Showing posts with label fraud. Show all posts
Showing posts with label fraud. Show all posts

Tuesday, April 27, 2010

Naming Names: A Baker's Dozen of Financial Rogues

Late last week, in the penultimate edition of Bill Moyer's Journal (which ends forever this week) the best journalist in television interviewed Prof. William K. Black. Refreshingly, Prof. Black names names while discussing who should bear responsibility for bringing the world to the edge of financial collapse during the waning days of the Bush Administration.

It's a crowded, bi-partisan recitation of rogues, sociopaths, and bureaucratic nitwits. The list includes --
  1. Federal regulators who did everything they could to subvert prudential financial regulations;
  2. Alan Greenspan and other directors of the Federal Reserve;
  3. Mortgage loan brokers who deliberately wrote and then palmed off on others "liar's loans;"
  4. Corporate banking executives who fired whistle-blowers and promoted cheats and con-men;
  5. Accountants who deliberately failed to call out liar's loans for fear of losing customers;
  6. "Pathogenic" employee pay policies that rewarded fraud while punishing honesty;
  7. Timothy Geithner, former head of the influential New York FED during the Bush Administration and now Obama's U.S. Treasury Secretary;
  8. Bush appointees (former) SEC chairman Cris Cox and FED chairman Ben Bernanke;
  9. The giant blood-sucking "vampire squid" known as Goldman Sachs;
  10. "Top" Goldman Sachs executives from CEO Lloyd Blankfein on down the corporate chain of command;
  11. The entire "Bush wrecking crew" of anti-regulation regulators who remain to this day embedded in the federal bureaucracy;
  12. Goldman Sachs alum Robert Rubin's many "protégés" whom President Obama has named to virtually every choke-point in the financial regulatory system; and
  13. As a bonus, the extremist ideologues in Academia and on the bench who teach and write that Wall Street doesn't need and shouldn't enforce anti-fraud laws because the system is "self-cleansing." Really. They teach that to young business students.
Undoubtedly, this is only a partial list. Prof. Black didn't even mention former Texas senator Phil (Mr. Enron") Gramm, or Wall Street's bond-rating agencies, or all of the Senators and Congressmen who voted to abolish Glass-Steagall. These self-dealing gamblers all played a major part in bringing about the near-collapse of the American economy, too.

The televised interview can be seen here. A written transcript is here.

Friday, April 16, 2010

Suicide Alert!

Are U.S. Senate Republicans feeling suicidal? Steve Benen's latest report suggests they need some intervention to protect them from themselves: "As of this afternoon, it appears Republicans are prepared to link arms and take their chances, fighting to protect Wall Street from accountability."

Politicians High On Plastic

Republican Talk: "The GOP long known to be the party of millionaires and suckers, now seems -- Well, it seems that every week, it seems to be becoming the party of a staff and its leaders, who live large, high on the hog, and a party for suckers." More here.

Saturday, January 24, 2009

Schrenker Embraces the Fish Monger's Defense

National news services report today that Indiana stock broker Marcus Schrenker is claiming amnesia. Schrenker is the financial advisor accused of bilking hundreds of thousands of dollars from customers and then crashing his private plane near Milton in a bizarre scheme to fake his own death.
Marcus Schrenker called The New York Post from the Escambia County Jail on Wednesday night and Thursday night and told the newspaper that he has no memory of the events of Jan. 11.
* * *
"I have no memory of any of it — not going to the airport, being in the air, nothing," the newspaper quoted him as saying.
The reason Schenker is in our midst is that he has been indicted by a Pensacola federal grand jury on charges related to sending a "false distress message." That's nothing, of course, compared to his legal problems back home in Indiana:
Investigators there compiled evidence and collected testimony that Schrenker had misappropriated hundreds of thousands of dollars in clients' money, forged client signatures and obtained licenses to sell insurance in several states, apparently in an effort to avoid prosecution.
The thing is, we have Schrenker here; they don't have him there.

His claim "not to recall the events of the day he bailed out" is an all-too-familiar defense in Pensacola. Frank Patti, the locally prominent fish monger, made a similarly preposterous claim when he crashed his vehicle at slow-mo speed into the historic locomotive on display along Garden Street six years ago, shortly after he was indicted on multi-million dollar tax evasion charges.

