Thieves in the Night

“Community banks are a critical part of our financial system,” said U.S. Attorney Jenny A. Durkan. “Mr. Portmann lined his pockets with millions of dollars in commissions and bonuses, at the expense of the families who now find themselves underwater on their mortgages. His fraudulent conduct led to the demise of Pierce Commercial Bank and significant losses for other financial institutions.”

According to records in the case, between 2004 and 2008, Portmann and the other defendants conspired to submit false documents within various loan documents and applications.   They falsified information about the borrowers’ qualifications as well as their intention to reside in the homes being financed.   Based on a review of a sample of loans, the co-conspirators caused more than 270 loans that contained false and fraudulent documents and information to be funded by Pierce Commercial Bank representing in excess of $45 million in loan proceeds.

There were a boat load of these guys working the 3 Card Monte' during the credit bubble run up.

Trust your old Uncle Kenny here kids - these guys are like mice.  When you find one and kill it, you can bet your sweet ass that there are about 50 other ones crawling around in the walls unseen.

When longstanding frauds unravel, things usually get ugly.  I would make the argument that a large part of the US economy was built upon interconnecting schemes that involved many people from many walks of life.  When I read www.mortgagefraudblog.com or www.stopfraud.gov, what I see is the perpetuation of longstanding frauds that were allowed to fester.  The gambits and Three Card Monte’ games were perpetuated by doctors, lawyers, Indian chiefs, etc.  Some of the schemes date back two decades or more.  I think that many of them were carried on with either the expressed blessing of government (at worst) or with the government agreeing to just “look the other way” (at best).  At heart, I am a Mississippi hick with a 12^th grade ed-u-mah-kay-shun and a bit more schooling at the “Institution of Hard Knocks” and even a dummy like yours truly could see it.  There are many bloggers who were writing about this way before the credit bubble stalled and began deflating.  They were writing about the fraudulent behavior occurring within the bubble – sometimes in plain sight.

To clarify - I do NOT think that bubbles in the US economy are fraudulent.  They are very real but not sustainable.  Our economy has ALWAYS been marked by periods of rapid expansion followed by a collapse that plays out over a few years – until the “next big thing” sweeps over the country.  What I am talking about are the frauds and hucksters who use these naturally occurring bubbles just as a thief uses the cover of night to his advantage.  Like them or not, bubbles happen.  Euphoria and the pitter patter of fluttering hearts happens.  People have emotions – they love things and they hate things and sometimes love turns to hate and hate to love – the head is ever the dupe of the heart – know what I’m sayin’ Homie?  So, their money (and credit) goes toward that which they love.