Maybe not if they had gotten away with so much previously. Keep pushing the envelope if there are no REAL consequences.

  • Larry

    great article in regards to the mortgage Fraud and 60 minutes last night.

    i’m involved in the Biggest Fraud in the history of the world and there is going to be a new movie coming out about it all in the next few weeks.

    It is about the Wall Street fraud by these same banks in regards to Stock Counterfeiting. The Banks were selling Phantom Shares in the millions each day. the movie will clearly explain the hole in the system at the DTCC that has allowed these Banks to Counterfeit shares on Wall Street and steal the wealth off the investors.

    google CMKXshareholder or go to the site cmkxshareholder dot come

    Hoping the World soon learns the truth about Wall street counterfeiting.


  • fred

    What do we know? An originating lender wrote a mortgage then sold it via the securitization process. A mtg servicer, assuming the mtg is current, is collecting payment and crediting the proceeds to the current owner of the security.

    A few years after origination, the legal paperwork requirement in the transfer process, (dotting the i’s and crossing the t’s) is now being questioned in the foreclosure process.

    I’m not quite sure why the ownership tranfer was not completed with a signature stamp rather than forged signatures; when you think of the volume moving thru a transfer agent in the securitization process, it’s certainly not reasonable to expect Linda Evans to personnally sign on each and every dotted line.

    Some borrowers are claiming fraud, based upon forged signatures by the transfer agent because they choose or cannot afford to pay their mortgages and would like to stall the forreclosure process and continue to live in a house that they know does not belong to them for as long as they possibley can.

    I hope this all gets straightened out before “squatter rights” kick in, because then I’ll feel like a real sucker for paying my mortgage on time every month, according to the terms and conditions of the mortgage document.

    • jeanie

      you have alot of nerve…..we paid our mortage on time, every month, for 15 years….when 2008 came around our business slow down due to the ecomony….our business requires fuel….so with the high price of gas our fees went up….the rest is history…… house was foreclosed on illegally….we were in modification with wamu and everything was stopped…yea right…..for a year and a half i have indured physical health decling,mentally and emotional stress, financial,etc…. lawyers who don’t get husband had a slient heart attack plus other health problems due to the fraud from these banks, foreclosure attys., robo signers, etc….i have so much fraud in my foreclosure the RICO ACT is all in it……so for you to call people deadbeats, more-or-less is unfair…people have lost their jobs, health problems, and even death has happened..these banks did not try to help….instead they wanted to illegally take you property and continued to make more money…hopefully you can keep your job, not get ill. or die and leave you family strapped….shame on you

      • fred


        I sympathize with your hardship but the fact remains you did not pay your mortgage and you probably are not paying your mortgage. You knew going in that if you stopped paying your mortgage that the lender would probably forclose.

        If I was in your situation, I would try to resolve the situation quickly and get on with my life.

        • Mark

          You need to dig deeper. I contacted my mortgage “servicer” late in 2008 (after the bailout of the big banks)after using my reserves and digging into retirement savings. They told me they couldn’t help with any modification of the mortgage because I was current – I would have to be 90 days late before they could consider modification. I stopped paying, applied for a modification and the servicer immediately initiated foreclosure proceedings.

          A real bait and switch. With the paperwork and process being faulty and possibly fraudulant I’m all for holding their feet to the fire. they need to become part of the solution.

          • fred

            If it sounds too good to be true it probably isn’t. I don’t know how many free trips I’ve declined over the years.

            If I had the ability to stay current as you say you did, I don’t think I would have looked for a modification to begin with. People are different.

            It doesn’t change the fact that you stopped paying your mortgage and the non-payment is what allowed/promted the foreclosure process to commence and I assume continue.

            If I could share a story:

            As a young adult, I returned to the home of my childhood, I expected to be met by feelings of warmth and security, instead I was met with feelings of indifference; sure I had alot of good memories but I realized that it was my family and friends that provided me with my sense of warmth and security as a child not my house.

            As an adult, I’ve been through some tough times, I’ve rented and owned homes, but I’ve always remember my feelings of indifference when returning to the house of my childhood. This experience has served to remind me not to become too emotionally attached to a pile of dirt and the structure on top of it but instead to cherish the time I get to spend with family and friends.

            I realy do wish you the best, however you decide to pursue your misgivings.

    • Don

      You are an easy target here. Your articulate gibberish is a prime example of how we have lost our freedoms. What about breech of contract and rule of law? What of the suits finding in favor of the Borrower? Perhaps you view yourself as one of the elite? So glad you are not a Judge.

