Block on Trump's Asylum Ban Upheld by Supreme Court
One of the most infuriating things about the 2008 subprime mortgage crisis and subsequent collapse of the economy was the absolute lack of accountability. Banks and big businesses were bailed out, nearly nobody was charged with crimes, and the executives who caused the whole mess continued on with massive salaries -- especially Jamie Dimon, who received a 74 percent raise after JPMorgan Chase agreed to a $13 billion (on paper) settlement with the government.
Now, with the settlement booked, and the statutes of limitations nearing their end dates, Alayne Fleischmann, the lawyer who was the key witness used to leverage the settlement, has come forward in a Rolling Stone feature, hoping that it will pressure the Justice Department to prosecute those responsible -- those who allegedly intentionally packaged and mislabeled junk subprime mortgages before selling them to investors.
Fleischmann claims there were repeated signs that the bank knew it was peddling junk securities.
In 2006, she claims that a superior told her to stop sending emails about mortgage deals. (Good call. E-discovery is a real pain when you're doing illegal things.) She also claims that she told one of her superiors that high-risk securities, consisting of mortgages with obviously overstated incomes and high probabilities of default, were being packaged and sold as low-risk securities. They pressed forward anyway, and pressured any objectors to go along.
Finally, in 2007, she sent a letter to William Buell, an even higher higher-up, outlining the issues with the faulty securities. She said they called her "The Howler," a reference to the screaming "Harry Potter" character. They pressed forward anyway, and laid her off in 2008.
One would think that, with a credible lawyer-insider as a witness, that executives would be hauled away in handcuffs.
And yet, nothing. Nothing except a $13 billion settlement that wasn't worth $13 billion at all. As the Rolling Stone article points out, millions of that total were covered by assistance from the loan owners to the defaulting homeowners that would have happened anyway -- it shouldn't cost the bank much, if anything at all. And because of the way the settlement was worded, some $7 billion of it was a tax write-off.
Fleischmann said that she was contacted repeatedly for investigations that were later dropped. According to Fleishmann, the Rolling Stone, and other news reports, Dimon personally called Associate Attorney General Tony West, the third-ranking official in the Justice Department, and negotiated the $13 billion settlement.
And though the settlement only released Chase from civil liability, leaving the possibility of criminal charges open, she says that the investigation appears to be going nowhere.
Matt Taibbi, the author of the Rolling Stone piece, suggests that part of the deal might have been an implicit agreement not to actively pursue criminal charges, and to let the statute of limitations clock run out. He calls Holder "the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up," and blames him for the DOJ's inaction.
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