Wednesday, May 4, 2011

Bank Fraud

This just irks me a little bit. Seems a German-based bank is being charged by the U.S. DOJ for defrauding taxpayers. The Deutsche bank has defrauded taxpayers out of millions, dumped faulty mortgages on the U.S. department of Housing and Urban Development which then had to pay out millions to those who own the mortgage debt when a third of those 39,000 mortgages defaulted, and made off with huge profits on the sale. Now, the DOJ is bringing charges against them and suing for $1 billion, more than double the HUD department had to pay out to cover the defaults.

The interesting thing in all of this is that, despite the large numbers we're talking about, this is just one bank, a foreign-owned one at that, that is part of the problem. This is a symptom of the "scapegoat mentality" that the DOJ has for Wall St. and the private sector. Consider Bernie Madoff, the man who embezzled billions from Wall St. This is one man who, supposedly on his own, took huge amounts of money without anyone noticing. He was indicted and sent to prison, but only had to pay a fraction of the money he took. How many banks, lenders, and investors are responsible for the economic crisis? How many of those received bailouts and continued wild speculation with taxpayer dollars? How many have been sued by the DOJ?

But the blind eye of the DOJ is nothing new. When the computer security firm HB Gary Federal was nabbed for promoting illegal operations against the hacker group Anonymous for its support of WikiLeaks, the DOJ did nothing because HB Gary is one of their contracted firms. HB provides the department with computer security programs and has been contracted for special jobs with them before. When WikiLeaks posted confidential information that had been leaked from the government, the DOJ was all over it. When HB was caught planning the same thing, there was silence.

The government continues to protect the best interests of big banks and business, and conceals the misdeeds of Wall St. speculators. In industries where the only commodity is wealth, the only thing that holds back the profits are regulations. We have loopholes left and right that allow these banks like Deutsche to cash in on things like mortgage fraud while passing the costs of maintaining those sub-prime mortgages to the government. Yet, despite the fraud and abuse of the system, only a handful of selected firms, and sometimes individuals, are indicted and made public enemies by the government and media. It's as if there are only a few bad apples rather than a broken system. We need to close the loopholes, force Wall St. and banks to assume more realistic practices that don't jeopardize the stability of our entire economy or the livelihood of individual Americans.

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