    • Wolfgang

      Fred is naive. What really happens is that when the borrower is told to NOT PAY for 90 days, then the credit-default-swap insurance kicks in, and the securitizer is paid 100% of the principal by the surety. Even then, the borrower is NOT in Default because the Trust is obliged to pay the investors nonetheless, who are the true lender in the transaction. When have you ever heard of a creditor telling a debtor to NOT PAY THEM? Only happens in the fantasy-land of REITs. Now what? The Note is Paid, but since the CDS insurance is non-subrogation, it is not transferred to the insurer; it sits with the Trustee. So then it gets “transferred” with an “assignment of substitute trustee” to a mill buyer, who does a phony “assignment of mortgage” and proceeds to do a foreclosure. Why? At that point anything the house gets sold off for is “free money,” to add to the pile of banker-bonus cash. That “bank” has no skin in the game, the insurer paid the Note. the premium for the insurance policy was charged to, and paid for, by the homeowner (albeit without him knowing about it).

      So, Freddy, why should some Jewish banker from New York get to add $20 million to his bonus check by selling the “free house,” instead of the borrower simply staying in his “free house?” Does Mr. Cohen have special privileges on your assets? Cohen paid himself $3.2 Billion in bonus last year. And I will tell you how this ends up: enraged homeowners will load their guns and go hunting for Wall Street scum. Just watch, folks, the shooting is going to be fierce.

    • Lauren

      Fred , You go way beyond stupidity! My momma use to say “keep your mouth shut and be thought of a fool, rather than open it and remove ALL doubt”. Think about that.

      Not everyone wants a free house. People that point that finger are people just like you.

      That being said, what do you think happened to the JOB market, when the govt. removed safeguard regulations that protected THE PEOPLE? How do you think WALL STREET and the BANKS pulled off stealing hard working American’s homes? DUH they removed folks opportunity to earn a living. Real Estate affected at least 40% of the GNP. No Real estate HUMMMM, NO JOBS! HUMMM NO INCOME? YA THINK!

      Now how interesting that all home loans in America are “insured” by the FDIC/GOVT. Do your homework and look at how Paulson, Greenspan , Bernake and now Geitner changed the legislation that use to protect the American People against this very thing. By the way those “GOOD OLE” boys also got legislation passed that protects Wall Strret and the banks by the TREASURY DEPT. insuring ALL home loans. That would be the TAXPAYERS money, not the Banks or WALL STREET.

      So it’s a simple math….Remove homeowners income, foreclose when they can’t make the payment because they don’t have their same level of income, which was caused by Wall Street and the Banks crashing the Real Estate market.

      Then such a SWEET SETUP for WALL STREET/BANKS as they get an insurance payoff (80%), buy the home at auction for $100.00 CREDIT BID (and do not have to pay cash, like the rest of us), then they sell the property which clears up the corrupt title caused by THEIR “MERS” scam and make MORE $$$$ in their pockets.

      No sir eee… No Loan Modifications for homeowners that no longer can earn their previous income. GO FIGURE who is really benefiting.

      95% of the people in foreclosure walked away. Guess they didn’t get a FREE house???

      One Million Foreclosures, and closing on another MILLION this year….. 11% of all homes in America VACANT!

      Folks who previously had excellent credit (like how do you think they got the loan?) Now have “RUINED” credit, no home and are even having a hard time renting with bad credit and no income.

      Yeah they all want a FREE home, I can see that…………..

    • Rafael

      There is more than was reported. The banks knowingly committed fraud and a slash and burn to the world economy. The banks created MERS to swindle the city county and states out of millions in real estate transfer fees. They also defrauded their investers knowing the mortage backed securites would fail. That’s why they bet on the derevetives. Besides the tax payers bought those TOXIC ASSETS, bought and paid for. Then Gaitner head of the FED. Bank sold them back to the banks at a loss to the tax payer. Now the banks want to get paid again and throw people on to the street, for a property they got paid for over and over again and then got another sweet heart deal of 10 cents on the dollar to buy them back and then ut the people on the street. Wake up America YOUR NEXT. Do you know how many people have not missed a payment and are still being foreclosed on? This is class war fare and the average american does not even know what is happening to them. The RICH do not pay their fair share and have made us to fight, amongst ourselves for what is left.

  • Jerry


    After watching 60 minutes and seeing your comments and after going through two illegal foreclosures where they could not produce a single document on one property and forged my name on the other I would like to know what the servicing organizations like Chase, B of A, etc. are doing with the funds they are collecting and don’t know who holds the mortgage?

    I have filed with the OCC, the Attorney General of CA and the DA of Ventura County.

    The bank (Chase) is back peddling a bit, but who knows. They bought the mortgages for a penny on the dollar with TARP funds. I was not offered that deal by the FDIC?

    What is more interesting during my investigation and request for documents for over 18 months including from the FDIC, it turns out the FDIC is not the Receiver for WaMu. They cut a side deal and it was a direct purchase. I was shocked when this was revealed to me by an FDIC employee, Jay Katz, who later refused to follow through as I was not supposed to know what really happened.

    Also, the FDIC exempted the takeover banks like Chase from any Borrower Liability in the takeover deals. I was settling a fraud claim with WaMu who told me to stop paying on my mortgage as part of a settlement in September 2008 and on September 25 the bank was taken over. Months later Chase’s attorney sent a letter that they had no liability only the asset.

