During Tuesday’s State of the Union address, President Barack Obama announced that a new Financial Crimes Unit we going to investigate mortgage. ABOUT FRKN TIME! According to officials at the DOJ, the unit will be tasked with looking into fraud going back at least 10 years.
Queue the rich bankers pissing on themselves and crying about the entire idea of being held accountable. JPMorgan Chase CEO Jamie Dimon told CNBC on Thursday, that this “has a pretty good chance of derailing” the settlement. JPMorgan is one of the nations largest five banks and is involved in secret negotiations with the states’ attorneys general and the Obama administration.
Personally, I hope this new unit will be strong enough to throw some cold water & sunlight onto the negotiations now taking place. We waited this far for the bastards to be held accountable, no sense in rushing it just for the election.
Of course, the banks are interested in the settlement because they believe that it will protect their sorry asses from future liability. Kind of like buying a judge. But it appears the DOJ is not concerned about the fate of the settlement talks. “We have certainly heard criticisms that the settlement would give immunity for all, but that’s simply not true …This is addressing a very different problem than the servicing settlement,” said one official.
It appears the unit will be focusing on four main legal issues:
- false statements
- mail fraud
- wire fraud
- failure to comply with the Financial Institutions Reform, Recovery and Enforcement Act of 1989
Currently, the new Financial Crimes Unit has 15 attorneys and 10 investigators, including some FBI agents. It will eventually have about 60 people, plus five co-chairs, and will include a mix of new hires & current staff from different agencies. Including the Internal Revenue Service, Consumer Financial Protection Bureau, Department of Housing and Urban Development, the Treasury Department, Federal Housing Administration and even the the Federal Housing Finance Agency; grand overseer of Fannie Mae and Freddie Mac.
HuffPo: The new unit’s co-chairs had their first call Wednesday and included staff from the office of Delaware Attorney General Beau Biden, who has resisted signing on to a settlement deal. The unit is funded through “existing resources,” according to the Justice Department officials and is part of the larger Financial Fraud Enforcement Task Force established in 2009 to investigate the roots of the 2008 financial crisis.
With representatives from more than 20 federal agencies and 94 U.S. attorneys offices, the 2009 task force has disappointed critics who argue that it has chosen to pursue relatively small fraudsters while leaving alone the major offenders, including the CEOs of banks that wrongfully foreclosed on struggling homeowners.
Eric Schneiderman, the New York attorney general, is one of the new unit’s five co-chairs. He gained prominence last year with his repeated assertions that the pending deal between the administration and the five banks would be too soft on the Wall Street behemoths, which are accused of falsifying mortgage documents and inappropriately denying loan modifications to needy homeowners. Specifically, Schneiderman has said he is worried that states would be required to drop potential legal battles against the banks in exchange for securing $25 billion in assistance for struggling homeowners.
“This new unit will hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans,” Obama said on Tuesday. I say, ‘Prove it!‘