Once again, a major bank has admitted to deceiving the American government. Once again, nobody gets arrested. Last week Wells Fargo & Co admitted to “deceiving”the American government (is it deception when both parties are in fact colluding to deceive a third party- the taxpayer?) for almost a decade. It “admits, acknowledges, and accepts responsibility” for, from 2001 to 2008, falsely certifying that many of its home loans qualified for Federal Housing Administration insurance, essentially “tricking” the US government into taking all the downside risk for thousands of mortgages that would eventually collapse.
Between 2002 and 2010, the bank also did not file timely reports on thousands of badly underwritten loans or loans that had material defects.
The Justice Department notes that these discrepancies have caused the taxpayer to foot substantial insurance claims when the loans were defaulted on, in the financial crisis.
Bank of America Corp, Citigroup Inc, Deutsche Bank AG and JPMorgan Chase & Co were all able to get away with financial terrorism by paying off the US government.
Wells Fargo’s slap on the wrist, however, was the largest in FHA history for loan origination violations – a 1.2 billion dollar settlement.
The amount still pales in comparison to the 36 billion dollar bailout it received from the US taxpayer though.
Basically, if banks deceive us and use our money to back risky bets that they and their shareholders solely profit from, expect to both pay for those bad bets, the CEO’s outrageous excesses, and then some if things head south. Never mind the lack of jail time, we’re practically funding them to sell us a lie.
Reuters expresses it best:
No one has been criminally charged in the probes, and the Justice Department reserved the right to pursue criminal charges if it wishes, according to the settlement.
In short, the “Justice” Department made the deliberate choice not to pursue criminal charges.
Some people are relieved.
The settlement also resolved claims against former Wells Fargo vice president Kurt Lofrano who was in charge of the thousands of defective badly underwritten loans. This is the guy, by the way, who was accused by the US government to have played a “critical role“ in helping the bank hide fraudulent home loans that cost the taxpayer 189 million dollars.
“A big fish is too big to fry. A small fish gets thrown back into the scum pond to fatten up.” – The U.S. Govt.
Back in 2013, Wells Fargo had stated that it was “very disappointed that the government is seeking to add Mr Lofrano as a defendant” and that he was a ‘‘well-respected team member.”
It needn’t have worried; his “critical role” made him too critical to prosecute.
Franklin Codel, president of Wells Fargo Home Lending, said that the settlement “allows us to put the legal process behind us, and to focus our resources and energy on what we do best — serving the needs of the nation’s homeowners.”
No. Comment.
Sources: The Free Thought Project, Reuters, Rolling Stone, WSJ
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