“Lehman Was the Leading Purveyor of Liar’s Loans in the World” — Incidents of Fraud at 90% — “Lehman Sold This to the World”
April 23rd, 2010I also handled issues for the used-car-salesman-type ‘account executives’. Just before I left, the company switched loan origination systems. The people writing these loans were pissed because they were no longer able to get loans approved for people with fraudulent social security numbers. They would actually complain because the system was telling them that the would-be borrower was using a false/fake/invalid SSN.
“The old system never gave me these problems. How am I supposed to get any work done?! I hate this new system.”
But wait, there’s more.
As part of my daily duties, I had to take remote control of the systems that these donkeys were using. Occasionally, (a couple of times per day, at least) I would see the credit summary screens for the loan applicants. The highest credit score I ever saw was something like 615. The lowest was 520. Sprinkled with bankruptcies, unpaid credit cards, default this, late that.
Every once in a while, I’d chuckle and ask the person on the phone, “And this guy can buy a $400,000 house with no money down!?”
Absolutely God damned right!
That’s what this company did. All day. Monday through Friday.
—Life Inside a Wall Street Chop Shop, from 2006
Hint to investigators: Aurora was generating the high quality stuff! The Lehman entities that you should be looking at, if you really want a thrill, are Finance America and BNC Mortgage.
Finance America was rolled into BNC and BNC was rolled into Aurora.
With regard to Finance America, pay special attention to all of the loans that were originated with the ALE Systems software. If you’re looking for the most serious fraud, this is likely where the lowest hanging fruit are located. Somewhere, I have no idea where, there is going to be a record of manual overrides—approvals—on individual loans. Find the people who did the manual overrides (managers on the production floor in Irvine) and ask them who gave them the authority to do that. My guess is that they will have all kinds of interesting information about how that process worked. Prosecutors should be able to very easily follow the path from the base of the pyramid (that production floor in Irvine), all the way up.
Hint to everyone else reading this: Don’t hold your breath for these prosecutions to ever happen.
Have a nice day.
Via: YouTube / CSPAN:
IRS Agent Didn’t Report $41,842 in EBay Sales
April 23rd, 2010I need a Comedy category.
Via: Bloomberg:
An Internal Revenue Service agent was found liable for back taxes and penalties for not reporting income on nearly 2,000 transactions on EBay Inc., the online auction site, according to the U.S. Tax Court.
Andrea Fabiana Orellana failed to report $41,842 in income in 2004 and 2005 from sales of designer clothing, shoes and other items, according to a Tax Court summary opinion. Orellana is liable for $12,428 in unpaid taxes and $2,486 in penalties.
Orellana, who represented herself, sold items under several names, including “BlackTheRipper,” the court document said. She could not be reached for comment.
“Petitioner’s attitude toward the preparation of her tax returns appeared to be cavalier,” the U.S. Tax Court opinion said.
The IRS asked for proof of costs and expenses. Orellana, who worked as an IRS revenue officer and resided in California at the time of the IRS examination, testified that she never kept receipts, according to the court. “That would be ridiculous, unheard of. Unless there was some really bizarre reason why I kept a receipt, there were no receipts,” she said according to the court documents.
Orellana was an IRS revenue officer starting in 2001, according to the opinion. Revenue officers are responsible for collecting delinquent taxes, surveying unreported taxes and securing delinquent returns, according to an IRS job description.
Related: U.S. Government Workers Owe Government $3 Billion in Unpaid Taxes
In March, Food Prices Surged by the Most in 26 Years
April 22nd, 2010Via: AP:
Wholesale prices rose more than expected last month as food prices surged by the most in 26 years.
The Labor Department said the Producer Price Index rose by 0.7 percent in March, compared to analysts’ forecasts of a 0.4 percent rise. A rise in gas prices also helped push up the index.
Generating Megawatts Like Clockwork
April 22nd, 2010Flashback 1963: The International Passamaquoddy Tidal Power Project
Via: New York Times:
A tidal plant in Manhattan, Maine or elsewhere in the United States that would feed significant power to the grid is at least a few years away.
Goldman’s Chief Executive Visited the White House at Least Four Times
April 22nd, 2010Lots of Change to discuss?
Via: McClatchy:
While Goldman Sachs’ lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman’s chief executive visited the White House at least four times.
White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman’s political action committee, its employees and their relatives. He also met twice with Obama’s top economic adviser, Larry Summers.
No evidence has surfaced to suggest that Blankfein or any other Goldman executive raised the SEC case with the president or his aides. SEC Chairwoman Mary Schapiro said in a statement Wednesday that the SEC doesn’t coordinate enforcement actions with the White House or other political bodies.
Meanwhile, however, Goldman is retaining former Obama White House counsel Gregory Craig as a member of its legal team. In addition, when he worked as an investment banker in Chicago a decade ago, White House Chief of Staff Rahm Emanuel advised one client who also retained Goldman as an adviser on the same $8.2 billion deal.
Goldman’s connections to the White House and the Obama administration are raising eyebrows at a time when Washington and Wall Street are dueling over how to overhaul regulation of the financial world.
Lawrence Jacobs, a University of Minnesota political scientist, said that “almost everything that the White House has done has been haunted by the personnel and the money of Goldman . . . as well as the suspicion that the White House, particularly early on, was pulling its punches out of deference to Goldman and its war chest.
