Sunday, February 27, 2011

"Delusion is an Iron-clad Defense"

A prominent mortgage banker (and former employer of mine), Angelo Mozilo represents the worst of the current mortgage crisis and the fact that he escaped any prosecution for his heinous acts is disgusting.

But here, the NY Times explains why. First of two money quotes:
[T]he government doesn’t have nearly as many resources to pursue [financial crimes] cases. With the F.B.I. understandably focused on terrorism, there isn’t a lot of manpower left to dig into potential crimes that may have taken place during the financial crisis. Fewer than 150 of the bureau’s agents are assigned to mortgage fraud, for instance. Several lawyers who represent white collar defendants told me that outside of New York, there aren’t nearly enough prosecutors who understand the intricacies of financial crime and know how to prosecute it. It is a lot easier to prosecute people for old-fashioned crimes — robbery, assault, murder — than for financial crimes.
So people are skating because the government lacks the resources (and the will, it appears) to prosecute them. Second money quote:
A few days ago, I listened to a recording of a lengthy interview with Mr. Mozilo conducted by investigators working for the Financial Crisis Inquiry Commission and posted recently on the commission’s Web site. It was a remarkable performance; Mr. Mozilo expressed no regrets and no remorse. He extolled subprime loans as a way to allow lower-income Americans to get a piece of the American dream and “really build wealth” — just like people used to do during the housing bubble. He bragged that Countrywide, unlike the too-big-to-fail banks, never took a penny of government money. He said that Countrywide had helped put 25 million Americans in homes.

His voice rising passionately, he said finally, “Countrywide was one of the greatest companies in the history of this country.”

Ah, yes. "Delusion is an iron-clad defense," the author, Joe Nocera, concludes.

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