Never thought we'd say this: Frank Patti isn't the biggest dumbbell in Pensacola. At least his absurd claim of amnesia conveniently stretched back in time to the very same day he signed the first in a string of incriminating checks and documents.

Schrenker, according to news reports, only claims to have blanked out the day he went flying. That would mean he must still remember how he cheated all those customers of his.

Here's our medical prognosis: Shrenker's amnesia will get worse. As soon as he learns more details about the Frank Patti defense, and how gently Frank was treated after his conviction, the stock broker's memory will get worse -- all the way back to the first time he defrauded a customer.

Monday, January 12, 2009

May Day, May Day

That Hoosier stockbroker who radioed a distress call Monday and then put his plane down east of Milton turns out to be another fraudulent stockbroker on the run.

Marcus Schrenker, age 38, of Indianapolis has disappeared. The head of "Heritage Wealth Management" initially was feared hurt or dead from a mechanical failure of his airplane.
According to the police in Santa Rosa County in the Florida Panhandle, where the plane went down, Mr. Schrenker turned up safely about 220 miles north of there. And there is evidence that Mr. Schrenker was an experienced pilot who might have been trying to fake his own death. His life seemed to be unraveling. Court records show that Mr. Schrenker’s wife filed for divorce on Dec. 30. A Maryland court recently issued a judgment of more than $500,000 against one of three Indiana companies registered in his name — and all three are being investigated for securities fraud by the Indiana Secretary of State’s Office, a spokesman, Jim Gavin, said.
After the police kindly gave him a lift to a motel, he disappeared "into the woods" again. He was last known to be "wet from the knees down," wearing "a black toboggan cap," and carrying "what the police described as 'goggles that looked like they were made for flying.' "

Of course, that could have changed by now. But you can recognize him, we're pretty sure, by the planeload of cash he's carrying with him.

When the history of our era is written, stock brokers deservedly will rank as low as the "mostly coarse, brutal" knights of the fourteenth century, whose "chief passion, besides warfare and excessive drinking, was the unrestricted satisfaction of their sexual desires."

Substitute "money" for "sex" and you have a perfect picture of Wall Street at the opening of the 21st century.

Wednesday, October 15, 2008

Confession of Voter Fraud

We want to confess. After several decades on the run and keeping our mouth shut, this silly and distracting Acorn voter registration nonsense has shamed us into coming clean at long last.

We are ready to admit our guilt and take our punishment. We once aided and abetted the casting of a real vote by a real person who never was allowed by law to vote.

It all happened "a long time ago in a galaxy Midwestern state far, far away...." We were still in our teens, and under the prevailing law of that time far too young to vote. But not too young to drive a car or volunteer as a campaign grunt -- which we had done once before in the year John Kennedy was elected president. That's how they got our name.

One dismal winter day a year or so later, the call came in from Democratic Party state headquarters. It was an emergency. The incumbent state senator in a lightly-populated rural county somewhere west of where we lived, in the middle of the state, had died. Two candidates, one from each party, were running in a special election to fill his seat. Voting was scheduled to take place the very next day and the Democratic candidate needed help driving people to the polls. Could we arrange among our high school friends for a few drivers with cars?

We could and we did. What we didn't realize at the time, being young and stupid, was why he needed help. A massive blizzard was expected the very next day. Funny, how adults pay attention to stuff like that and callow young people do not.

We encountered the blizzard the next morning when we were about half way along the hundred-mile drive to the rural county where the special election was being held. The pig-gray sky darkened quickly and huge sheets of wet snow with flakes the size of dinner plates began to fall. Visibility dropped to near zero. Highway traffic slowed to a crawl.

Undaunted, our modest caravan of four or five jalopies stuck together, bumper to bumper, and arrived at the county seat only four hours late. There, we found the Democratic candidate holed up, alone and shivering, in a small, cramped office that did double duty as a law office and an insurance agency.

There were no lights or heat. The power had gone out. On the candidate's desk were propped two cheap triangular cardboard signs. "A lawyer's time is his stock in trade," read one of them, the wisdom improbably attributed to Abraham Lincoln. "You're in good hands with Allstate," pronounced the other -- another deception, as we were to personally learn a lifetime later in Florida after experiencing our first hurricane.

In the cold, cramped, gloomy surroundings the candidate handed out handwritten lists of names and addresses of voters he thought would be on his side.

"There's about sixty names to a sheet," he said. "In this weather, that ought to be enough to put me over the top."

