U.S. Accuses S.&P. of Fraud in Suit on Loan Bundles

The offices of Standard & Poor’s in New York.

Πηγή: Dealbook
By ANDREW ROSS SORKIN AND MARY WILLIAMS WALSH
Feb 3 2013

The Justice Department late Monday filed civil fraud charges against the nation’s largest credit-ratings agency, Standard & Poor’s, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.

The suit, filed in federal court in Los Angeles, is the first significant federal action against the ratings industry, which during the boom years reaped record profits as it bestowed gilt-edged ratings on complex bundles of home loans that quickly went sour. The high ratings made many investments appear safer than they actually were, and are now seen as having contributed to a crisis that brought the financial system and the broader economy to its knees.

More than a dozen state prosecutors are expected to join the federal suit, and the New York attorney general is preparing a separate action. The Securities and Exchange Commission has also been investigating possible wrongdoing at S.& P.

From September 2004 through October 2007, S.&P. “knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors” in certain mortgage-related securities, according to the suit filed against the agency and its parent company, McGraw-Hill Companies. S.&P. also falsely represented that its ratings “were objective, independent, uninfluenced by any conflicts of interest,” the suit said.

S.& P., which was first contacted by federal enforcement officials three years ago, said in a statement earlier Monday in anticipation of the suit that it had acted in good faith when it issued the ratings.

“A D.O.J. lawsuit would be entirely without factual or legal merit,” it said, adding that its competitors had given exactly the same ratings to all the securities it believed to be in question.

Settlement talks between S.& P. and the Justice Department broke down in the last two weeks after prosecutors sought a penalty in excess of $1 billion and insisted that the company admit wrongdoing, several people with knowledge of the talks said. That amount would wipe out the profits of McGraw-Hill for an entire year. S.& P. had proposed a settlement of around $100 million, the people said.

S.& P. also sought a deal that would allow it to neither admit nor deny guilt; the government pressed for an admission of guilt to at least one count of fraud, said the people. S.& P. told prosecutors it could not admit guilt without exposing itself to liability in a multitude of civil cases.

It was unclear whether state and federal authorities were looking at the other two major ratings agencies, Moody’s Investors Service and Fitch.

A spokesman for Moody’s declined to comment. A spokesman for Fitch, Daniel J. Noonan, said the agency could not comment on an action that appeared to focus on Standard & Poor’s, but added, “we have no reason to believe Fitch is a target of any such action.”

The case against S.& P. is said to focus on about 30 collateralized debt obligations, or C.D.O.’s, an exotic type of security made up of bundles of mortgage bonds, which in turn were composed of individual home loans. The securities were created at the height of the housing boom. S.& P. was paid fees of about $13 million for rating them.

Prosecutors, according to the people briefed on the discussions, have uncovered troves of e-mails written by S.& P. employees, which the government considers damaging. The firm gave the government more than 20 million pages of e-mails as part of its investigation, the people with knowledge of the process said.

Since the financial crisis in 2008, the ratings agencies’ business practices have been widely criticized and questions have been raised as to whether independent analysis was corrupted by Wall Street’s push for profits.

A Senate investigation made public in 2010 found that S.& P. and Moody’s used inaccurate rating models from 2004 to 2007 that failed to predict how high-risk residential mortgages would perform; allowed competitive pressures to affect their ratings; and failed to reassess past ratings after improving their models in 2006.

The companies failed to assign adequate staff to examine new and exotic investments, and neglected to take mortgage fraud, lax underwriting and “unsustainable home price appreciation” into account in their models, the inquiry found.

“Rating agencies continue to create an even bigger monster — the C.D.O. market,” one S.& P. employee wrote in an internal e-mail in December 2006. “Let’s hope we are all wealthy and retired by the time this house of card falters.”

Another S.& P. employee wrote in an instant message the next April, according to the Senate report: “We rate every deal. It could be structured by cows and we would rate it.”

The three major ratings agencies are typically paid by the issuers of the securities they rate — in this case, the banks that had packaged the mortgage-backed securities and wanted to market them. The investors who would buy the securities were not involved in the process but depended on the rating agencies’ assessments.

Although the three agencies tend to track one another, each has its own statistical methods for assessing the likelihood of a bond default. That has led to speculation that S.& P. analysts knew their method yielded unrealistic ratings, but issued the ratings anyway.

In its statement on Monday, S.& P. said it had begun stress-testing the mortgage-backed securities it rated as early as 2005, trying to see how they would perform in a severe market downturn. S.& P. said it had also sent out early warning signals, downgrading hundreds of mortgage-backed securities, starting in 2006. Nor was it the only one to have underestimated the coming crisis, it said — even the Federal Reserve’s open market committee believed at the time that any problems within the housing sector could be contained.

The Justice Department, the company said, “would be wrong in contending that S.& P. ratings were motivated by commercial considerations and not issued in good faith.”

For many years, the ratings agencies have defended themselves successfully in civil litigation by saying their ratings were independent opinions, protected by the First Amendment, which guarantees the right to free speech. Developments in the wake of the financial crisis have raised questions about the agencies’ independence however. For example, one federal judge, Shira A. Scheindlin, ruled in 2009 that the First Amendment did not apply in a lawsuit over ratings issued by S.& P. and Moody’s, because the mortgage-backed securities at issue had not been offered to the public at large. Judge Scheindlin also agreed with the plaintiffs, who argued the ratings were not opinions, but misrepresentations, possibly the result of fraud or negligence.

The federal action will be the first time a credit-rating agency has been charged under a 1989 law intended to protect taxpayers from frauds involving federally insured financial institutions, which since the financial crisis has been used against a number of federally insured banks, including Wells Fargo, Bank of America and Citigroup.

The government is taking a novel approach in this instance by accusing S.& P. of defrauding a federally insured institution and therefore injuring the taxpayer.

The government is expected to cite the demise of Wescorp, a federally insured credit union in Los Angeles that went bankrupt after investing in mortgage securities rated by S.& P. Wescorp will be showcased as an example of the contended fraud, and as a way to bring the case in California, people with knowledge of the proceedings said. The suit was filed in Federal District Court fore the Central District of California.

By bringing a civil suit, as opposed to a criminal case, the Justice Department’s burden of proof will be less, perhaps lowering the bar for a successful prosecution.

