Top Justice officials connected to mortgage banks
(Reuters) – U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.
The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.
Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to the former clients.
Reuters reported in December that under Holder and Breuer, the Justice Department hasn’t brought any criminal cases against big banks or other companies involved in mortgage servicing, even though copious evidence has surfaced of apparent criminal violations in foreclosure cases.
The evidence, including records from federal and state courts and local clerks’ offices around the country, shows widespread forgery, perjury, obstruction of justice, and illegal foreclosures on the homes of thousands of active-duty military personnel.
In recent weeks the Justice Department has come under renewed pressure from members of Congress, state and local officials and homeowners’ lawyers to open a wide-ranging criminal investigation of mortgage servicers, the biggest of which have been Covington clients. So far Justice officials haven’t responded publicly to any of the requests.
While Holder and Breuer were partners at Covington, the firm’s clients included the four largest U.S. banks – Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co – as well as at least one other bank that is among the 10 largest mortgage servicers.
Countrywide Will Settle a Bias Suit
WASHINGTON — The Justice Department on Wednesday announced the largest residential fair-lending settlement in history, saying that Bank of America had agreed to pay $335 million to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers during the housing boom.
A department investigation concluded that Countrywide loan officers and brokers charged higher fees and rates to more than 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk. Countrywide also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received regular loans, it found.
Attorney General Eric H. Holder Jr. said the settlement showed that the Justice Department would “vigorously pursue those who would take advantage of certain Americans because of their race, national origin, gender or disability,” adding: “Such conduct undercuts the notion of a level playing field for all consumers. It betrays the promise of equal opportunity that is enshrined in our Constitution and our legal framework.”
The settlement is subject to approval by a federal judge in California; according to the proposed consent order filed Wednesday, Countrywide denied all of the department’s allegations.
Dan Frahm, a Bank of America… Continue reading
Criminal Prosecutions for Financial Institution Fraud Continue to Fall
Public mistrust for banks may be at an all-time high, but federal prosecution for certain financial crimes is down to a 20-year low.
The federal government is on track to file just 1,365 prosecutions for financial institution fraud in fiscal year 2011, according to a new report from a watchdog group. That would be the lowest number of such prosecutions in at least two decades.
The report, from the Transactional Records Access Clearinghouse at Syracuse University, comes at a time when the protest movement known as Occupy Wall Street has gained nationwide visibility — and no small degree of public support — by criticizing what its members see as a close relationship between big banks and the federal government.
The falling number of fraud prosecutions is striking given what many claim is a strong pattern of financial-sector misconduct in recent years, culminating in a housing crisis characterized by alleged rampant mortgage fraud and improper foreclosure, as well as the weakening of the national and global economy.
The TRAC report, which compiles Justice Department data obtained through the Freedom of Information Act, notes that 2011′s relatively low number of financial fraud prosecutions is only the continuation of… Continue reading
Eric Holder’s New Scandal: Money Laundering For Cartels
Scandal: The House committee probing government gun-running now sets it sights on possible money-laundering involving drug cartel funds run in the name of drug enforcement. Why should we believe DOJ this time?
It’s an old adage that when investigating criminal activity you should follow the money. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, has announced an investigation into a money-laundering operation allegedly run by the Drug Enforcement Administration. We may need to follow the people following the money.
Just as Fast and Furious was allegedly intended to track and interdict gun-trafficking into Mexico, this operation, detailed in a New York Times article Sunday, is said to have as its purpose to follow how criminal organizations move their money, where they keep their assets and, most important, who their leaders are.
But the question once again arises: Have the feds interrupted or aided the flow?
After a Friday document dump showing how deliberately deceptive the Department of Justice and Attorney General Eric Holder were regarding Operation Fast and Furious, the government’s gun-running operation that led to the death of Border Patrol agent Brian Terry, it’s hard to believe this latest scheme was well-run.
In a Monday letter to Holder, Issa noted that as in Fast and Furious “this same goal of dismantling Mexican drug cartels motivated the Drug Enforcement Administration in aiding and abetting these same cartels in laundering millions of dollars in cash.”
It may have produced equally tragic results. Continue reading
D.E.A. Launders Mexican Profits of Drug Cartels
WASHINGTON — Undercover American narcotics agents have laundered or smuggled millions of dollars in drug proceeds as part of Washington’s expanding role in Mexico’s fight against drug cartels, according to current and former federal law enforcement officials.
The agents, primarily with the Drug Enforcement Administration, have handled shipments of hundreds of thousands of dollars in illegal cash across borders, those officials said, to identify how criminal organizations move their money, where they keep their assets and, most important, who their leaders are.
They said agents had deposited the drug proceeds in accounts designated by traffickers, or in shell accounts set up by agents.
The officials said that while the D.E.A. conducted such operations in other countries, it began doing so in Mexico only in the past few years. The high-risk activities raise delicate questions about the agency’s effectiveness in bringing down drug kingpins, underscore diplomatic concerns about Mexican sovereignty, and blur the line between surveillance and facilitating crime. As it launders drug money, the agency often allows cartels to continue their operations over months or even years before making seizures or arrests.
Agency officials declined to publicly discuss details of their work, citing concerns about compromising their investigations. But Michael S. Vigil, a former senior agency official who is currently working for a private contracting company called Mission Essential Personnel, said, “We tried to make sure there was always close supervision of these operations so that we were accomplishing our objectives, and agents weren’t laundering money for the sake of laundering money.”
Another former agency official, who asked not to be identified speaking publicly about delicate operations, said, “My rule was that if we are going to launder money, we better show results. Otherwise, the D.E.A. could wind up being the largest money launderer in the business, and that money results in violence and deaths.”
Those are precisely the kinds of concerns members of Congress have raised about a gun-smuggling operation known as Fast and Furious, in which agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives allowed people suspected of being low-level smugglers to buy and transport guns across the border in the hope that they would lead to higher-level operatives working for Mexican cartels. After the agency lost track of hundreds of weapons, some later turned up in Mexico; two were found on the United States side of the border where an American Border Patrol agent had been shot to death.
Former D.E.A. officials rejected comparisons between letting guns and money walk away. Money, they said, poses far less of a threat to public safety. And unlike guns, it can lead more directly to the top ranks of criminal organizations.
Obama Admin Seals Records of Murdered Border Patrol Agent Implicated in Fast and Furious
And to think that Attorney General Eric Holder is getting testy about congressional calls for his resignation. After all, the Justice Department has nothing to hide, right?
The Obama Administration has abruptly sealed court records containing alarming details of how Mexican drug smugglers murdered a U.S. Border patrol agent with a gun connected to a failed federal experiment that allowed firearms to be smuggled into Mexico.
This means information will now be kept from the public as well as the media. Could this be a cover-up on the part of the “most transparent” administration in history? After all, the rifle used to kill the federal agent (Brian Terry) last December in Arizona’s Peck Canyon was part of the now infamous Operation Fast and Furious. Conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the disastrous scheme allowed guns to be smuggled into Mexico so they could eventually be traced to drug cartels.