“There’s now kind of a magnifying glass on the administration for any sign of interference or conversations with the regulators and the judiciary,” Jacobs said.
The SEC investigation of Goldman’s dealings lasted 18 months and culminated with the SEC filing civil fraud charges against the investment bank last week.
Anybody’s Son Will Do
April 22nd, 2010Or daughter, as you’ll see if you watch the film.
Via: Counter Currents:
The film shows the process by which young men become psychologically engineered to kill or die on command. While the model used is the U.S. Marine Corps, it’s made clear that the modern techniques for creating soldiers are refined, dehumanizing and universal.
China Holds Relatives of One Child Rule Breakers Hostage
April 22nd, 2010Via: Times Online:
Doctors in southern China are working around the clock to fulfil a government goal to sterilise — by force if necessary — almost 10,000 men and women who have violated birth control policies. Family planning authorities are so determined to stop couples from producing more children than the regulations allow that they are detaining the relatives of those who resist.
About 1,300 people are being held in cramped conditions in towns across Puning county, in Guangdong Province, as officials try to put pressure on couples who have illegal children to come forward for sterilisation.
The 20-day campaign, which was launched on April 7, aims to complete 9,559 sterilisations in Puning, which, with a population of 2.24 million, is the most populous county in the province.
A doctor in Daba village said that his team was working flat out, beginning sterilisations every day at 8am and working straight through until 4am the following day.
…
Thousands of others have refused to submit and officials are continuing to detain relatives, including elderly parents, to force them to submit to surgery. Those in detention are required to listen to lectures on the rules limiting the size of families.
Flu Shots Suspended After Kids Hospitalised
April 22nd, 2010Via: ABC News:
The Western Australian Government has suspended all flu vaccinations for children under five while it investigates a spike in admissions to Princess Margaret Hospital in Perth.
The Health Minister, Kim Hames, says 45 children have been taken to hospital suffering high temperatures and febrile convulsions after receiving the vaccination.
Dr Hames says the program will be suspended until the department finishes its investigation.
He says parents who have had their children vaccinated should take precautions.
“If it’s longer than 12 hours ago then there is no risk,” he said.
“But if it’s in the last 12 hours they should make sure that they give their child paracetamol and then take every effort to make sure that the temperature of their child is settled.”
National Guard Recruiters Forged Re-Enlistment Papers
April 22nd, 2010Via: RawStory:
Washington State National Guard recruiters repeatedly forged re-enlistment papers in a desperate attempt to hold on to soldiers in the run-up to the Iraq war surge, a local news channel’s investigation has found.
In one case, a soldier found himself fighting against deployment to Iraq after re-enlistment papers with his signature on it appeared — even though he never signed any such papers, reports Chris Ingalls at KING channel 5 news in Seattle.
And in another case, a sergeant who had signed up for a one-year tour of duty was shocked to discover his enlistment papers stated he had signed up for two years.
Former soldier Michael Patrick sounded the alarm when he discovered forged re-enlistment papers with his name on them.
“Sounds crazy,” Michael Patrick told KING 5. “Sounds like something from a movie.”
The Washington National Guard soon determined that Sgt. Wendy Schaefer, a recruiter, had paid soldiers and civilians out of her own pocket to sign up recruits. She also promised the Guard would pay $1,000 for each enlistment.
According to Guard documents, Schaefer “created an environment that may have caused some of these ‘paid assistants’ to fabricate documents in order to get money.”
“The documents we received in the Patrick case do not explain how anyone would possibly think they could get away with signing over a soldier’s life,” Ingalls reported.
In another instance, Sgt. Keith Jackson says he was confronted by his superiors with enlistment papers showing he signed up for a two-year tour of duty, when he says he signed up for a one-year tour.
“I didn’t sign it,” he told KING 5. “That isn’t my signature.”
“While the Guard denies the forgery it granted Jackson an honorable discharge soon after KING 5 first told his story,” the channel reports.
In neither case has anyone in the Guard been disciplined. Sgt. Schaefer told KING 5 in an email that she left the Guard with her record intact. And the soldier who forged the signature in order to collect money from Schaefer has never been held to account either.
Research Credit: ltcolonelnemo
Goldman Sachs Hires, Gregory Craig, Barack Obama’s Former White House Counsel
April 22nd, 2010Via: Politico:
Goldman Sachs is launching an aggressive response to its political and legal challenges with an unlikely ally at its side — President Barack Obama’s former White House counsel, Gregory Craig.
The beleaguered Wall Street bank hired Craig — now in private practice at Skadden, Arps, Slate, Meagher & Flom — in recent weeks to help in navigate the halls of power in Washington, a source familiar with the firm told POLITICO.
“He is clearly an attorney of eminence and has a deep understanding of the legal process and the world of Washington,” the source said. “And those are important worlds for everybody in finance right now.”
They’re particularly important for Goldman.
On Friday, the SEC charged the firm with securities fraud in a convoluted subprime mortgage deal that took place before the collapse of the housing market. Next week, Goldman Sachs CEO Lloyd Blankfein will face questions from the Senate Permanent Subcommittee on Investigations, which is looking into the causes of the housing meltdown, the source said.
Research Credit: Druff