Banking on Criminality: Drug Money and the Above-the-Law Global Banking Cartel

HSBC executives testify at U.S. Senate (photo courtesy of The Guardian, 17 June 2012)

Πηγή: Boiling Frogs
By Andrew Gavin Marshal
Dec 14 2012

In what the New York Times declared as a “dark day for the rule of law” on December 11, 2012, HSBC, the world’s second largest bank, failed to be indicted for extensive criminal activities in laundering money to and from regimes under sanctions, Mexican drug cartels, and terrorist organizations (including al-Qaeda). While admitting culpability, and with guilt assured, state and federal authorities in the United States decided not to indict the bank “over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.” Instead, HSBC agreed to pay a $1.92 billion settlement.

The fear was that an indictment would be a “death sentence” for HSBC. The U.S. Justice Department, which was prosecuting the case, was told by the U.S. Treasury Department and the Federal Reserve that taking such an “aggressive stance” against HSBC could have negative effects upon the economy. Instead, the bank was to forfeit $1.2 billion and pay $700 million in fines on top of that for violating the Bank Secrecy Act and the Trading with the Enemy Act. In a statement, HSBC’s CEO stated, “We accept responsibility for our past mistakes… We are committed to protecting the integrity of the global financial system. To this end, we will continue to work closely with governments and regulators around the world.” With more than $7 billion in Mexican drug cartel money laundered through HSBC alone, the fine amounts to a slap on the wrist, no more than a cost-benefit analysis of doing business: if the ‘cost’ of laundering billions in drug money is less than the ‘benefit,’ the policy will continue.

As part of the settlement, not one banker at HSBC was to be charged in the case. The New York Times acknowledged that, “the government has bought into the notion that too big to fail is too big to jail.” HSBC joins a list of some of the world’s other largest banks in paying fines for criminal activities, including Credit Suisse, Lloyds, ABN Amro and ING, among others. The U.S. Assistant Attorney General Lanny A. Breuer referred to the settlement as an example of HSBC “being held accountable for stunning failures of oversight.” Lanny Breuer, who heads the Justice Department’s criminal division, which was responsible for prosecuting the case against HSBC, was previously a partner at a law firm (along with the U.S. Attorney General Eric Holder) where they represented a number of major banks and other conglomerates in cases dealing with foreclosure fraud. While Breuer and Holder were partners at Covington & Burling, the firm represented notable clients such as Bank of America, Citigroup, JP Morgan Chase and Wells Fargo, among others. It seems that at the Justice Department, they continue to have the same job: protecting the major banks from being persecuted for criminal behavior.

With a great deal of focus on the $1.9 billion in fines being paid out by HSBC, little mention was made of the fact that HSBC had roughly $2.5 trillion in assets, and earned $22 billion in profits in 2011. But not to worry, HSBC’s executive said that they “accept responsibility for our past mistakes,” and added: “We have said we are profoundly sorry for them, and we do so again.” So not only did the executives of the world’s second largest bank apologize for laundering billions in drug money (along with other crimes), but they apologized… again. Thus, they pay a comparably small fine and face no criminal charges. I wonder if a crack dealer from a ghetto in the United States could avoid criminal prosecution if he were to apologize not once, but twice. Actually, we don’t have to wonder. In May of 2012, as HSBC executives were testifying before the U.S. Senate in Washington D.C., admitting their role in drug money laundering, a poor black man was convicted of peddling 5.5 grams of crack cocaine just across the river from the U.S. Capitol building, and he was given 10 years in prison.

Back in August the bank stated that they had put aside $700 million to pay fines for illegal activities, which conveniently was the exact amount they were fined by the U.S. Justice Department (not including the forfeiture of profits). Lanny Breuer declared the settlement to be “a very just, very real and very powerful result.” Indeed, one could agree that the results are “powerful” and “very real,” in that they provide a legal state-sanctioned decision that big banks will not be persecuted for their vast criminal activities, precisely because they are big banks. The “very real” result of this is that we can guarantee that such criminal behaviour will continue, since the banks will continue to be protected by the state. With news of the settlement, HSBC’s market share price rose by 2.8%, a clear sign that “financial markets” also reward criminal behaviour and the “pervasively polluted” culture at HSBC (in the words of the U.S. Senate report).

Jack Blum, a Washington attorney and former special counsel for the Senate Foreign Relations Committee who specializes in money laundering and financial crimes stated that, “If these people aren’t prosecuted, who will be?” He further asked: “What do you have to do to be prosecuted? They have crossed every bright line in bank compliance. When is there an offense that’s bad enough for a big bank to be prosecuted?” But the Justice Department’s Lanny Breuer explained that his department had to consider “the collateral consequences” of prosecutions: “If you prosecute one of the largest banks in the world, do you risk that people will lose their jobs, other financial institutions and other parties will leave the bank, and there will be some kind of event in the world economy?”

In other words, the U.S. Justice Department decided that big banks are above the law, because if they weren’t, there would be severe consequences for the financial system. And this is not just good news for HSBC, the “favourite” bank of Mexican drug cartels (according to Bloomberg), but it’s good news for all banks. After all, HSBC is not the only bank engaged in laundering drug money and other illegal activities. Back in 2010, Wachovia (now part of Wells Fargo) paid roughly $160 million in fines for laundering some $378.4 billion in drug money. Drug money has also been found to be laundered through other major financial institutions, including Bank of America, Banco Santander, Citigroup, and the banking branch of American Express. Nearly all of the world’s largest banks have been or are currently being investigated for other crimes, including rigging interest rates (in what’s known as the Libor scandal), and other forms of fraud. Among the banks being investigated for criminal activity by U.S. prosecutors are Barclays, Deutsche Bank, Citigroup, JP Morgan Chase, Royal Bank of Scotland, UBS, Bank of America, Bank of Tokyo Mitsubishi, Credit Suisse, Lloyds, Rabobank, Royal Bank of Canada, and Société Générale, among others. Regulators and investigators of the Libor scandal – “the biggest financial scandal ever” – report that the world’s largest banks engage in “organized fraud” and function like a “cartel” or “mafia.”