Many of the addresses were unusable by us -- "R.R. 2" or "half a mile past the Harman farm." So, another hour was spent blowing warmth into our fists to keep our fingers nimble while we grilled the candidate for better directions. By the time we were ready to fire up the engines and start hauling voters to the poll -- there was only one poll, inside the courthouse that stood sentry over the town square -- two feet of thick, wet snow blanketed the landscape, and more was falling.

The going was very slow. All in all, we managed to find only three or four dozen voters from the lists. Less than half of them had the bad sense to venture out with us. A majority, gazing out at the weather through frosted-glass storm doors, simply lied and claimed they had already voted. We cheerfully accepted their lies and skittled back as fast as we could to the warmth of our idling autos.

There was one very elderly woman, however, who was thrilled to have a ride. She was not an inch above five feet tall, heavy-set, and already bundled in a winter coat, scarf, and woolen gloves when we arrived at her home just outside the town limits. She brushed aside an arm as we tried to safely steer her along the icy steps to our waiting '56 Chrysler -- the one with the gearshift on the dash, aimed like a knife at the chest of everyone in the front seat. We took care to bundle her into the back seat.

"I bink votink in Amedica fur sexty yass," she said defiantly. "No leetle snow lak this gonna kip me avay from da polls."

The tank-heavy Chrysler crawled and slipped and slithered through snow-filled streets as we made our way to courthouse. Again, the old woman refused to lean on an arm as we mounted the courthouse steps.

Inside, a large, stoic woman with a mound of white hair piled on her head sat behind a flimsy card table. Her chin and mouth was hunched inside a double-thick turtleneck sweater. On the table was a sheaf of papers stapled together.

"Mrs. ____!" the poll worker greeted the old woman we had brought in. She quickly rifled through the voter registration papers in front of her. "I don't see your name here," she said.

"I bink votink in Amedica fur --"

"I know, I know, Mrs. ____." the poll worker interrupted. She handed the short ballot to our would-be voter. "Here you go, dear."

While the old woman voted, we asked the poll worker if she was sure the old woman's name was not on the registration papers.

She waved a hand at us. "Oh, don't worry none about that. Lots a' folks around here are from the old country. They don't much like to register their names. Makes 'em feel like the government's spying on 'em. We don't worry about it, anyway. We know who they are. They're neighbors."

Driving our charge back to her house through the worsening storm, we had to ask. Had she ever registered to vote?

"Vy vut I do dat?" she hurrumphed. "Day know me here. Anyvays, I dunt vant to be a citizen, needer. I just vant to vote."

It didn't take long for the election results to be tabulated. The Democratic candidate, the lawyer -slash- insurance salesman, lost in a landslide. Altogether, less than 200 votes had been cast and he got about 50.

"It wasn't a landslide," another campaign worker joked. "More like an avalanche."

"Should have been better," we replied. "That lawyer's list wasn't any good."

On the way home, the old woman's words kept echoing in our mind. "Yah, I bink votink in Amedica fur sexty yass. Sexty yass! Always fur da Republican, y'know. Thass me. Republican."

The ACORN Distraction

The attacks on ACORN for alleged voter registration "fraud" are, indeed, "nutty" as Think Progress noted yesterday. Rachel Maddow thoroughly dissected it last night on MSNBC (see video above).

Yesterday, too, Gannett News Service's Ana Radelat ran a fairly well balanced Q-and-A on the artificially manufactured controversy. (It's reprinted in today's dead tree PNJ, but not on-line).

Among other things, Radelat correctly observes that "most states require those conducting voter-registration drives to turn in all forms, even if they know they are fakes." ACORN pays low-income people to register other low-income people, and some of them cheat by signing up "Mickey Mouse" and other phony names.

"The problem plagues many voter registration groups," Radelet reports. "Among those accused of submitting false registrations is one that targets single women called Women’s Voices, Women Vote."

But the real money quote in all of this is based on the all-important distinction between so-called "voter registration fraud" and actual "vote fraud":

Q. Can voter registration fraud affect an election?

A: State voting officials screen out most duplicate registrations and those containing false names or incomplete information.

A 2005 study from the League of Women Voters and the Coalition on Homelessness and Housing in Ohio found that only four of about 9 million votes cast in the state from 2002 to 2004 were fraudulent.

Four out of 9 million votes? Our calculator can't handle that small a fraction but we're pretty sure it's written 4.444 × 10-7 . That's another seven zeros. Each of us has a better chance of winning the Florida lottery.

