Honor amongst Thieves

If one takes a serious look at the recent history of organizations like Lehman Brothers, Countrywide and most recently, MF Global, you start to wonder if what is defined as criminal behavior in the rest of the United States is the same for folks on Wall Street with straight line connections inside the belt way.

Last I understood theft was defined as “a criminal act in which property belonging to another is taken without that person's consent.” It refers to “all crimes in which a person intentionally and fraudulently takes personal property of another without permission or consent and with the intent to convert it to the taker's use.” If this is the case, why hasn’t the Obama Justice Department (to be consistent like the many administrations prior), ever prosecuted anyone know or documented to have run an establishment involved in for what my folk would call plain on stealing?

There are several levels of punishment ascribed to theft, most of which are based on the type and the value of the stolen property: the moist common being imprisonment. Grand theft is generally punishable by imprisonment in state prison. Petty theft is generally punishable by imprisonment in county jail. This is normally applied for thefts in value of $400 or more depending on the state. Embezzlement, which happens when an employee takes personal possession of money or property that was originally intended for their employer, as well as fraud which occurs when someone tricks a victim into voluntarily handing over money or property, are both forms of Grand theft.

In New York, grand theft is defined as larceny and specific statues are on the books(S 155.05). Larceny defined includes when “a person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof. It also includes “wrongful taking, obtaining or withholding of another`s property,” by trespassory taking, common law larceny by trick, embezzlement, or obtaining property by false pretenses.” If the aforementioned is the law then it should be asked why has no charge or charges ever been brought up against the likes of on Angelo Mozilo, Richard Fuld, or Joe Corzine by the Attorney General of the United States? It is not like there is no evidence or paper trail evident from their “obtaining property by false pretenses.”

Let us examine Angelo Mozilo, the former chairman and chief executive of Countrywide who was accused of insider trading. He was the focus of a Securities and Exchange Commission's fraud case also involving former CFO Eric P. Sieracki and two other executives and former President David Sambol. All were accused of misleading investors in the years 2005 through 2007 when it was acyualy on a path to bankruptcy when it was acquired in 2008 by Bank of America Corp. In 2009, the Securities and Exchange Commission charged Mozilo with securities fraud for deliberately misleading investors about the significant credit risks being taken in efforts to build and maintain the company's market share and additionally charged with insider trading for selling his Countrywide stock based on non-public information for nearly $140 million in profits.

As a consequence in 2010 Mozilo paid a record $22.5 million penalty to settle the charges that he misled investors as the subprime mortgage crisis emerged and was also permanently barred from ever again serving as an officer or director of a publicly traded company. He also agreed to $45 million in disgorgement of ill-gotten gains to settle the SEC’s disclosure violation and insider trading charges.

The second example deals with what happened to Richard Fuld, who was chief executive of Lehman Brothers when it went bankrupt. One of the strange issues with this that federal banking regulators were aware of all that was happening at Lehman Brothers months prior to its demise. Many believed that Fuld had sold $482 million worth of his Lehman stock between 2000 and 2007. Even a team of researchers at Harvard Law School noted that between 2000 and 2007, Fuld cashed in Lehman shares worth $461 million and received cash bonuses of $61.6 million. The question still remains, why did the Federal Reserve and US Treasury enable this process and still need to bail them out without charging Fuld with any criminal wrong doing? He had to know things his investors didn’t since he was able to cash in on Lehman Brothers stock before it true value was released to the public.

Lastly, there is former democratic Jon Corzine, the former Governor of the state of New Jersey from 2006 to 2010 and a five year member of the U.S. Senate prior to being the governor. Before that he was the former CEO of Goldman Sachs and after his life of politics he became them CEO of MF Global.

MF global has filed for bankruptcy over the past several periods due to what can only be described as “theft.” The way the company made money was by trading complex financial instruments called “repurchase agreements.” In the process (after losing a bundle of loot in guess wrong on these investments) the company reportedly “misplaced” over $1.2 billion from 36,000 customer accounts. Not to mention that the company under Corzine’s leadership took funds from customer that remained — to the tune of $700 million — to make up for the shortfall without their permission. Corzine and his folks informed congress that they didn’t know where all that $1.2 billion went (eventually $1.6 billion). In summary, in October 2011, before it entered bankruptcy proceedings, its executives took money from segregated customer accounts to prop up its rapidly collapsing business resulting in $1.6 billion is missing with virtually no chance that the full amount will ever be recovered.

Like Fuld and Mozilo, It’s not clear that the MF Global crooks will ever be prosecuted . It is more likely that he will not face any criminal charges although he committed criminal acts to the tune of 1.6 billion in theft. That is like stealing Cowboy stadium and not going to prison, or a hanger with 1 million U.S. Drones.

I cannot say why the Obama administration has not or appears to ferment limited if any desire to prosecute thieves of the likes listed above. Maybe it is the fear that prosecuting folks likes Fuld or Corzine will hurt his re-election. This past February, President Barack Obama's re-election campaign identified its top fundraisers including 61 people who each raised at least half a million dollars. Corzine, was a big fund-raiser for the president. In fact, Corzine was in the highest category for Obama fund raisers reporting that he had raised more than $500,000 for the campaign, most of which were collected at a $35,800 per ticket fundraiser that he hosted at his wife’s Fifth Avenue apartment in April 2010.

Richard Fuld is also a long-time Barack Obama along with dozens of other former Lehman Brothers Executives, such as John Rhea - (over $500,000) Co-Head of Lehman Bros. Global Investment Banking, and Mark Gilbert - (over $500,000) Lehman Brothers Senior Executive. I would even bet if some stuff hit the fan involving Goldman Sachs, there would be no investigation let alone criminal charges or penalties levied against their seeing that the executives of Goldman Sachs have contributed more than $691,000 to the Obama campaign.

I don’t ever suspect any criminals will be charged in America who steals billions. It actually reminds me of a saying I have heard over the years. It is either “there is even honor among thieves” or "there is no honor among thieves.” I guess it implies something iniquitous, that even corrupt or bad people sometimes have a sense of honor or integrity, or justice; or that thieves steal and that honor in this case means loyalty, suggesting that it is not good to disrupt the team. I guess in summation, regardless of the theft lying thieving bastards can trust each other and will never turn on their own kind, whether on Wall Street, inside the beltway, or democrat or republican.

NOTE-Correction, Christine Forester -never worked for Lehman Brothers (has been removed).