Huffington Post Investigative Fund
The financial crisis has spawned hundreds of criminal prosecutions for alleged fraud. Yet so far, defendants have been mostly minor players such as real-estate agents, mortgage brokers, borrowers and a few low-level bank employees. No senior executives at large financial institutions face criminal charges.
That's in stark contrast to prosecutions during the savings and loan scandal two decades ago, when the government's strategy targeted and snagged some of banking's most powerful players. The approach back then succeeded in sending scores of S&L executives to prison, as well as junk-bond king Michael Milken and business tycoon Charles Keating Jr.
One explanation for the difference may be that key bank regulators -- who did the detective work during the S&L crisis and sent more than 1,000 criminal referrals to prosecutors -- have this time left reporting fraud up to the banks themselves.
Spokesmen for two chief regulators, the Comptroller of the Currency and the Office of Thrift Supervision, say that they have not sent prosecutors a single case for criminal prosecution.
An OTS spokesman said the agency, much like the banks themselves, does not see much evidence of criminal fraud inside the financial institutions. The spokesman, Bill Ruberry, citing the agency's enforcement director, said, "There may be some isolated cases, but certainly there's no widespread patterns."
That surprises William K. Black, a former OTS official who helped coordinate criminal investigations during the S&L crisis.
"Dear God," Black said when told bank regulators haven't made any criminal referrals. "Not a single one?"
Black sees many signs the the government is less aggressive than during the S&L era -- and could result in more bad behavior.
"This crisis was not bad luck," he said. "It was done to us. When you bring those convictions, you hope that at least for a while to deter."
Banks have reported massive amounts of fraud to the Treasury Department but have not held themselves -- or their top executives -- responsible, instead pinning blame on borrowers, independent mortgage brokers, and others.
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Just remember we have laws in this country to protect society from the "bad people". For example:
In New Jersey, Once Convicted Of Drunk Driving You May Never Again Have Personalized Plates
In Michigan, Anyone Over Age 12 May Own A Hand Gun As Long As He/She Has Not Committed A Felony
Congress remains deadlocked on financial reform so pillaging and plundering on Wall Street remains an acceptable act. Remember kids, these are professionals so do not try this at home.
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