    They then started foreclosure on the property. We stopped paying because we were told to by the bank. We chose not to make the payments as the house is sliding off the hill: 7,000 sq. ft. 3.5 Million. Builder is BK the insurance company is now claiming we have no standing as the house was foreclosed on and I lose 1.7 Million of my cash in the property.

    WaMu knew the builder was not licensed and the bank was underfunded. Look up Theresa Hagman and you will see the articles. She was fired when she told WaMu they could not make the loans on the 23 homes in this division. She filed a whistle blower lawsuit and won 1.5 Million.

  • Chris

    Hey Larry – first and foremost, thanks for all you are doing.

    I am being brutalized in court for what is obvious fraud and robo signing. Problem is, I started fighting it 3 years ago, and my state still does not quite get the message….

    Well, I have no intention on stopping.

    It would certainly be great if you would come on board with us here at the Wamu homeowners support group as the National Spokesman.

    Please consider it. And thank you again for everything you are doing!

  • Robert


    Good Day.

    Thank you for being an honest man and telling it like it is.

  • Linda

    Mr, Doyle,

    I have been involved in fraud investigation for the past 3 and half years. I was introduced to this because a scammer had forged my father’s name on quit claims in Miami, and that lead to his being named in foreclosure actions.

    I have seen the fraud in the home investment side, and then seen the foreclosure side. When I discovered securitizatuion, it was like a flood light was turned on, I knew it was the key to what was happening nationwide.

    I am just a mother and homemaker, but have become active in the search for truth and justice.

    We appreciate your concern. Please continue to help those wronged.


    • jeanie

      linda…..i can’t believe you said you do investagations… for a month and a half i have begged you for my results of you audit a how much i owe you and you don’t have the manmners to get back with me..SHAME ON YOU….

  • Maria

    Larry: We need you, I need you and I am asking that you become a spokes-person for the National WAMU Homeowners!!! As you well know, there has been gross fraud and inconsistencies appearing in courtrooms all over the USA.

    We need people like you to help us fight and I hope that you can find it in your heart to help those who need it. Please help us!

  • Liz

    My name is Liz. In 2001 a WAMU loan officer falsified my re-fi docs on what would have been my third WAMU mortgage, I turned ’em in, the loan was approved; I found out, raised hell, told Kerry K., and the re-fi went south.

    Got another loan from someone else, WAMU waltzed back into my life, and then, in 2006, tried – and damn near succeeded in – to steal my house by snookering me into foreclosure so I could be in their forbearance program.

    There is abundant robosigning and fraud in my documents, prepared by the infamous Shapiro & Fishman. I have withstood six attempted sales, judicial misconduct, my marriage tanked, I’ve sold everything I own and my life’s savings are gone.

  • Gerard

    Dear Larry Doyle,
    I just join the WAMU Homeowners Support Group . Chase never sent me the credit card terminal i prematurely signed to pay rental agreement. And while in Dubai in March 2008 to attend ArtDubai, using my Chase Business credit card at an ATM caused the account paying the rent of a machine to become insuffiecent. I never got to use as it never came, because Fed Exp doesn’t deliver to the wrong address but the US Mail does , to deliver the bills.
    i HAD GREATER FAITH IN THE BANKING INDUSTRY, LIKE MOST PEOPLE. So what happened. Was it because the banks saw the horses running faster in China, India Russia and Dubai?

  • Maria

    Dear Mr. Doyle,
    I thank you for your honest and eye opening views regarding the state of the home loan industry, mainly the banks.
    As we navigate the waters and see that what was done to the American people, I have been outraged!
    I guess it was only a matter of time before someone could figure out how to skirt the laws and rules put in place, to make a killing!
    I hope you will consider joining, the information and people who are a part of this website are truly decent, honest people! They have given me hope and made me want to correct the wrongs that have been done to all of us!

    I hope you will consider joining us and again thank you for your honesty!


    Dear Sir,

    I came to this country 30 years ago, I start washing dishes and cleaning toilet in chicago by working
    in this restaurant and parking lot, I worked 12 hrs some times 18 hrs per day, to put my self in a situation that i could finish my school(university), Here i am sitting in a house with my wife and 2 young children(future generation)
    and knowing that there is a fraud by some people who want to take our houses, I lost my job with bank of america
    due to giving some advice to our client (to seek lawyer for his problem with bank of america), I was working at the wamu as well 2003-2005 so i have some information as how we were told to bring loan in at any cost or we will lose our job, I am offering any help that i could provide, Sir, I Have a hard time to answer my children question (are we losing our home,I wish that no body be in the same situation that be forced to answer that, 3 years i tried to get some help from wamu/chase, Modification (What a joke ).

    Sir, Please help us ,as some day we will face our maker and i hope that we have a answer as how we help his children in a time of need, May god bless you and your family.

