http://www.huffingtonpost.com/2010/02/15/janet-tavakoli-wall-stree_n_462791.html

Janet Tavakoli, President Tavakoli Structured Finance

If a high-on-crack driver crashed his speeding rental car into your house and killed your spouse, you would be outraged if law enforcers took bribes and gave the driver a pass on a blood test. If the judge then merely fined the killer and ordered you to pay it, you would appeal, wondering what happened to justice. If the government then handed the crack-driver keys to a bigger rental car and presented you with the rental bill, you would certainly protest.

How is it, then, that you have remained largely silent in the face of the same sort of behavior by Wall Street and Washington? Bonus-seeking bankers careened off the right path and ran Ponzi schemes that nearly ruined our economy. Bureaucrats and elected officials bailed them out without demanding consequences. Bankers are revving their engines again.

Bankers Get Bonuses, the USA Gets the Great Recession

Taxpayers are asked to believe that over-borrowing by U.S. consumers created a global financial crisis. This myth aids and abets Wall Street. The economy was nearly destroyed because banks borrowed massively, and they borrowed many multiples more than they could afford. Wall Street pumped the Fed’s cheap money through financial meth labs, and deceptive financial vehicles ran over securities laws at top speed.

More than 20% of mortgage loans–including originally sound loans–are underwater, meaning the borrower owes more than the home is worth. Official unemployment numbers hover at around 10%. If you include underemployment, it is around 18%. In depressed areas where the nation’s poorest–chiefly minorities–have been hurt the most, unemployment has soared past 30%. For this destitute group, unemployment combined with underemployment exceeds 50%.

As U.S. soldiers fought wars in Iraq and Afghanistan, Wall Street flattened Main Street. Our foreign wars drag on, while the U.S. battles a crippling recession at home.

Read more here:  http://www.huffingtonpost.com/janet-tavakoli/wall-street-and-washingto_b_462205.html

The victims were as old as 91 and their losses could add up to nearly $20 million.

Peter Bakowski, a 58-year-old former Tampa mortgage broker, has admitted orchestrating a Ponzi scheme that involved more than 30 investors and institutions and more than 150 deals, documents show.

Bakowski has agreed to plead guilty to a federal charge of making false statements to a financial institution, which carries up to 30 years in prison. He also faces a likely order to pay restitution to the victims. Read more about the  Ponzi scheme…

Do you own a law firm? Would you like to utilize our mortgage auditing services for foreclosure defense cases? Contact MFI-Miami now!

In mob parlance, as per Scorcese, “busting out” a restaurant or other business means buying supplies on credit, then stealing those supplies and leaving the business holding the bag. When the credit ceiling of the business is reached, the business is declared bankrupt and the creditors are stiffed. The mobsters, of course, walk away with all the supplies that were bought on credit and sell them off for a 100% profit. The beauty of the scam is that the business (and the business’ owners) are the ones stuck with the legal responsibility, while the creditors are stuck with the tab.

Beu-di-ful!, as the mobsters would call this racket. Not so “beudiful” for the business owners or the creditors—which is why of course there are laws against this sort of thing: Racketeering laws. Laws against fraud. This kind of planned bankruptcy is explicitly illegal, as per 18 U.S.C. §152, as well as 18 U.S.C. §157, both of which cover bankruptcy fraud, which is the use of bankruptcy in order to aid in or conceal the commission of a fraud or theft.

I would argue that that is exactly what has happened to the U.S. economy, at virtually all levels. Read more about busting out the economy…

Do you own a law firm? Would you like to utilize our mortgage auditing services for foreclosure defense cases? Contact MFI-Miami now!

As Henry Kissinger once said ~ ” It’s not a matter of what is true that counts but a matter of what is perceived to be true “  and, believe me, the recent rally of the Dow Jones to 10,000 is a manipulated Wall Street Ponzi scheme to draw Main Street into the market to reinflate the same credit bubble that just burst ~ while bailing out the financial elite, who are mainly sellers, in the process.

When Robert Reich says ” Watch Your Wallet even with the Dow at 10,000 ” ~ you had better listen because the real truth of our present financial disaster is just beginning to emerge from the darkness. Read more about the Wall Street Ponzi scheme…

Do you own a law firm? Would you like to utilize our mortgage auditing services for foreclosure defense cases? Contact MFI-Miami now!

Janet Tavakoli is one of the foremost experts on structured finance and derivatives. Tavakoli made an outstanding presentation to the IMF last week on the fraud which led to the financial crisis.

Making many of the same points that William K. Black (senior S&L regulator and professor of law and economics) has made about fraud and the big picture of what has occurred in the current as well as the S&L crisis – see this and this – Tavakoli told the IMF:

Wall Street gave mortgage lenders large credit lines (similar to credit card debt) and packaged the loans into private-label residential mortgage backed securities (RMBS). Most of the RMBS was rated “AAA” … But many RMBSs were backed by portfolios comprising risky fraud-riddled loans. Most of the “AAA” investment was imperiled, and subordinated “investment grade” components were worthless. Wall Street disguised these toxic “investments” with new value-destroying securitizations and derivatives.

Read more about the Ponzi scheme…

Some will rob you with a six-gun, and some with a fountain pen.” That image from “The Ballad of Pretty Boy Floyd” is out of date these days, since bankers and other thieves who foreclosed on the bereaved widow’s home in Woody Guthrie’s old folk song don’t use fountain pens anymore. Instead, they rely on computerized transactions, online solicitations, international money swaps and all sorts of other secret shenanigans that leave the robbed consumers blindly unaware of who actually assaulted them.

First, a bank hustles them into deceptively low-cost introductory loans, which are then sold in a Ponzi scheme of speculation. When the homeowner’s interest rate inevitably balloons, it’s some other bank the consumer never heard of that lowers the foreclosure ax. Read more about Ponzi schemes…

Accusations of fraud continue to be leveled against Mike L. Wilson, a 55-year-old Santa Maria mortgage business owner with many San Luis Obispo County clients and real estate investments.

According to various lawsuits, most of the charges are based on allegations that Wilson operated a Ponzi scheme whereby he took money from investors promising it would be invested in secured real estate, but he instead used the money to pay off other investors to keep the scheme going.

At least six suits have been filed against Wilson in Santa Barbara County Superior Court since the end of March, alleging losses of more than $5 million that was supposed to go toward commercial and residential investments in Los Alamos, Santa Maria, Nipomo, Pismo Beach and San Ardo, a town in southern Monterey County. Read more about the alleged Ponzi scheme…

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