The pervasive criminality of this “international cartel” is so consistent that one commentator with theGuardian has referred to global banks as “the financial services wing of the drug cartels.” But indeed, where could be a better place for drug cartels to deposit their profits than with a financial cartel? And why would banks give up their pivotal role in the global drug trade? While the pharmaceutical drug industry records annual revenues in the hundreds of billions of dollars (which is nothing to ignore), the global trade in illicit drugs, according to the United Nations Office on Drugs and Crime, amounted to roughly 2.3-5.5% of global GDP, around $2.1 trillion (U.S.) in 2009. That same year, the same United Nations office reported that billions of dollars in drug money saved the major global banks during the financial crisis, as “the only liquid investment capital” pouring into banks. Roughly $325 billion in drug money was absorbed by the financial system in 2009. It is in the interest of banks to continue profiting off of the global drug trade, and now they have been given a full green light by the Obama administration to continue.

Welcome to the world of financial criminality, the “international cartel” of drug money banks and their political protectors. These banks not only launder billions in drug money, finance terrorists and commit massive fraud, but they create massive financial and economic crises, and then our governments give them trillions of dollars in bailouts, again rewarding them for creating crises and committing criminal acts. On top of that, we, the people, are handed the bill for the bailouts and have to pay for them through reduced standards of living by being punished into poverty through ‘austerity measures’ and have our labour, resources, and societies exploited through ‘structural reform’ policies. These criminal banks dominate the global economy, and dictate policies to national political oligarchies. Their greed, power, and parasitic nature knows no bounds.

The fact that the Justice Department refused to prosecute HSBC because of the effects it could have on the financial system should be a clear sign that the financial system does not function for the benefit of people and society as a whole, and thus, that it needs to be dramatically changed, cartels need to be destroyed, banks broken up, criminal behavior punished (not rewarded), and that people should dictate the policies of society, not a small network of international criminal cartel banks.

But then, that would be rational, so naturally it’s not even up for discussion.

# # # #

For a more detailed analysis of the criminal activities of the “international cartel” of banks, which scientists have referred to as a “super-entity”, see: “The Global Banking ‘Super-Entity’ Drug Cartel: The “Free Market” of Finance Capital.”

Too Big To Jail: Wall Street Executives Unlikely To Face Criminal Charges, Source Says

New York Attorney General Eric Schneiderman, accompanied by Attorney General Eric Holder, speaks at the Justice Department in Washington, Friday, Jan. 27, 2012, after Holder announced the formation of the Residential Mortgage-Backed Securities Working Group.

Πηγή: Huffington Post
By Ben Hallman
Sept 9 2012

A last-ditch effort by federal and state law enforcement authorities to hold Wall Street accountable for nearly bringing down the U.S. economy is unlikely to lead to any criminal charges against big bank executives, according to a source close to the investigation.

Barring a "hail mary pass," said the source, who spoke on the condition of anonymity because the investigation is still ongoing, the members of a task force President Barack Obama formed in January to investigate fraud in the residential mortgage bond industry will instead most likely bring civil lawsuits against some of the banks involved, though it isn't clear when these cases might come.

That means any penalties for those accused of fraud or other misconduct would be measured in dollars, not jail terms.

A spokesman for New York Attorney General Eric Schneiderman, a co-head of the task force and the driving force behind its formation, declined to comment.

Adora Andy, a Department of Justice spokeswoman, said in a statement that "all appropriate remedies, civil and criminal, are on the table."

"As always, if working group members uncover evidence of fraud or other illegal conduct, we will pursue such conduct aggressively," Andy said.

The subprime mortgage bubble popped more than five years ago, triggering a full-fledged economic meltdown. Since then, the question confronting regulators and government prosecutors has been whether the banks that drove the market's expansion simply made terrible business decisions, or committed fraud in order to reap short-term profits.

The Securities and Exchange Commission, in a number of civil lawsuits, has alleged the latter (as a regulatory agency, the SEC cannot bring criminal suits). But with the exception of one failed case against Bear Stearns in 2009, the Department of Justice, which historically would lead any criminal effort, has declined to criminally prosecute those who created the financial instruments built out of toxic mortgage loans.

By pooling investigative resources, it was hoped that the Justice Department, the SEC and a handful of state attorneys general, led by Schneiderman, could accomplish what the agencies had mostly failed to deliver on their own: a sense of justice, however fuzzily defined.

But from the start, the task force -- officially, the Residential Mortgage-Backed Securities Working Group -- has been dogged by critics questioning the seriousness of the effort, and by concerns that the legal timeframe in which investigators must bring cases is coming to a close.

Civil cases, if and when they are filed, could lead to large financial penalties and possibly aid for struggling homeowners. Yet it seems unlikely that such a result will satisfy those whose anger sparked the Occupy Wall Street movement, or even many middle-class Americans who may wonder how, in contrast to other financial crises, this one could end with none of the people who seemingly helped orchestrate it behind bars.

"Without accountability, the unending parade of megabank scandals will inevitably continue," Neil Barofsky, the former watchdog over the $700 billion bank bailout fund and a frequent critic of the Obama administration's response to the financial crisis, recently told The Huffington Post.

How and why the government chose this path will be the subject of debate for years to come. Some say prosecutors lacked resources. Others assert that the complexity of the financial transactions makes it virtually impossible to prove criminal intent in court, where prosecutors must convince a jury of guilt "beyond a reasonable doubt." In a civil action, by contrast, the bar is lower: jurors need only conclude that "a preponderance of evidence" indicates guilt.

One former prosecutor said a simpler human dimension may also be preventing government lawyers from filing criminal charges: the basic fear of losing a big case.

"Losing has a chilling effect, because no one wants to take a spin like that and come out on the short end," said Cliff Stricklin, a former prosecutor who worked on the Enron task force and also successfully prosecuted Qwest Communications chief executive Joseph Nacchio for accounting fraud. (Nacchio is currently serving a seven-year sentence in a federal prison.)

"[Losing a case] makes you wonder if there was indeed a crime, and if so, how you go about proving it," Stricklin said. "It is a signal to the public that either the government is jumping to conclusions or isn't competent."

CATASTROPHE OR CRIME?

Mary Jo White, a former U.S. attorney for the Southern District of New York, adheres mostly to the view that the financial crisis was a catastrophe, but not a crime. Now a prominent defense attorney at the law firm Debevoise & Plimpton, White said she thinks calls from some quarters for more criminal prosecutions are unwarranted.

"The financial crisis was so expensive and so many people were injured that one's instinct is to think that there must have been massive wrongdoing from the top on down," she said.

But criminal cases must be built on compelling evidence, not suppositions, and evidence of broad-based misconduct that would rise to that level doesn't exist, White said.