  • Peter


  • Jennifer

    We need a champion to expose the truth of this situation so that families hurt by this fraudulent run up of American real estate can claim some justice and we can level the playing ground. The homeowner can not be the only ones to pay the price for this travesty! Thank you so much for anything you can do for the National WAMU homeowners.

  • Barbara

    I am in the fight of my life over the corrupt abusive tatics of JPMorgan chase. No one should be put thru what we are going thru. Our cause is JUST and we need former insiders like you to help in our cause. I lay my head down every night to sleep praying for former and current employees to do the right thing and step forward.

    Thank you for your time,

  • LP

    OUTSTANDING interview on 60 minutes!

    I am a member of the newly attached group of The National WaMu Homeowners Support Group and every word of what transpired in that interview was “spot on”! I also happen to be an ex-WaMu Loan Consultant who never did stoop to the level of behavior in submitting loans resulting in the situation now current in the industry of those hornswoggled of their life savings and worse, their homes, due to the antics of both WaMu and JPMChase.

    I, too, have been the recipient of fraudulent practices in the act of my own home being foreclosed upon by Chase, from “soup to nuts, the following occurring:

    1. Proper notice not given of auction

    2. Robo-signing of assignment of S.T. (nationally known person in Jacksonville, FL office)

    3. Sale of property at less than 45% of JPMChase own appraisal affirmed by Loss Mitigation employees up to two days prior to sale

    4. Possible collusion of S.T. and buyer at auction in re less than required amount submitted by buyer to auctioneer at sale and sale amount

    5. I have forensic proof of fraudulent signature of S.T. on Deed and Certification of same

    6. Have proof of securitization of loan itself (sold three times, lastly to LaSalle) i.e. JPMC never had ownership nor possession of the note nor was any document found to have been assigned nor can Chase provide one;

    7. Congressional level inquiry of complaint of JPMC actions to OCC resulted in the delay of even beginning review for over two months i.e. OCC never even looked at it. JPMC was contacted by OCC and JPMC response was solely that it “was in litigation”* and therefore had no requirement to respond to complaint to O.C.C. I found this rather interesting since OCC is supposed to be telling the banks what it can and cannot do v. the other way around.

    8. I filed a copy of the complaint with the F.B.I. Mortgage Fraud Division and have met with Special Agents three times now on my own situation as well as getting them other information of use to them.

    Had I not the sources and information found been available, I would be like thousands, perhaps hundreds of thousands of foreclosed upon homeowners in the U.S. with no recourse. Its final effect however also is on my career as by being in the mortgage business, a foreclosure together with the negative credit reflected for mos. prior to then, have made my own career very “dicey” since then!

    I thought the above would let you know that someone is fighting back as an Individual as Virginia, where my beautiful home was, has been until very recently considered a state not very “interested” in fighting these big banks and their outrageous actions. Regrettably, the state legislature here is somewhat helped by banking contributions to political campaigns.

    Your commentary is phenomenal.

  • Rich

    Mr. Doyle,

    I would like to extend an invitation to you to become one of “us”. I am a member of the WaMu Homewoners Support Group and one of their National Media Committee members.

    Like so many others in my situation, I have been researching mortgages, securitization, studying court cases in looking for answers, while supporting others with information I’ve received.

    Your site is one of many that I have used information from to send to my own Attorney General, specifically the Consumer Protention Division and I thank-you for that.

    I have found fraud in my own “documents” with robo-signer, Cynthia Riley, but in the non-judicial state of Colorado, the Judges don’t do a damn thing and the law facilitates the fraud.

    My home is being sold on April 14th and while there is a ton of things for me to do until then, I still have enough time to write and ask you to become National Spokesperson.

    We need someone who knows…that they know, that “we” know the truth; what happened to our economy, how we got there…and the potential problems we will have; not only with the shadow housing market, but with lawsuits and title problems down the road.

  • Sue

    Hi Larry,

    of course they did and its about time someones begins to ask this very serious question. I’ve always said from day one that “just because their names are Soprano, Mancuso, Manzetti, doesnt mean its not illegal” and, its not just wall street , it goes much further than that.

    1. Mail and wire fraud. = when they mail you notices of defaults, et al that were filed at the county recorders office falsely in the first place

    2. Extortionate credit transactions. = the homeowner unknowlingly becomes a securtizer in an investment pool

    3. Obstruction of justice. = when they bring false documents into court as official

    4. Interference of commerce. = when they take the interest and dont pay taxes on it

    5. Laundering of monetary instruments.= yes this is mortgage laundering (where a mortgage never exsisted) = decapitation

    6. Monetary transactions in property derived from specified unlawful activities. – what do you mean here?

    7. Relating to trafficking in goods and services bearing counterfeit marks.= the trustees deed upon sale is used to create a mortgage where one does not exist

    8. Fraud in the sale of securities.= the investors do not know these securities are subprime and not perfected in the first place

  • EM

    When banks participate in fraud and forgeries in the reporting and valuation of mortgages, and those are eventually sold to other institutions as a security or hedge, then the entire process comes under the oversight of the Securities & Exchange Commission. In many cases this involves firms that are supposed to be examined by FINRA regulatory authority (formerly the NASD). FINRA and now the SEC are under the supervision of Mary Schapiro.

