Monday, December 5, 2011

60 Minutes Exposes Specific Instances of Actionable High-Level Fraud at Citibank and Countrywide - It is being Actively Ignored

These are not-to-be-missed videos, produced by CBS. Two high-level executive whistle-blowers are interviewed. Both encountered systemic fraud, reported it, and were relieved of their duties. Both are willing to act as witnesses. Our government is refusing to pursue actionable crimes perpetrated by people who brought this country to its knees. This redefines lack of accountability.

Senior Fraud Investigator for the Financial Crisis Inquiry Commission, Tom Borgers, Found and Reported on Pervasive Fraud. It is being ignored.

On the results of Borgers' investigation: Borgers found pervasive fraud, committed across the board - by mortgage originators, underwriters, the banks, etc...

On why over 800 bank officials went to jail following the S&L crisis, yet not one has gone to jail following our more recent crisis: Investigators had considerably more "support" following the S&L crisis.

In the excellent 60 Minutes episode below, whistle-blower Eileen Foster, former Countrywide Executive VP in charge of Fraud Investigations, states that she was astounded by the systemic fraud she discovered. Fraud defined entire regions of the company. She was fired shortly before a scheduled meeting with federal regulators - and after she refused to spin her story. Countrywide subsequently offered to compensate Ms. Foster, in return for silence. She refused.

It goes on to discuss Angelo Mozilow's slap-on-the-wrist $22m fine. From 2001 to 2006 his compensation from Countrywide was $47o million.

In the segment below, Richard Bowen, former Senior Vice President and Chief Underwriter in the Consumer Lending division of Citigroup speaks to 60 Minutes. Mr. Bowen was responsible for evaluating the quality of thousands of mortgages that Citigroup was buying from Countrywide and others. In 2006, he discovered that 60% of the mortgages he evaluated were defective. His warnings, beginning in June of 2006, went to the highest levels of the Consumer Lending group. Incidence of defective mortgages proceeded to increase to in-excess of 80% through 2007. In November of 2007, Bowen sent an urgent warning letter to to the Chief Financial Officer, the Chief Risk Officer, the Chief Auditor - and to Robert Rubin, the Chairman of Citigroup's Executive Committee, and a former US Treasury Secretary. He told them that internal controls had broken down, and that the company was facing extreme risk. Chuck Prince, CEO, subsequently signed a Sarbanes Oxley certification, effectively contradicting the information in Bowen's warnings. Bowen was subsequently relieved of most of his duties and was instructed not to return to the office.

Bowen exposes flat-out fraud.

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