"I don't think the criticism is fair," White said.

William Black, a law professor at the University of Missouri-Kansas City and a prominent former bank regulator, is in the camp that thinks prosecutors have missed a massive opportunity.

"They don't get the whole concept of looting," he said.

Black, who worked with prosecutors to develop some of the 1,100 criminal cases that emerged from the Savings & Loan crisis of the late 1980s and early 1990s, said that Wall Street accounting fraud flows from a simple recipe: grow by buying high-interest loans, leverage the business by borrowing lots of money and keep next to nothing in reserve against losses.

"You are mathematically guaranteed to report record profits," he said.

But those profits are based on a fiction, he said, one that costs investors when the bank collapses -- and in some cases, can cost taxpayers too.

Financial firms like Goldman Sachs profited tremendously by purchasing loans described widely in the industry as "liar's loans," Black said. These loans were made without the borrower having to prove income, or even that he or she had a job.

"It makes no sense that an honest lender would ever make liar's loans," he said. Nor does it make sense that a sophisticated bank like Goldman, which runs an entire business based on the ability to calculate risk, would purchase such dangerous loans without knowing that they were toxic, he said.

Indeed, the Financial Crisis Inquiry Commission produced evidence last year which suggests that Goldman Sachs traders knew these investments were more dangerous than they were letting on to their customers. Internally, they characterized offerings as "junk" and "monstrosities" even as they offloaded the mortgage bonds onto investors, according to the report.

The SEC came to the same conclusion when investigating whether the bank had misled investors about a product known as Abacus. That probe led to a $550 million settlement in 2010.

The SEC has won $2.2 billion in penalties stemming from financial crisis-related cases, though it has been dogged by complaints -- most notably from federal judge Jed Rakoff -- that its fines are too small and that it doesn't target individuals often enough. An SEC spokesman declined comment.

Still, the agency's efforts to pursue financial crisis fraud far outstrip those of the Justice Department.

The government's lone criminal case related to the creation of complex mortgage investments came in 2009, when a federal jury declined to convict two former Bear Stearns hedge fund managers accused of lying to investors about the soundness of the securities they were selling.

Last month, the Justice Department announced that it had dropped a probe of Goldman Sachs, launched after the Senate’s Permanent Subcommittee on Investigations found that the bank sold investments "in ways that created conflicts of interest with the firm’s clients and at times led to the bank's profiting from the same products that caused substantial losses for its clients.”

There was "not a viable basis" to bring criminal charges against the bank or its employees, the Justice Department said in a statement explaining its decision.

LAST CHANCE FOR PROSECUTORS

Obama's multi-agency mortgage task force was supposed to succeed where previous investigations had failed.

"This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans," Obama said in his State of the Union address in January.

The goal of the new unit was to drill down into the sophisticated financial instruments the banks created to package and sell mortgages in a search for fraud. But the group was met with skepticism from many legal experts, who wondered how this effort would be any different from previous investigations.

The group got off to a rocky start. Three months after its formation, it had failed even to secure office space. In May, Schneiderman told the Wall Street Journal that he wanted more resources and wished that investigators at his partner agencies would pick up the pace.

According to the Justice Department, the investigation is now in full swing.

More than 200 investigators are on the job, "devoting significant resources to investigate and prosecute misconduct by financial institutions in the origination and securitization of mortgages," the agency said in a statement.

The DOJ has issued 30 civil subpoenas in the past four months, it said, and the SEC has issued more than 300 -- though that number includes pre-existing investigations.

The New York attorney general's office, HuffPost previously reported, is now investigating several major institutions.

But if none of these cases yield a criminal indictment, who, if anyone, is to blame?

Schneiderman, though he never promised criminal cases, is likely to attract some criticism for the lack of prosecutions due to his aggressive advocacy for the task force. Last year, Schneiderman led an insurgency against a robo-signing settlement shaping up between state attorneys general and five large banks. His goal, he said, was to preserve his ability to continue an investigation he had opened in the spring into possible fraud that led to the housing bubble and crash.

The states leading the negotiations dispute that Schneiderman's ability to continue his investigation was ever in doubt. Nevertheless, his initial opposition to what became a $25 billion deal led directly to the creation of the task force

Schneiderman co-leads the task force, along with Robert Khuzami, the enforcement director of the SEC; Lanny Breuer, the head of the criminal division at the Justice Department; Stuart Delery, the head of Justice's civil division; and John Walsh, the U.S. Attorney for the District of Colorado.

Though each of these entities are sharing documents and resources, it is up to the individual agencies to file charges.

The biggest challenge for Schneiderman, who took office in January 2011, was the ticking clock. Most mortgage bonds were packaged and sold in 2006 or earlier, and the statute of of limitations on most types of fraud cases is five years from the commission of the alleged wrongdoing.

It is possible to extract "tolling" agreements from a business or individual under investigation that effectively extends the allotted time in which to bring a case, in exchange for more lenient treatment. But Schneiderman would have had to enact tolling agreements in very short order after taking office. It isn't clear whether a bank or an individual would accept such an agreement in a criminal case if they knew the statute of limitations was about to run out.

It is also true that while the New York attorney general's office has the authority to bring criminal fraud cases, it historically almost never does. Like the SEC, the office instead typically files lawsuits with the expectation of wringing a settlement -- and political bragging points -- out of a Wall Street firm. It's part of the recipe that both Andrew Cuomo and Eliot Spitzer used to pave their way to a governorship.

Instead, the attorney general's office typically defers to the Department of Justice, which has a large team of experts parked in the U.S. attorney's office just a few blocks away in lower Manhattan. But instead of taking on Wall Street's top executives, that office has focused on alternate cases -- such as the recent prosecution of hedge fund king Raj Rajaratnam, who was convicted of insider trading.

Stricklin, now in private practice at the Bryan Cave law firm in Denver, said that he doesn't know whether there was criminal conduct in the run-up to the financial crisis.

"The truth is more complicated than can be explained in sound bites," he said.

But he has seen, he said, a decline in the talent level of those working white-collar cases at agencies like the Federal Bureau of Investigation and the Justice Department, which over the past decade have diverted some of the most talented people over to counterterrorism.

"The government needs to decide if it is really going to tackle white-collar crime or not, and if so it needs to allocate resources," he said.

