Abacus Indicted for Criminal Mortgage Fraud

George Washington's picture

While the name Abacus is famous as Goldman's fraudulent CDO scheme - the poster child for the rampant fraud on Wall Street - another Abacus (a small bank) has just made news by being criminally indicted for mortgage fraud.

Bloomberg’s Anthony Lee Pacchia interviewed Bill Black on the meaning and ramifications, and sent me the following summary and clip:

Manhattan DA Cy Vance given us a rarity in filing *criminal* charges against Abacus Bank and 19 former employees for mortgage fraud. The papers say the bank originated liar loans, a common practice for most banks. But according to guest Professor William K. Black, don’t expect this case to lead to more prosecutions of large banks despite overwhelming evidence of rampant fraud amongst the big banks in mortgage origination. A couple of his points:


-state and federal authorities don’t have anywhere near the manpower or resources to actually prosecute big banks for fraud.


-Treasury Sec. Tim Geithner has actively discouraged prosecutors from going after big banks.


-the very idea of prosecuting Abacus for a crime while allowing it to remain open is completely nonsensical and is likely to provoke a run on the bank.

Of course, fraud caused the 1930s Depression and the current financial crisis, and there’s no recovery because the government made it official policy not to prosecute fraud (and see this, this, this, and this).But government regulators have said that they'll take on the small fish ... and let the big-time criminals go.

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Hungrypirana's picture

HEADLINE: Former D.C. Council chairman Kwame R. Brown pleaded guilty Friday to lying on bank-loan applications




It never ceases to amaze me when listening to refrains to prosecute the banksters from Black and other half-wits, while they are silent about borrower fraud, knowing full well borrowers often are the liars in “liar loans.”


Why not prosecute borrowers, like the Feds did regarding Kwame? Come on, Black, cover the other side too.

hedgehog9999's picture

You 1/4 wit, half the country would go to jail!!! impractical!

That's why you must take the very top guys, just a few of them to start the reform process otherwise we'd have no banks.

But since the whole thing is rotten to the core, it won't happen!

Bob's picture


A few weeks after he started working at Ameriquest Mortgage, Mark Glover looked up from his cubicle and saw a coworker do something odd. The guy stood at his desk on the twenty-third floor of downtown Los Angeles's Union Bank Building. He placed two sheets of paper against the window. Then he used the light streaming through the window to trace something from one piece of paper to another. Somebody's signature.



Then there's our good "job creator" buddies at GE:


The "liar loans" were literally created by the professional liars booking the profits.  Do you think these two examples were the exception in an otherwise honorable industry?

What I hear you arguing is "Ignore that elephant in the room, we gotta stomp out the ants crawling around on the shit it left over in the corner. 

Which is exactly the course that "justice" is taking. 

todayone's picture

Even so, from the comprehensive on the account they travelled right to the function
http://www.oneoilpainting.com with digital photography training

anonnn's picture

Fraud caused the 1930's depression...

First time in over 50 years I have read that unadulterated truth, apart from the Pecora Comm residues that got buried/squelched into nonexistence.


Oldyeller's picture

This protest against American banks carrying out their Patriotic duty of dupeing the Eurpeans with a really first class confidence job, must stop! Have you no idea how many Americans property flippers ,Realestate salesmen ,Bankers and other ligitamate tax dodging lice have used the MERS system to get rich! rich! rich!? Another state of the art system was needed to trade property quicker and more efficeintly. instead of a quaint archaic Law system.  Why the States should be greatful that they showed them how to do it soooo..much faster. What's wrong with these hayseeds? Dont any of them own Blackberries? And now some people want to unwind this giagantic ball of twine? Good luck!  I must say that no one ,I mean no one ,not even the self proclaimed genius' at the Fed, who kept interest rates so low for far too long, could have forseen this. So forgive and forget, and let them get behind the wheel again and get this country out of the ditch without these frivilous law  suites!!




Bansters-in-my- feces's picture

Little weasel Timmy G is a tear or wrist.

Fuck you Timmy.

hedgehog9999's picture

The fucker shouold be indicted, Tim Geithner along with Paulson, Dimon and SEC heads and the like should be indicted for aiding and abbetting and protecting the big banks that are systemically important.

If every bank is indicted then  everybody goes to jail, we don't have enough jails or prosecutors to begin with, but if you take a few of these fuckers starting from the very top, it would be a way to set the fear of god on everybody else but alas it won't happen beacuse the whole thing is rotten to the core!!!


monad's picture

Publish the names of the perps and justice will find them. To cut down on accidents, get their addresses too.

Westcoastliberal's picture

I clued in on this fact some time ago but please let me share...everything the Obama administration does in the way of protecting consumers, solving the foreclosure mess, or in any way regulating the Banksters is 100% PR.  It in no way shape or form will have ANY effect whatsoever, because EFFECT is not the goal, it's only the PR!