Friday, September 05, 2008

Family Matters

We realize we aren't supposed to drag family matters into the presidential campaign unless it's to the everlasting credit of a Republican candidate, so let's all hail John McCain's son, Andrew, for having the perspicacity to quit Silver State Bank's board of directors for "personal reasons" just nine weeks before it collapsed.

Today

FDIC Press Release, Sept. 6, 2008: "Silver State Bank, Henderson, Nevada, was closed today by the Nevada Financial Institutions Division, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver."
Two Months Ago

Las Vegas Sun, July 27, 2008: Andrew McCain resigned from the Silver State Bancorp of Henderson and Silver State Bank boards for "personal reasons," the Las Vegas Review-Journal reported Sunday... .

Tuesday, December 18, 2007

The Bad Bush Brother

Neil Bush has always been considered the "bad" Bush brother. Now it looks like he wasn't the only one.

Even Forbes Magazine, hardly a Bush-bashing fish-wrapper, wants to know "Where Was Jeb?"

Jeb Bush Shagged Florida

Atrios has what looks very much like the goods on Jeb Bush, courtesy of Bloomberg News:
What Stipanovich, 58, hadn't told his boss, Florida Chief Financial Officer Alex Sink, was that Lehman Brothers was the same firm that had sold the state fund $842 million of mortgage- backed debt in July and August. Those securities defaulted within four months, and totaled more failing debt than any other bank sold the state, Florida records show. "At the time, I never knew it was Lehman Brothers that actually sold us these investments,'' Sink says.

Sink also was unaware that former Florida Governor Jeb Bush, who incorporated Jeb Bush & Associates in February 2007, a month after completing his second term, had been hired as a consultant to Lehman Brothers in June. Bush is the brother of President George W. Bush.
* * *
"Lehman and the other big players in the market decided they didn't like this stuff in their own accounts,'' Sink says. "Where did they drop it and who did they dump it to? It looks questionable to me.''

Joseph Mason, a former U.S. Treasury official and now a finance professor at Drexel University in Philadelphia, says Wall Street had few takers for its subprime-tainted debt. "When they couldn't sell it to more-sophisticated investors, they found less-sophisticated investors like local government investment pools,'' he says.
More from the Bloomberg article:
Stipanovich, who ran the State Board of Administration which manages $184 billion, was hired in 2000. Two of his three personal references came from then-Governor Bush's top aides.

"An outstanding individual capable of significant contributions to the board,'' Sally Bradshaw, Bush's chief of staff, wrote about Stipanovich.
* * *
On June 14, Bear Stearns announced it would liquidate two of its hedge funds, holding more than $4 billion in assets, because their subprime holdings were collapsing. * * *

At about the same time, Bush and his new company won a consulting contract from Lehman Brothers, according to Lehman spokesman Randall Whitestone, who declined to say how much Bush is being paid.
* * *
On July 2, Lehman Brothers sold Lombardi $250 million of one-month commercial paper from a structured finance company called KKR Atlantic Funding Trust yielding 5.37 percent, state records show. KKR Atlantic was rated A-1+ by Standard & Poor's and Prime-1 by Moody's.

It matured, and on Aug. 2, Lehman Brothers sold Lombardi $200 million of one-month KKR Atlantic paper yielding 5.53 percent. It was downgraded to default by Fitch Ratings on Oct. 8, and Not Prime, or junk, by Moody's on Oct. 29.

From July 3 to July 9, Lehman Brothers sold the pool $153 million of commercial paper from another structured finance company called Ottimo Funding yielding 5.36-5.38 percent.

Lehman Brothers spokeswoman Cohen says there's no link between Bush and Lehman's sale of debt to Florida. "Bush is a member of the Lehman Brothers private equity advisory board and his company has been retained by the firm for consulting and advisory services,'' she says. The former governor declined to comment.
* * *
Craig Holman, of Washington-based nonprofit public interest group Public Citizen, disputes Lehman Brothers' view. "That defies credibility,'' says Holman, who lobbies for ethics in government. "It's a clear conflict of interest. Bush is a consultant to the company selling bad investments to the same agency on which he served as a trustee until January.''

It's past time for Mr. Jeb Bush to disclose the details of his contract with Lehman Brothers.

DEPT. OF AMPLIFICATION