Otherwise, the result will be fewer cases, and more losses, Stricklin said.

"It always matters to bring solid criminal cases where you are holding people accountable," he said. "But the worst signal is not to do nothing, but to do something partway."

Why Goldman Sachs, Other Wall Street Titans Are Not Being Prosecuted

Protesters hold signs during a demonstration outside the Goldman Sachs San Francisco headquarters in San Francisco, July 31, 2012.

Πηγή: The Daily Beast
By Peter Schweizer
August 14 2012

The Justice Department's decision not to prosecute Goldman Sachs in a financial-fraud probe is another sign of the cronyism that has kept Attorney General Eric Holder from taking action against other big Wall Street firms, says Peter Schweizer.

On Thursday the Department of Justice announced it will not prosecute Goldman Sachs or any of its employees in a financial-fraud probe.

The news is likely to raise the ire of the political left and right, both of which have highlighted one of the most inconvenient facts of Attorney General Eric Holder’s Justice Department: despite the Obama administration’s promises to clean up Wall Street in the wake of America’s worst financial crisis, there hasnot been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

Why is that? In a word: cronyism.

Take Goldman Sachs, for example. Thursday’s announcement that there will be no prosecutions should hardly come as a surprise. In 2008, Goldman Sachs employees were among Barack Obama’s top campaign contributors, giving a combined $1,013,091. Eric Holder’s former law firm, Covington & Burling, also counts Goldman Sachs as one of its clients. Furthermore, in April 2011, when the Senate Permanent Subcommittee on Investigations issued a scathing report detailing Goldman’s suspicious Abacus deal, several Goldman executives and their families began flooding Obama campaign coffers with donations, some giving the maximum $35,800.

That’s not to say Holder’s Justice Department hasn’t gone after any financial fraudsters. But the individuals the DOJ’s “Financial Fraud Enforcement Task Force” has placed in its prosecutorial crosshairs seem shockingly small compared with the Wall Street titans the Obama administration promised to bring to justice.

Consider the following small-time operators as listed on the Financial Fraud Enforcement Task Force website:

• “Three Connecticut Women Charged with Overseeing ‘Gifting Tables’ Pyramid Scheme.” Three women in their 50s and 60s were indicted for conspiracy, tax, and wire-fraud charges. “These arrests should send a strong message to all who threaten the financial health of our communities,” one federal agent declared.

• In March, 2012, the DOJ sent a property appraiser in Washington, D.C., to the slammer for 65 months for fraudulently inflated prices in a scheme to “flip” properties. The scheme was a small-time $1 million operation, a sharp contrast with the billions on Wall Street.

• The DOJ’s “get tough” on financial crime strategy included sending two health-care software company executives to the clink for 13 and 15 years.

• A Florida resident was charged and sentenced to 14 months in federal prison for falsifying documents, thereby resulting in the obstruction of an SEC investigation.

• Five people in California were charged with bid-rigging foreclosure auctions. The individuals have been charged with violating the Sherman Act and could face up to 10 years in jail.

• Federal officials went after 10 people in Las Vegas because they tried to “fraudulently gain control of condominium homeowners’ associations in the Las Vegas area so that the HAOs would direct business to a certain law firm and construction company.”

• The owner of a Miami company got 46 months in prison for creating fake loan applications.

• Four people in Tacoma, Wash., were indicted for conspiracy that caused a small bank to fail. Their crime: making false statements on loan applications and to HUD.

To be sure, financial fraud of any kind is wrong and should be prosecuted. But locking up “pygmies” is hardly the kind of financial-fraud crackdown Americans expected in the wake of the largest financial crisis in U.S. history. Increasingly, there appear to be two sets of rules: one for the average citizen, and another for the connected cronies who rule the inside game.

That could be changing, as critiques of Eric Holder’s lack of financial prosecutions have now come from the political left and right; indeed, battling cronyism may represent one of the rare points of common ground in today’s fractious political environment. As progressive Richard Eskow of the Huffington Post recently wrote: “More and more Washington insiders are asking a question that was considered off-limits in the nation's capital just a few months ago: Who, exactly, is Attorney General Eric Holder representing? As scandal after scandal erupts on Wall Street, involving everything from global lending manipulation to cocaine and prostitution, more and more people are worrying about Holder's seeming inaction—or worse—in the face of mounting evidence.”

Will bipartisan outrage boost the decibels in D.C. loud enough for Holder to hear and heed? We’ll see. He’s got at least three months to get moving.

Peter Schweizer is the president of the Government Accountability Institute and the William J. Casey Fellow at the Hoover Institution at Stanford University. In 2008-09 he served as a consultant to the White House Office of Presidential Speechwriting and he is a former consultant to NBC News. He has written for The New York Times, The Wall Street Journal, Los Angeles Times, USA Today, National Review, Foreign Affairs, and elsewhere. His new book is Throw Them All Out.

Levin: Decision not to prosecute Goldman Sachs shows weakness

Chairman of the Senate Permanent Subcommittee on Investigations, Sen. Carl Levin, speaks during a hearing in July.

Πηγή: Chicago Tribune
By Reuters
August 10 2012

The U.S. Justice Department's decision not to prosecute Goldman Sachs Group Inc for its subprime mortgage trades resulted from either "weak laws or weak enforcement," the senator who asked for a criminal investigation of the firm said on Friday.

A day after the department announced its decision, Democratic Senator Carl Levin reiterated in a written statement the criticisms he lodged against Goldman beginning more than two years ago. He called the firm's actions "deceptive and immoral."

Goldman said it did nothing wrong in its marketing of mortgage securities, including one known as Abacus that was the subject of televised hearings before Levin's investigative subcommittee in 2010. The hearings focused on whether Goldman was wrong to sell products that it disparaged internally.

Levin said he is still convinced Goldman was in the wrong.

"It misled investors by claiming its interests in those securities werem 'aligned' with theirs while at the same time it was betting heavily against those same securities, and therefore against its own clients, to its own substantial profit," he said on Friday.

Goldman settled a related civil investigation by the U.S. Securities and Exchange Commission for $550 million in July 2010 without admitting wrongdoing.

In April 2011, Levin asked for a criminal probe on the day that he and Republican Senator Tom Coburn released a 639-page report on the financial crisis.

The unsigned Justice Department statement on Thursday on its decision not to prosecute said that "the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time."