Now THAT'S Hope & Change for you!

Dermasolarapaterraphatrima's picture

How long did it take them to find this itsy bitsy bank to prosecute.....where is it located? Kotsebue, Alaska?

onlooker's picture


Thanks for your work George

AetosAeros's picture

Sounds like a Token Sacrifice to me.

I can hear it now:

Obummer: "I am pleased to say, that under my guidance, the Justus Department is aggressively pursuing those responsible for the irrisponsible and fraudulent forclosure of hard-working Americans homes. With this next term, and my team of planners, we will be able to secure more aggressive convictions of banks like Abacus, which attempted to thwart the law, not uphold it"

At which point they'll inundate us with countless pictures of the 19 being held accountable, the freakshow of Jury selection, Judge orders; let in the press, keep em out, previous rulings, which side they hang it on, etc.  We'll get told over and over about how O is working tirelessly, hand in hand with the DOJ on the outcome of this ruling and how it will affect Americans and the future for our children, blah blah blah,

Then the coup de gras, He'll bring out some of the homeowners who lost in court and have them talk about how this legislation that he has 'planned' will keep the same happening to others.


Yep, Token Hangings of the small fry so the big ones can perpetuate the looting of the country without being paid attention to.

Bob's picture

19 is an interesting number--what a coincidence, just like the 19 hijackers. 

jeff montanye's picture

it was always the justus department but it is worse now than even under bush's daddy.  lots of people went to jail for fraud in the s and l debacle (bill black's work).  for chapter and verse: http://www.amazon.com/With-Liberty-Justice-Some-Equality/dp/1250013836/r...

geekgrrl's picture

I think he insinuated that yes, it was a small fry outfit and that the problems are more systemic. After his comment about "systemically important" being in reality "systemically dangerous," it just reaffirmed my impression that this man should immediately be appointed Attorney General, and Rip Van Holder should be placed under a tree in the woods so he can sleep for another sixteen years.

CaptainObvious's picture

Pishhhhh.  This is like throwing the book at the schoolyard drug dealer and giving him five consecutive terms in prison, while the drug kingpin gets a $1000 fine and flies off to his Caribbean condo in his Gulfstream with a smile on his face.

tony bonn's picture

bill black is a true american hero.....god bless black....

i loved how black corrected the suit when he referred to these large criminal banks as systemically important....when black corrected him that they were systemically dangerous, i knew that black had a first rate mind.....

we need to cut the war budget by 2/3 and reallocate the money to prosecuting wall street and the bush crime syndicate....

BeetleBailey's picture

100% agree Tony...

Problem is, these fucks all have "buffers"; layers and  layers of people on the payroll to protect their sorry asses in every way...

Willie Chi Chi, comes to mind with these fuckers;

"Yeah Senator...the famly had a lot of buffers..."

Add in a doofus media (or, muzzled as to the investigative reporters) and voila~

Bullshit served up daily!

100% safe (for them)!

lakecity55's picture

I think like they found out after ole Pierpont died, only spare change will be found in the Bushes.

Most of it will belong to the Red Shield.

chunga's picture

I just put up an online petition calling for the recusal of two Rhode Island Superior Court Judges who are in the bag.

The Honorable Presiding Justice Alice P. Gibney: Recuse Justice's Allen P. Rubine and Michael A. Silverstein.

This accompanies an open letter sent today to the Presiding Justice with the Senate "Leaders" copied in.

Open Letter to The Rhode Island Superior Court Regarding Foreclosure Fraud June 9, 2102

The comments made by the Chicago Bankers Association tells ya they KNOW they screwed the pooch. Given the very first opportunity to break the law they did. The Pooling and Servicing Agreements and Master Servicing Agreements are the laws that indenture this crap.

The UCC does not trump New York Securities Law, as the bankermen would have us believe.

That is the root cause of all this robosigning baloney...making up phoney docs then moving under state statute to foreclose. The mortgages are not qualified mortgages and they are VOID

If they try to "backfill" the pools in the trusts it triggers massive negative tax consequences pursuant to IRS Rules 806 A-G.

They cannot foreclose by law. The instruments they failed to convey to the trusts within the specified time period renders them VOID and unenforcable. But that did not stop anybody from selling toxic certificate and bonds. AND they sold derivatives on top of this bogus shit.

Cover my zero hedge. Sign the petition. I'm going in.

Bill Black is right and we have to stop this. It will get ugly.

Freddie's picture

Rhode Island, NY, Chicago - Dem sh*tholes.  Akerman - Dem law firm.

"Tonight it's over- We lost our democracy!"


chunga's picture

Freddie did you sign the petition?

GW give me a hand here.

RI will be a major battleground due to the standing Federal Stay Order. Big gun Pro Hac Vice attorneys flying in from all over the place.

The Superior Court blows but there is some heavy brass knuckles action going on in RI Fed. Court.