    So in addition to the hundreds of so-called investment advisors (Madoff and Stanford and their ilk) and the other securities firms that have stolen billions – the banks have also escaped regulator oversight.

    Then why should we grant more authority to SEC and FINRA – when we lack the courage to indict the perpetrators. Does anyone remember the phrase, “Unindicted co-conspirators?”

    Until we throw all the crooks into very nasty prisons, there will be no end to this corruption. It starts at the top and filters down. Now, a great challenge for your readers: “Please list the names of the members of the Congress, Judiciary, Executive Branch and the Regulatory agencies…..that you are certain are impeccably honest?”

    Most Americans do not need a pencil or pen – because they know so few honest leaders….

  • Donald


    Thanks for this cogent piece. I loved capitalism, too!

  • BM

    Out-f%@&king-rageous! A modern day penny stock scam.

    As can be typical, 60 Minutes raises as many/more questions than they answer.

    Help me with this one. If a bank forecloses, don’t they have to write off the loss (mark down assets) entirely? Is it not better to “mark-to-market” a non-performing loan/asset? In this environment, why the race to foreclose?

    What a country! And a President preparing to run a $1 billion re-election campaign. You know, we really are getting what we deserve.

    • LD


      In regard to the race to foreclose if the entity foreclosing, say JPM Chase, assumed the loan from Wamu for literally pennies on the dollar (that is way below market) then perhaps JPMC profited handsomely by foreclosing and selling the property.

      Can anybody else shed some insight on this?

  • Dear Mr Doyle,

    First off, I applaud you for your candid article on a subject that continues to destroy honest middle class Americans as many others turn a blind eye.

    I am another member of the The National WaMu Homeowners Support Group urging you to become a member of our group and spokesperson.

    My family life has been devastated as we once knew it as a result of predatory and fraudulent lending by WAMU . We are now being financially exploited and emotionally battered by JPM Chase.

    It has been astonishing at what Wall St has been able to get away with.
    Thank you for your insight and please consider our requests.
    This is an opportunity to save more than peoples homes.

  • Margaret

    Dear Mr. Larry Doyle,

    Please accept my personal invitation to become the spokesman for the National WAMU Homeowners Support Group.

    Please join with us at

    I thank you for your Honesty and Truth.

  • JW


    As always, you’re spot on.

    Everyone seems to know that the banks caused the original mortgage problem; that regulators let them get away with it; when the problem became too big too hide, these same regulators sought to cushion the impact on the banks rather than hold them accountable (throwing consumers/taxpayers under the bus); and now the banks are are whining that the reforms they literally asked for are too onerous — except our elected officials and federal financial regulators. They collectively lack the testicular fortitude to act.

    Now, they continue to abdicate their responsibilities to the 50 state attorneys general who were heretofore preempted by the OCC when they tried to press investigations into the anti-consumer business practices of the nation’s largest mortgage lenders.

    The CEOs of these banks should be forced to apologize publicly to the millions of Americans who lost their jobs, their homes and/or their life savings all because these bankers wanted to pretend they were casino operators.

    Add Scott Pelly’s piece to viewing the Oscar-winning documentary “Inside Job”, and reading Michael Lewis’s “The Big Short.”

    Just because the Financial Crisis Inquiry Commission wasn’t able to identify specific actions that should be taken in the wake of the worst economic disaster in the US since the Great Depression, doesn’t mean that there aren’t plenty to be considered.

    Keep up the great work. It is critically important that this nation not let this crisis pass by without something changing for the better, Too many people have paid too high a price for folks making too much money to get off scott free.

  • Joseph

    Dear Larry,
    How fast do you think the authorities would have prosecuted me if I was found to have committed forgery, et. al, against one of the banks involved?
    Answer: In the blink of an eye.
    Keep up the good work.

  • Dear Larry,

    You hit the nail on the head.

    It’s high time to break up ‘too big to fail’ banks and demand criminal investigation and criminal prosecution of banksters who defrauded this great nation and its people.

  • Rember the Hunt Brothers?

    Bernie Madoff was an amateur.

    Everyone seems to be focusing on the effect and not the cause…(not that attention isn’t needed, but don’t miss the forest for the trees)

    Carlo Ponzi would be proud!