A Goldman spokesman reacted on Thursday with a brief email: "We are pleased that this matter is behind us."

To critics, the department's decision was another example of the inability of prosecutors to pinpoint blame for a financial crisis that pushed the United States into a severe recession from which the economy is still recovering only slowly.

Levin said the 2010 banking and Wall Street regulation overhaul known as Dodd-Frank is part of a solution if regulators "do not water it down" and "enforce those rules with vigor."

N.Y. Fed quiet on Barclays’ admission of rigging Libor

In 2010, London-based Barclays paid a $298 million settlement to the U.S. government for violating sanctions on dealing with Iran, Cuba and other countries. Barclays was listed as the most complained-about bank in the last six months of 2011, according to the Financial Services Authority. In February 2012 it was caught in a tax avoidance scheme and forced to pay back $785 million to the British government.

Πηγή: OpEdNews
By Jia Lynn Yang and Danielle Douglas (Washington Post)
July 24 2012

Treasury Secretary Timothy F. Geithner has said that he sounded the alarm four years ago to regulators about problems with the benchmark interest rate known as Libor.

But Geithner, who was then head of the Federal Reserve Bank of New York, did not communicate in key meetings with top regulators that British bank Barclays had admitted to Fed staffers that it was rigging Libor, according to people familiar with the matter.

Instead, regulators at the Commodity Futures Trading Commission and the Justice Department worked largely without the Fed’s help to build a case against Barclays. That work has culminated in a massive scandal rocking the banking industry on both sides of the Atlantic.

As Geithner prepares to testify Wednesday morning on Capitol Hill, he returns to a familiar position as a lightning rod for critics on the left and the right who find fault in his work as a banking regulator before he joined the White House and as a bailout architect under President Obama.

He will face a key question from House and Senate members this week: Did he and others at the New York Fed, the country’s most powerful banking regulator, act urgently enough to stop fraud at Barclays and potentially other banks?

Geithner has said the New York Fed did everything in its power.

“We moved quite quickly to try to get the British to address it and make sure that we brought it to the attention of the full complement of U.S. regulatory agencies so that they could take a careful look at it, which they did,” Geithner said Monday night on Charlie Rose’s interview show. “And to their credit, they’ve done a pretty strong enforcement action right now, but there’s more work to do on this.”

Focus on Libor

Documents released by the New York Fed show that the agency chose to focus on structural problems with Libor rather than help to bring corrupt actions at Barclays and other banks to light.

“At no stage did he [Geithner] or anyone else at the New York Fed raise any concerns with the Bank that they had seen any wrongdoing,” Bank of England governor Mervyn King said in testimony before a British parliamentary committee last week.

Geithner was aware there were problems with how Libor was calculated because it relied on self-reporting by the world’s biggest banks. But it’s unclear from the documents whether he knew about numerous phone calls in which Barclays employees admitted to New York Fed staff members that the bank was manipulating Libor.

In a phone call from April 2008, a Barclays employee made such an admission to New York Fed staff member Fabiola Ravazzolo: “So, we know that we’re not posting um, an honest Libor.” Then in October again, in three separate phone calls, Barclays executives told Fed employees that Libor was “unrealistic” and “absolute rubbish.”

Throughout the spring and summer of 2008, in the midst of increasing turmoil in the financial world, the Fed studied what was wrong with Libor.

Two weeks after the April phone call, Geithner held a meeting called “Fixing LIBOR” with senior New York Fed staff members. A few weeks later, in a meeting with U.S. Treasury officials, New York Fed staffers, including Ravazzolo, presented slides saying there are “questions regarding Libor’s accuracy and relevance.”

Then, on June 1, Geithner e-mailed recommendations to King, the British central banker, on how to improve the process for setting the rate.

The New York Fed also says that it raised the Libor issue in a meeting around this time with the President’s Working Group on Financial Markets, which consisted of top officials from Treasury, the Federal Reserve, the Securities and Exchange Commission, and the CFTC.

But two people with knowledge of the matter said senior officials and investigators never heard an appeal from the New York Fed to investigate possible wrongdoing over Libor. The people spoke on the condition of anonymity in order to speak more freely about the ongoing investigation.

Geithner, through a spokesman, referred questions to the New York Fed, which declined to comment. The New York Fed, in response to requests from lawmakers, is set to release more documents.

The Fed seemed unsure in the summer of 2008 whether it could prove that Libor was rigged. In a presentation June 5 given to staff members to other regulatory agencies, New York Fed employees said: “These claims are difficult to evaluate.”

Bailout paybacks

Still, the Fed proceeded to use Libor as a benchmark to determine how much insurance giant American International Group would pay back the government during its bailout. The measure also was used in the fall of 2008 to set the interest rate for the emergency lending program called the Term Asset-Backed Securities Loan Facility, or TALF.

“That number [Libor] determined how the taxpayer would be compensated,” said Neil Barofsky, who was the chief watchdog of the financial system’s $700 billion bailout. “That’s putting the Federal Reserve’s imprimatur on a rate it has suspicion to think was fraudulent. The Federal Reserve’s use of that and Treasury's use of that in the bailout sends a powerful message to the market: ‘Hey don’t worry about this, we’re endorsing it.’ ”

He added that the Fed’s response can be measured by the fact that no one has reformed Libor.

Libor is critical because it is used worldwide to set the rates for trillions of dollars’ worth of mortgages, student loans, auto loans and many other financial contracts. It was an especially important metric during the financial crisis because it was a key indicator for the health of the banking industry.

Congressional pressure


Congress is ratcheting up pressure on the New York Fed over its handling of the manipulation of Libor.

Rep. Randy Neugebauer (R-Tex.) on Monday sent a letter to the New York Fed requesting all of its communications from August 2007 until July 2012 with staff at the 16 banks involved in setting Libor, British regulators and U.S. regulators.

The documents already released by the Fed failed to show what actions were taken after Barclays’ admission, he said.

“We know the New York Fed eventually briefed Treasury, but what was the follow up? Did anyone ask if folks were still manipulating the rate?” said Neugebauer, who serves on the House Financial Services Committee, which is questioning Geithner on Wednesday.

A group of Senate Democrats earlier this month sent a letter to Justice saying that “regulators who were involved should be held to account for any failures to stop wrongdoing that they knew, or should have known about.”

Rep. Dennis J. Kucinich (D-Ohio) said nothing was done by the New York Fed to inform Congress, an oversight he considers negligent.