I am willing to fly up there and argue with the General Assembly if they promise not to kidnap me.

illyia's picture

I they promise not to kidnap you??? Of course they will promise not to kidnap you.

You better get a tiny camera and stick a friend with a receiver near by... stream it "live".

Oh - btw - you are a hero... no/sarc

Buck Johnson's picture

They can't go after the big banks because it would take them down.  And if they go down so does the house of cards aka monty that has been going on for decades.

chunga's picture

They are out for blood. Like Mewn said here in a comment the other day.

I'll be happy to choose the hill I die on.

My head is now on the chopping block and if it gets chopped off so be it.

I'll have a grin on my face when I die because I am doing the best I can to fight these tyrants and refuse to go down without a fight.

Revert_Back_to_1792_Act's picture


Read some Thomas Jefferson...and dust off those really old law books.


Wouldn't the laws he mentions still be there?  Couldn't everything still be operating on top of them?

This argument is also interesting.


This video is also interesting.  Listen to how the Judges Demeanor changes.


In Blacks Law 4th, it defines the word "Overcome" - To Rebut a Presumption.

Thank you for championing for all the suffering people out there.  It is a shame that the government doesn't do this. 



GMadScientist's picture

"...or digs a dollar out of the mines..."


Revert_Back_to_1792_Act's picture

Seems like they sure dug a lot of them out.

"We estimate that there are now 12 billion--I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins.

From Johnson's speech at signing of 1965 Coinage Act. http://www.presidency.ucsb.edu/ws/?pid=27108

Why aren't they still circulating.  I can only seem to find the cupro-nickel variety.

Putting all that wealth back in circulation would restore prosperity.  It is now sitting pretty much idle in bank vaults and sock drawers.



neidermeyer's picture

I'll stand with you ... my MBS/CDO was audited after failing (and payout by AIG) and found that 82% of all mortgages FAILED underwriting criteria ... it will get ugly but I've been saying it for several years that killing the fraudsters is the ONLY way we save the country.

jeff montanye's picture

it may come to that but meanwhile don't believe the bankster propaganda.  the failure of a bank, even a big bank, need not be catastrophic if done in a controlled, organized way, like the fdic does routinely and unlike how lehman brothers was done (i suspect to shake down the taxpayers, duly frightened).  the exception of course is if one has a portfolio concentration in the equity or debt of said bank.

chunga's picture

Many of the alleged mortgagees that waltz into court are already bankrupt both morally and financially. Those that aren’t financially bankrupt would be if it weren’t for ill-advised tax-payer bailouts that were angrily objected to by the taxpayers themselves. Foolishly following this dishonest course may very well bankrupt the entire country if not the world. And to further suggest that if these financial leviathans that now stride the earth suffered their demise as a result of their own bad acts, it would spell undoubtful doom for all; leaving us no option but to salt the earth and burn the churches.

This is ridiculous. The only ones that would be doomed would be them. The vacuum that would be created by their rightful rejection would be filled by honest institutions that are not financial predators. We are utterly sick of their financial junk innovations that they have, quite literally, turned into a mortal death pledge.

I am sad to inform these people that we are not living in a black and white movie. This is not Bedford Falls and we are not dealing with Bailey Building and Loan Association, an institution vital to the well-being of the townspeople. In the real world, George Bailey no longer exists and Mr. Potter did indeed steal and keep Uncle Billy’s $8,000.

 The stern looking bank regulator not only approved and encouraged this theft but also helped Mr. Potter convert that money in to trillions of dollars of unregulated derivatives; conspired to pay no taxes then proceeded to conceal that fact. To allow this charade to persist would be catastrophic.

Bob's picture

Can't wait to see if Vance gets Spitzered. 

eatthebanksters's picture

Where is Holder, Schneidermann?

Muppet Pimp's picture

Abacus Bank?  Abacus was a CDO from Goldman, what is Abacus bank?  They chose that bank because of the name or something (liar loans were commonplace all over)?  Gimme a break.


Benjamin Glutton's picture

TPTB must have been *thrilled* to discover an actual bank named Abacus.


If only they could find a Magnetar Savings and Loan we could finally put this entire disaster behind us....


The financial crisis was an Inside Job.

GMadScientist's picture

Would the real Lee Harvey Oswald please stand up.

disabledvet's picture

They should have chosen "the Bank of the Aardvark" by that standard. "Right next to the Bank of the Ozarks" from what I hear. Here's there "Bank of the Aardvark" commercial:

My God, who could arrest such a thing? Have the authorities gone mad?

beastie's picture

 They couldn't find a bank called AAA1. After Abacus Bank comes Acme Bank. It will be a long time before they can work their way to Goldman Sachs.

falak pema's picture

In Europe we call it "tourista bank"...very common in Greece and Spain these days, scheduled to open on gala night in Rome and Paris. After that, London and New York. Will make the Titanic feel like the boat in a bath tub.