Fannie Mae-No Politics (FNMA)

[955]

Here’s a guide to some of the key players of the 2008 Financial Crisis. Where are these players today? Why have they stopped in their efforts to expose the fraud? Has their mission changed? What could possibly be more important than their duty to our country for which they were hired? Do they really think they are going to escape justice?


Preet Bharara Former U.S Attorney for the Southern District of New York
2009 to 2017
Under Bharara’s supervision, the office brought several insider trading cases to court and collected millions of dollars in civil fines from banks like CitiMortgage and Bank of America for fraud relating to the financial crisis. Bharara declined our interview request.
PHOTO: Drew Angerer/Getty Images


Lanny Breuer Former Assistant Attorney General for the Criminal Division of the U.S Justice Department
2009 to 2013
Before his appointment at the Department of Justice, Breuer worked for Covington & Burling, a white-shoe law firm in Washington, D.C. — along with Eric Holder Jr. He didn’t respond to multiple interview requests for this story.
PHOTO: Ramin Talaie/Getty Images


Eric Holder Jr. Former Attorney General of the United States
2009 to 2015
In 1999, when Holder was deputy attorney general in the Clinton administration, he wrote a memorandum titled “Bringing Criminal Charges Against Corporations.” The memo states that prosecutors should take “collateral consequences” into account when “conducting an investigation, determining whether to bring charges, and negotiating plea agreements.” The memo got more attention after the 2008 financial crisis when it became clear that big bank executives would not face criminal prosecution. He declined our request for an interview, but in 2016, Holder told CNN, “We simply didn't have the proof. If we could've made those cases, we certainly would've brought them. These would've been career-defining cases for assistant U.S. attorneys.”
PHOTO: Tim Sloan/AFP/Getty Images


Angelo Mozilo Former CEO and co-founder of Countrywide Financial
By 2006, Countrywide was one of the largest mortgage lenders in the United States. Countrywide was a Wall Street superstar, and Mozilo was seen as one of the most innovative financial executives out there. Eventually, Countrywide found itself at the center of the subprime mortgage meltdown. It nearly collapsed into bankruptcy as its financing dried up, and Bank of America agreed to buy Countrywide for $4.1 billion in January 2008. Mozilo didn’t respond to our interview request. In an interview with the Wall Street Journal from 2018, Mozilo stated that neither subprime mortgages nor Countrywide were the primary causes of the financial crisis.
PHOTO: Brendan Smialowski/AFP/Getty Images


Phil Angelides Chairman of the Financial Crisis Inquiry Commission
The Financial Crisis Inquiry Commission was created by Congress and the White House in 2009 to investigate the causes of the financial crisis. According to Angelides, the commission sent 11 separate criminal referrals — recommendations to investigate or prosecute — involving multiple high-level executives and companies to the Justice Department.
PHOTO: courtesy of Phil Angelides

“It is one of, I think, the very disappointing legacies of the financial crisis. The simple fact is the Department of Justice never mobilized the resources to thoroughly investigate the wrongdoing that occurred in the runup to the financial crisis. And having failed to investigate, and never then applied the resources and the will to prosecute — it remains an enigma to me.”


William Black Criminologist and Associate Professor of Economics and Law, University of Missouri, Kansas City
Black worked as a banking regulator and helped bring about hundreds of convictions after the savings and loan crisis of the 1980s and early 1990s. Before the savings and loan crisis, the Justice Department and bank regulators did not have a coherent system for letting prosecutors know about possible criminal misconduct in the banking industry. So the Justice Department and the Federal Home Loan Bank Board, where Black worked, created a uniform system called Suspicious Activity Report, also known as “criminal referrals.”
PHOTO: Courtesy of William Black

“We, just one agency, made over 30,000 criminal referrals [in the savings and loan crisis]. … All the federal agencies combined in the Great Financial Crisis, the 2008 financial crisis, made fewer than a dozen criminal referrals.”


Ilene Jaroslaw Former Assistant U.S Attorney for the Eastern District of New York
Ilene Jaroslaw worked on the prosecution of two Bear Stearns hedge fund managers who were acquitted. It’s one of the only cases of high-level banking executives going to trial for their roles in the financial crisis.
PHOTO: Courtesy of Ilene Jaroslaw

“An acquittal says that at least one or more of the jurors were not convinced beyond a reasonable doubt. That's a very heavy burden, and it's a burden that we embraced in the U.S. attorney's office for the Eastern District of New York, and it's a burden that we weren't afraid of.”


Paul Pelletier Former senior prosecutor in the U.S Justice Department Criminal Division’s Fraud Section
Pelletier worked as a federal prosecutor for 27 years. During the Justice Department’s crackdown on Enron executives, he was acting chief of the Criminal Division’s fraud section. In the wake of the financial crisis, he became frustrated by lack of action from the Justice Department’s leadership and left the agency.
PHOTO: Courtesy of Paul Pelletier

“People didn't get prosecuted during the financial crisis or high level executives simply because of a lack of commitment, competence, and courage by the political leaders in the Department of Justice. That's what I observed. That's what I saw. That's what I felt. And that's why I left the Department of Justice.”


Michael Winston Former executive at Countrywide Financial
Winston became a whistleblower while at Countrywide Financial, one of the companies at the center of the subprime mortgage meltdown. He was discharged from the company after its acquisition by Bank of America in 2008.
PHOTO: William J. Emilio Flores (for the New York Times)

“I co-founded a group called Bank Whistleblowers United. And we're still trying to — we keep showing evidence of not just civic fraud... No one wants to hear it.”

https://features.marketplace.org/why-no-ceo-went-jail-after-financial-crisis/