The third omission from Attorney General Eric Holder's press
conference announcing the settlement with Citigroup of civil charges was
the words "criminal" and "indictment." The
Department of Justice (DOJ) press conference had a scripted press release.
According to DOJ's Statements there should have been Numerous Indictments
The DOJ press release contains the following statements that logically should have led to an indictment of a large number of Citi's officers. Holder states: "The bank's activities contributed mightily to the financial crisis that devastated our economy in 2008." Citi "made serious misrepresentations to the public -- including the investing public -- about the mortgage loans it securitized in RMBS." Holder's press release called them "toxic mortgages." Holder emphasized the "strength of the evidence of the wrongdoing committed by Citi"." Holder stated that Citi's officers knowingly made false "reps and warranties."
"Contrary to those representations, Citigroup securitized and sold RMBS with underlying mortgage loans that it knew had material defects.
Citigroup nevertheless securitized the loan pools containing defective loans and sold the resulting RMBS to investors for billions of dollars. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis."
The U.S. Attorneys leading the investigation made these statements in the press release.
"'[O]ur teams found that the misconduct in Citigroup's deals devastated the nation and the world's economies, touching everyone,' said U.S. Attorney of the Eastern District of New York Loretta Lynch. 'The investors in Citigroup RMBS included federally-insured financial institutions, as well as a host of states, cities, public and union pension and benefit funds, universities, religious charities, and hospitals, among others. These are our neighbors in Colorado, New York and around the country, hard-working people who saved and put away for retirement, only to see their savings decimated.'"
The Federal Housing Finance Administration (FHFA) even got to play a part in the press release.
"Michael Stephens, Acting Inspector General for the Federal Housing Finance Agency said, 'Citigroup securitized billions of dollars of defective mortgages, after which investors suffered enormous losses by purchasing RMBS from Citi not knowing about those defects. Today's settlement is another significant step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit in the lead up to the financial crisis".'"
Note that Stephens was the only one to use the "f" word.
DOJ & Citi Framed their "Statement of Facts" to Obfuscate the Facts
The press release states that Citi has made admissions "as part of the settlement" of "serious misrepresentations." "Misrepresentations" is a fancy way of saying Citi lied and deceit is the key to proving fraud.
"As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public -- including the investing public -- about the mortgage loans it securitized in RMBS."
I began drafting an explanation of what the convoluted statement of facts includes and excludes and why and how it was drafted to be useless, but discovered that the explanation requires me to explain at length the proper analytics of the toxic mortgage frauds led by Citi's senior officers, which is the subject of the fourth installment in this series.
Holder Ignores the Criminals and Purports to Hold a Legal Fiction "Accountable"