  • Don McCoy

    Four years ago I was forced to stop paying my mortgage in order to get into a loan modification program. It became clear that the bank only wanted to foreclose. I found a buyer for my property to satisfy the loan in a short-sale and the bank ignored it to the point the buyer moved on. I found a second buyer the bank duplicated their negligence, ignored my offer and when pressed lied about the process. I then started to file through RESPA- Qualified Written Requests, and also filed bankruptcy to stave off foreclosure

    Last August 2010 I filed a law suit to challenge the bank on wrongful foreclosure-..On February 7th, 2011 Judge Alley III
    found in my favor …see… McCoy vs. BNC Mortgage in Oregon.
    It is a land mark being used in other cases.

  • Dave

    Dear Larry,

    I have been doing battle with Chase for almost 2 years now. I was led into their trap of them asking me NOT to make mtg. payments in order to qualify for a trial mod. That was in July of 2009.

    Thank You for being honest and moral in bringing the fraud and misconceptions that Chase has been pulling on the American tax paying citizen’s of this great land of ours.

    I did NOT over buy, my manager position was eliminated
    and I have been working for a third of what I used to make hence reduced income, and I honestly thought Chase was offering sincere help with my family’s predicament but as it has turned out, it has turned into an absolute nightmare.

    All I wanted was to keep a roof over my family’s heads. I didn’t want a FREE house or something for nothing.

    Sorry, I tend to get myself worked up over this!

    Anyway, PLEASE join us at the NATIONAL WAMU HOMEOWNERS SUPPORT GROUP (NWHSG). I for one, would be honored to have you as a spokesman for us.

    I knew there was a reason I shouldn’t give up/give in, it’s honest people such as yourself who give us common folk hope.

    Thank you again.

  • Kelsu

    “Exotic” LMAO! a fancy name for criminal. why aren’t these F’ers in jail yet???

    • Jim S
      This is a link to “The” expert that RICO lawyers use as an expet witness. The perps should be prosecuted. The big problem is the perps own the prosecuters! Billionaires have corrupted our government. It is clearly obvious to all the “little people” the “Rule of Law” is not being enforced. The Rule of Law does not apply to Billionaires.

      Billionaires own the politicians and the regulators and the Federal Reserve and that has become painfully obvious to the informed!

  • Pat C

    I think you can also add “Notary Fraud” to the list. Not very sexy but it is against the law.

  • Rachel

    Thank you for this story! We were first time homeowners in 2006 credit score 800. We said no to all the bad loans 40 years ARM interest only …we made improvements every year and in 2010 had to move for employment. Our realtor said we were underwater and the only way to sell was shortsale. Our bank said we were eligible for this program only if we were not current. We moved and the house didn’t sell and we couldn’t pay for rent and mortgage so in not paying became eligible. Little did we know the bank didn’t accept 4 offers never enough money for them. Now we are going to foreclosure and bank refuses a deed in lieu. We can’t get a correct appraisal so we can’t sell. I guess we made too many improvements. Now our credit will be destroyed. I got my realtor license to become educated and we were sold an inflated price form the wall street fraud. All the realtors I spoke with said anyone who bought or took out seconds during 2005 to 2007 are screwed. I am ashamed that our government helps the bank and has abandoned the homeowners who have been screwed. As first time homeowners putting thousands of dollars into a home because we thought being a homeowner was a good thing never to make money. But now our good name is ruined and the last two years has been hell with the bank and we didn’t do anything wrong. We did what they told us to do and we continue to be screwed by the bank as they make us continue to jump through hoops and missing paperwok. Our is also part of mers. Will never do any business with wells fargo or any of these big fraudelent banks. Bank with locally controlled credit unions and get our money off wall street.

  • Saylor

    It’s time to rise up against the Too Big To Fails (TBTF).

    Things we can do as individuals:

    1) Write the Attorney General of your state and ask them to pursue fraud charges against the lenders for falsifying documents used in court. Tell the AG not to let the lenders off the hook because they used an outside service.

    2) DO NOT give the TBTF lenders your banking, credit card, or mortgage business. Move your money to small, well capitalized, and ethical banks or credit unions. These small lenders tend not to churn-n-burn their employees so you will like see the same faces year after year. You can actually makes friends with the VP’s and have “real” personal banking.

    3) Tell your friends and coworkers about these unethical TBTF banks and ask them NOT to bank with them.

    Time for Americans to fight back against unchecked corporate greed! DO YOUR PART!

  • Robert B. Hall

    There is an old adage “Liars figure but figures don’t lie”

    JP Morgan Chase, a case study in Liars that figure.

    This is a story that rivals the criminal activities of Enron’s Executives (“the smartest men in the room”) with one major difference, Enron’s victims were primarily investors, whereas Chases victims are vulnerable and financially distressed Chase customers. This includes US servicemen and their families and thousands of others facing foreclosure, with chase “gaming” the Obama MHAP program to steal from, and foreclose on, seniors seeking help from the federal program designed to provide financial relief.

