Sadly Black thinks there never will be any serious criminal prosecution for fraud because the FBI became captive -- as a "partner" of the Mortgage Bankers Association -- of the industry that perpetrated the frauds. The FBI was diverted into warning individuals that they would be prosecuted for fraud when in fact the fraud was systemic and originating in the very industry that the FBI was "collaborating" with. Blakc has the credentials. He is a former senior bank regulator and S&L prosecutor during the S&L crisis, and currently an Associate Professor of Economics and Law at the University of Missouri/Kansas City:
Black estimates there are as many as 500,000 cases of mortgage fraud that need to be investigated. Furthermore, such extensive mortgage fraud led to accounting fraud, which led to securities fraud at any/all publicly traded mortgage lenders. As with the FBI, the SEC was "completely ineffective" in stopping such crimes, much less investigating them now, he says.
Among the biggest mortgage lenders, IndyMac was put into FDIC receivership, Countrywide was acquired by Bank of America, Golden West was acquired by Wachovia, and WaMu was ultimately acquired by JPMorgan.
This is relevant because the government's current practice of keeping banks' senior management and boards intact (unlike, say GM's) is effectively prohibiting any investigation of possible (likely) wrongdoing at those firms.
It is for these reasons Black says the FBI's current level of 800 cases per year is "no longer symbolic prosecutions, it's shambolic prosecutions."
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