“You can make the argument that Libor was permitted to run its course so as not to add to the questions that were being raised about the health of international banking,” he said.

US Government asks judge to approve landmark settlement over banks’ foreclosure practices

Flashback: Last year, some mortgage lenders and government officials took action after discovering that many mortgage documents were mishandled.

Πηγή: Washington Post
By Brady Dennis
March 12 2012

Government officials on Monday asked a federal judge to approve a landmark settlement with some of the nation’s largest banks over flawed and fraudulent foreclosure practices, more than a month after they announced the $26 billion deal with fanfare at the Justice Department.

The 99-page complaint filed in a D.C. federal court details the “pattern of unfair and deceptive practices” perpetrated by banks in the wake of the housing bust. Among them: filing false and misleading court affidavits, charging excessive and improper fees to borrowers, keeping abysmal records, frequently losing paperwork, breaking promises to homeowners trying to modify their loans, employing staffers with little or no training and improperly foreclosing on active-duty military members.

Officials filed separate and lengthy settlement terms with the five banks involved — Bank of America, JPMorgan Chase, Wells Fargo, Ally Financial and Citigroup — that document the penalties each must pay, how that money will be distributed, how new mortgage servicing standards will be enforced and the extent of the legal releases the firms will receive as part of the deal.

Though the dollar amounts differ, the agreements with each bank are largely the same. One exception is a side deal in which Bank of America agreed to reduce loan balances for as many as 200,000 borrowers who owe more than their homes are worth. The average amount of those so-called principal reductions is expected to be more than $100,000, and it will reduce the amount of penalties the firm owes by about $850 million.

Monday’s filing came after nearly 17 months of negotiations between state and federal officials and the nation’s largest banks. Those talks began in late 2010 after widespread outrage over news that banks were using forged and shoddy paperwork to churn through massive numbers of foreclosures, a practice that became known as “robo-signing.” Forty-nine states ultimately signed onto the deal; Oklahoma crafted a separate settlement.

The settlement is intended to help troubled homeowners by requiring the banks to reduce the amount some borrowers owe on their mortgages, lower interest rates for others and pay restitution to homeowners who suffered mortgage-related abuses. It also will force lenders to overhaul their mortgage-servicing practices, including revamping how they interact with struggling mortgage holders and barring them from trying to foreclose on borrowers while simultaneously negotiating mortgage modifications.

Under the terms of the deal, banks would have three years to complete principal writedowns, refinancings and other relief. The settlement includes incentives for actions taken within the first 12 months.

The deal also includes about $17 billion that would fund a range of foreclosure-prevention measures, the majority of which would go toward lowering the loan balance for borrowers who owe more than their homes are worth. Other provisions would provide $3 billion for lowering interest rates for homeowners who are current on their loans. In addition, as many as 750,000 borrowers who lost their homes to foreclosure since 2008 would be eligible for payouts of about $2,000 each.

About $2.5 billion would go directly to the states. Those funds are intended to pay for housing and foreclosure-prevention efforts such as counseling, mediation and legal assistance. But officials in a couple states, notably Wisconsin and Missouri, have said they plan divert some of their funds to help plug budget shortfalls.

All five banks also agreed to provide broad relief to military servicemembers who were harmed by mortgage-related misdeeds. For example, in cases where federal officials determine that a bank improperly foreclosed on a servicemember, the firm will be required to pay that homeowner $116,785 or more, plus any lost equity in the property.

Monday’s filing also details the powers former North Carolina banking supervisor Joseph Smith will have in his role as a full-time overseer and enforcer of the agreement. The banks must submit to quarterly reviews and will face penalties if they fall short of the standards established by the settlement.

The deal gives banks a broad release from legal liability over robo-signing practices and a swath of other transgressions, such as their lax underwriting practices and their failure to properly modify loans for homeowners who qualified for adjustments.

It leaves open the door for other types of future litigation, including fair-housing and fair-lending violations, as well as civil rights claims. It doesn’t bar individuals from joining class-action lawsuits or prevent private investors from seeking damages, and it preserves the possibility for future lawsuits over related the way in which banks bundled and sold mortgages, a process called securitization.

Well before Monday’s settlement filing, a common criticism of the deal has been that it is unlikely to have a broad effect on the sagging housing market, given the scope of the problems that remain. Government officials who crafted the deal acknowledge that the final sum will reach only a fraction of homeowners across the country whose homes are collectively worth $750 billion less than what is owed on their mortgages.

But they have insisted it will provide much-needed relief to certain homeowners and represents a meaningful step in halting the shoddy foreclosure practices of recent years and in nudging the housing market toward firmer footing.

In fact, banks have faced a barrage of public and private lawsuits and investigations in recent years, with more likely on the way. Groups ranging from large investors to the Federal Housing Finance Agency have filed suit against the firms, alleging a range of mortgage-related misdeed and seeking billions of dollars in damages.

Earlier this year, President Obama also announced a new effort to expand investigations into abusive lending and securitization practices, and soon after, Attorney General Eric H. Holder Jr. said the Justice Department had issued civil subpoenas to 11 financial institutions. In addition, numerous state attorneys general have launched other investigations, filed their own lawsuits and issues subpoenas of their own.

With the landmark settlement on the brink of completion, officials say they now hope that additional banks will soon sign onto similar agreements and adopt the new mortgage-servicing standards outlined in the deal.

Homeowners interested in learning more about eligibility requirements for aid or finding contact information for the banks and government agencies involved can visit www.nationalmortgagesettlement.com.

Judicial Watch Obtains Documents Detailing Secret Department of Justice Transparency Workshop

Πηγή: Judicial Watch
Oct 18 2011

Deputy Associate White House Counsel: “please don’t have them reach out to any reporters before I can clear it w/ wh [White House] press.”

Contact Information:

Press Office 202-646-5172, ext 305

Washington, DC -- October 18, 2011

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has obtained documents detailing the Obama White House decision to close to reporters a Freedom of Information Act (FOIA) training workshop conducted by the Office of Information Policy (OIP) in the U.S. Department of Justice (DOJ). Judicial Watch obtained the documents from the OIP in response to a FOIA request filed on December 7, 2009, the same day the workshop was held.