    Chase says it will pay more than $2 million to about 4,000 service member mortgage holders that were overcharged in interest while they were on active duty. The bank’s decision is linked to a five-year legal battle with Marine Capt. Jonathan Rowles, an F/A-18D weapons system officer who sued after the institution continued to charge him 9 or 10 percent interest on his mortgage — a violation of the Service members Civil Relief Act — and threatened to take his home. This award was a joke, it took the SC. attorney 5 years to win this award and the final admission that Chase Home Finance had made “mistakes”

    This is just the tip of the iceberg.

    This is a story that will not be welcome or embraced by politicians influenced (if not corrupted) by big banking lobbyists.

    This is a story that can change the way elected officials will level the playing field for the most vulnerable of our citizens victimized by the US banking system.

    This is a story that needs to be pursued by the institutions that are chartered to challenge the criminal activities aimed at our most vulnerable and least protected citizens.

    This is a story that should culminate in the prosecution of responsible Chase management under the “RICO Act’.

    The Racketeer Influenced and Corrupt Organizations Act (commonly referred to as RICO Act or RICO) is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization.
    Under RICO, a person who is a member of an enterprise that has committed any two of 35 crimes—27 federal crimes and 8 state crimes—within a 10-year period can be charged with racketeering. Those found guilty of racketeering can be fined up to $25,000 and sentenced to 20 years in prison per racketeering count treble damages.Despite its harsh provisions, a RICO-related charge is considered easy to prove in court, as it focuses on patterns of behavior as opposed to criminal acts.
    Although its primary intent was to deal with organized crime, Blakey said that Congress never intended it to merely apply to the Mob. He once told Time, “We don’t want one set of rules for people whose collars are blue or whose names end in vowels, and another set for those whose collars are white and have Ivy League diplomas.”
    On March 29, 1989, financier Michael Milken was indicted on 98 counts of racketeering and fraud relating to an investigation into insider trading and other offenses. Milken was accused of using a wide-ranging network of contacts to manipulate stock and bond prices. It was one of the first occasions that a RICO indictment was brought against an individual with no ties to organized crime. Milken pled guilty to six lesser offenses rather than face spending the rest of his life in prison.On September 7, 1988, Milken’s employer, Drexel Burnham Lambert, was also threatened with a RICO indictment under the legal doctrine that corporations are responsible for their employees’ crimes.
    “Experience hath shown, that even under
    the best forms of government those
    entrusted with power have, in time, and
    by slow operations, perverted it into
    – Thomas Jefferson
    Where are the “protectors’ of our most vunerable?
    Robert Barry Hall, just another victim of “Liars that figure”.

  • Robert B. Hall

    It’s really hard to understand, runaway mindless corporate greed, I mean.
    Take the recent revelation that J. P. Morgan Chase was found guilty of stealing from military servicemen and fraudulenty foreclosing on many of these military families in violation of the law.
    Now, after my two-year ordeal with Chase, I can understand why Chase would cheat me as part of my Making Home Affordable Program application process. The federal guidelines are very extensive and in some areas very complex (the NPV test for example) making them that much easier to “game”. Being a senior it’s easy to understand how Chase, now a proven financial predator, would identify my wife and I as prime financial prey and “game” the HAMP guidelines to cheat us out of a fair modification. After all, why not? In the absence of Federal, State or congressional oversight, the odds are in their favor and if you can cheat enough people there are millions to be looted. My wife and I are in our 70’s, retired and just ordinary middle class folks. Its understandable why Chase and other predators would see us as easy marks and I guess this is why Florida has many laws and statutes to protect this very vulnerable, but significant segment of the population.

    But to threaten, steal from, harass, foreclose and evict Military professionals and their vulnerable families? This is unimaginable. This outrageous, mindless corporate greed is, in my opinion, like playing Russian roulette with a round in all but one chamber! It’s like the hyena attacking a charging wounded Rhino. It boggles the mind and makes no sense, but I guess that’s a characteristic of greed-gone-mad.
    Think about it!
    Surely many of the military victims are trained combatants. Do you suppose Chase was slick enough to prey only on those without combat training? On those without sniper training, (capable of taking out the enemy at a 1000 yards)? Or those willing to accept just another “ Chase mistake” at the cost of their home? I doubt that. My age is a matter of record, but combat experience in their mortgage records? Not likely. So you have to ask yourself, what would compel such reckless criminal behavior? It is widely believed self-preservation is the strongest motivator, but in this case perhaps it is greed, but greed wrapped in impunity, behind a mountain of political donations and mortgaged political influence. Maybe they think they are safe behind that mountain, but if I were one of those responsible Chase executives I would sleep with one eye open.
    One would hope “RICO” would catch up to the responsible Chase criminals, but this is unlikely in light of the facts revealed in the award-winning documentary “An Inside Job”
    In any event, they should not be too hard to find, just look for the executive mansions or yachts always lit up every night ………

  • U before the BS

    In the spirit of racketeering,

    UBS to Pay $160 Million to Settle Muni Bid Ring Case

    How about some names? How about some real charges? How about a failure to supervise? This went on for how long? A lot longer than they are likely acknowledging.