The documents consist of a series of emails between White House staff and the Director of the OIP, and include the following statements:

“I am going to touch base with my public affairs office re your suggestion to get their reaction. I, personally don’t object as my message is the same whether the event is open or not. Our concern had been solely with the inhibiting effect it would have on the gov’t ’ees [employees] who might not speak freely if press are there.” — Melanie Pustay, OIP Director, to Blake Roberts, Deputy Associate White House counsel, December 6, 2009.
“Ok – please don’t have them reach out to any reporters before I clear w/ wh [White House] press.” — Blake Roberts to Melanie Pustay, December 6, 2009.
“After talking with… ben labolt [then-Assistant White House Press Secretary], the decision is that the training will be closed to the press.” — Gina Talamona, Press Release Deputy Director for the DOJ to Melanie Pustay and Brian Hauck, Counsel to the Associate Attorney General, December 7, 2009.
“I think you have the right to give closed training when you want it.” — Brian Hauck to Melanie Pustay and Gina Talamona.

The documents also include a statement by OIP Director Melanie Pustay regarding previous FOIA workshops: “So far I have always held parallel sessions, one for agency ‘ees [employees] and then one that is open.”

The training conference, held on December 7, 2009, was jointly hosted by the OIP and the Office of Government Information Services (OGIS) as a private workshop to provide tips to FOIA public liaison staff members on communicating, negotiating, and resolving disputes with individuals and organizations submitting FOIA requests.

The fact the Obama administration chose to close the transparency workshop to the public led tocriticism that the president was reneging on his promises of openness and transparency. On his first full day in office Barack Obama promised to “usher in a new era of open government” and directed agencies to administer the FOIA “with a clear presumption: in the face of doubt, openness prevails.” President Obama further instructed agencies that information should not be withheld merely because “public officials might be embarrassed by disclosure, because errors and failures might be revealed, or because of speculative or abstract fears.”

“There is a scandalously wide gap between Barack Obama’s rhetoric on transparency and the secretive policies of his administration,” said Tom Fitton, president of Judicial Watch. “These documents suggest that it is the Obama White House that is directly responsible for this unprecedented lack of transparency. Only in Washington would political appointees think it appropriate to keep secret a government workshop on transparency. And only in Washington would a politician promote his efforts on transparency while simultaneously taking steps to keep the American people in the dark about their government.”

Goldman Sachs braced for legal battles over financial crisis

Goldman Sachs chief Lloyd Blankfein seen at a Senate hearing last year, has hired top defence lawyer Reid Weingarten. Photograph Charles Dharapak/AP

Πηγή: The Guardian
By Simon Goodley and Graeme Wearden

Tuesday 23 August 2011 20.13 BST

Goldman Sachs, the embattled investment bank, will face an array of legal claims focusing on its conduct during the financial crisis, one of Wall Street's most feared lawyers warned last night.

The prediction of an escalation in cases is being made by Jake Zamansky, the US attorney nicknamed "Jaws" who spearheaded the successful pursuit of the investment banks after the dotcom crash. It follows a move by Lloyd Blankfein, the chief executive of Goldman Sachs, to hire Reid Weingarten, one of America's top criminal defence lawyers, to help him address claims that the bank misled clients in the run-up to the financial crisis and, afterwards, Congress.

"I consider this to be a very significant event. For Lloyd Blankfein to be hiring a top criminal lawyer indicates that there may be allegations of wrongdoing forthcoming from the Department of Justice [DoJ]," Zamansky said. "Investors are asking why there have been no criminal cases against Goldman Sachs or any investment bank arising from the financial crisis. This may be a sign of more cases to come. It may be the beginning of a series of cases against Wall Street firms".

Back in 2001, as the internet bubble was bursting, Zamansky filed the very first lawsuit against Merrill Lynch's Henry Blodget, then a top-rated technology analyst caught pushing shares to investors which internal emails showed he actually rated as "dogs". The case proved to be a catalyst for a legal assault on Wall Street which resulted in the banks signing some huge cheques.

Zamansky is representing a group of un-named investors suing Goldman, although the case is unrelated to the bank's battles with the DoJ.

However, other moves to pursue the investment bank and its directors are under way, with court documents showing that Blankfein and his fellow directors have been named in a derivative court action filed in New York by an individual investor called Michael Brautigam. Counsel for the defendants, who also include Goldman non-executive and steel tycoon Lakshmi Mittal, have been asked by District Judge William H Pauley III to appear in court next month for a pre-trial conference. As this is a civil case, Weingarten will not be representing Blankfein. The derivative action formed part of a 12-page report detailing the current legal cases the bank is facing, which Goldman outlined in a regulatory filing this month.

The document goes on to admit: "The firm expects to be the subject of additional putative shareholder derivative actions, purported class actions, rescission and 'put back' claims and other litigation, additional investor and shareholder demands, and additional regulatory and other investigations and actions with respect to mortgage-related offerings, loan sales, CDOs [collateralized debt obligations] and servicing and foreclosure activities".

Shares in Goldman fell in late trading on Monday after Weingarten's appointment emerged – shedding 4.7% to $104.25, their lowest level since April 2009.They had dropped again on Tuesday.

Blankfein turned to the high profile lawyer after the DoJ began investigating the way Goldman sold subprime mortgages – the toxic investments that triggered the credit crunch. The banker has also been accused of misleading a Senate committee – a claim that is emphatically denied by Goldman. Blankfein has not been charged with any offence. Goldman itself was charged in April 2010 with defrauding investors of more than $1bn (£606m), and later paid a $550m fine. In June, the bank was served with a subpoena by the Manhattan prosecutor.

"As is common in such situations, Mr Blankfein and other individuals who were expected to be interviewed in connection with the justice department's inquiry into certain matters raised in the [Senate] report hired counsel at the outset," said a Goldman spokesman.

Weingarten specialises in white-collar criminal defence, and has represented former WorldCom chief executive Bernard Ebbers and former Enron accounting officer Richard Causey. Both men are incarcerated after being convicted of fraud charges.

The website of Steptoe and Johnson, the firm where Weingarten is a partner, states that the lawyer "is part of the firm's white-collar criminal defence group". It continues: "Weingarten represents clients in complex criminal matters in both state and federal courts at the pre-trial, trial, and post-trial stages, including cases involving public corruption, the Racketeer Influenced and Corrupt Organizations Act, bank fraud, bribery, government procurement fraud, antitrust, healthcare fraud, and tax and securities fraud."