  • mg

    Amerika in the 21st Century.

    “To the extent laws were broken, we need deterrents. If someone robs a 7-11, they took $500 and they were able to settle the next day for $50 and no admission of wrongdoing, they’d knock over that 7-11 again. And we’ve seen time after time where people and firms have made tens, one hundreds, billions of dollars. They’ve settled charges for pennies on the dollar

    “This is not some evil conspiracy of two guys sitting in a room saying we should let people create crony capitalism and steal with impunity. But their policies have created an exceptional criminogenic environment. There were no criminal referrals from the regulators. No fraud working groups. No national task force. There has been no effective punishment of the elites here.”
    -William K. Black, a professor of law at University of Missouri, Kansas City, and the federal government’s director of litigation during the savings and loan crisis.

  • Dieter

    From the Financial Times Alphaville, the court documents include the following,

    “MortgageIT took the only staff member dedicated to auditing FHA-insured mortgages and reassigned him to increase production instead; and when an outside auditor provided findings to MortgageIT revealing serious problems, those findings were literally stuffed in a closet and left unread and unopened.”


  • Paul

    Preet Bharara, US Attorney, is quoted as saying,

    It wouldn’t be a “fantastical stretch to think we are looking at other financial institutions as well,” Mr. Bharara said at a news conference, declining to be more specific.

    Maybe he could formulate a racketeering charge instead of going after these outfits one by one. Wouldn’t that be something.

  • Jim Mac

    Throw another log on the fire,

    SEC Subpoenas Credit Suisse Over Mortgages

    “Credit Suisse is now the subject of an investigation by the Securities and Exchange Commission, which issued a subpoena this week seeking the same types of documents as MBIA seeks with this motion,” the bond insurance unit of Armonk, New York-based MBIA Inc. (MBI), said in the filing in New York State Supreme Court. The document, dated April 29, was filed today.

    Steven Vames, a Credit Suisse spokesman in New York, declined to comment on MBIA’s statement about an SEC investigation. SEC spokesman John Nester declined to comment.

    U.S. investigators have been scrutinizing companies involved in the mortgage business before the worst collapse in home prices since the Great Depression.

    The Justice Department this week sued Deutsche Bank AG for more than $1 billion, saying the firm lied while arranging federal insurance on faulty mortgages.

    MBIA alleges in its case that Zurich-based Credit Suisse failed to repurchase soured mortgages out of a 2007 securitization as contractually required. That was true even as the bank obtained funds from the originators of the loans over similar demands that the lenders buy back the debt, MBIA said.

  • JPM

    More wood,

    JP Morgan Said to Face SEC Subpoena Along with Credit Suisse

    JPMorgan Chase & Co. (JPM) received a subpoena from the U.S. Securities and Exchange Commission over failed mortgages, a person familiar with the investigation said, as the agency probes banks including Credit Suisse Group AG (CS) for allegedly failing to share refunds from sellers of faulty debt.

    Credit Suisse received a subpoena from the SEC last week, bond insurer MBIA Insurance Corp. said in a filing yesterday in a lawsuit against three of that Zurich-based bank’s units. The agency asked New York-based JPMorgan for information after a court in January unsealed allegations made about Bear Stearns Cos.’ practices in another suit, said the person, who declined to be identified because the matter isn’t public.

    U.S. investigators have been scrutinizing companies involved in the mortgage business after the worst collapse in home prices since the Great Depression.

    Bond insurers MBIA and Ambac Assurance Corp. have said Credit Suisse and Bear Stearns, which JPMorgan bought in 2008, demanded refunds from originators that sold the banks the loans that they packaged into bonds, and then failed to use those settlement amounts to fulfill their own contractual promises on the debt.

    “We’re really starting to finally get into evidence that suggests blatant fraud,” said Isaac Gradman, a San Francisco- based litigation consultant and formerly a lawyer at Howard Rice Nemerovski Canady Falk & Rabkin.

  • this is the link to our new website… the last one was “stolen” and NING acted very suspiciously about getting it back to us…

    Rob Harrington
    Co-founder – NWHSG

  • dmb

    I have fraud on my deed of TRUST .. I am in Texas it is very easy to see.. and it is very easy to know who is behind this.. I have spent months doing research… Deutsche bank national Trust company told me they do note OWN MY LAND AND DO NOT HAVE MY NOTE THEY ARE TRUSTEE TO THE INVESTORS.. ONLY.. YET DEUTSCHE BANK LAWYERS WILL FORCLOSE AND ACT AS IF THEY HAVE INTEREST IN THE NOTE.. LAND..
    it is up to each state to put end to this… by asking to see the original note mortgage..
    this was a scam .. by banks .. and it did not have to be this way… there is and was a easy way to make money with out this fraud…and the borrower would had made money also.. and the banks and wall st.. and the states with taxes being paid.. on the property ect and having money the economy would have a boost..

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