2nd Circuit Upholds Insider Trading Conviction of Ex-Goldman Sachs Director The panel’s decision represented the latest retreat from the appellate court’s holding in 2014’s “U.S. v. Newman,” which narrowed prosecutors’ ability to prove insider trading.

Gupta-m1114755-web2
Rajat Gupta, right, with his attorney Gary Naftalis, following his sentencing in 2012. Photo: Louis Lanzano/ Bloomberg
https://www.law.com/newyorklawjournal/2019/01/07/2nd-circuit-upholds-insider-trading-conviction-of-ex-goldman-sachs-director/
By Colby Hamilton | January 07, 2019 at 04:12 PM

For the second time in as many months the U.S. Court of Appeals for the Second Circuit has declined to reverse an insider trading secured by federal prosecutors before the circuit court’s ruling in United States v. Newman and the sequence of decisions it spawned.

On Monday, the panel, composed of Circuit Judges Amalya Kearse, Richard Wesley and Christopher Droney, denied former Goldman Sachs director Rajat Gupta’s second attempt to have his insider trading conviction overturned. The Second Circuit had previously in 2014 denied Gupta’s argument that the trial court erred in admitting some evidence, while excluding other evidence offered by the defense ahead of his 2012 conviction. He ultimately served 19 months in prison, and was released in 2016.

The current appeal came after U.S. District Judge Jed Rakoff of the Southern District of New York denied Gupta’s motion to vacate his conviction in the wake of the Second Circuit’s 2014 decision in Newman, which substantially narrowed the “personal benefit” requirements of an insider trading relationship. Gupta argued before Rakoff that the jury instructions in his case were legally invalid under Newman.

On appeal, the panel reviewed Gupta’s challenge based on a cause-and-prejudice standard. It agreed with Rakoff’s argument that nothing stopped Gupta from arguing that the jury instructions were faulty on direct appeal from his conviction, since they were made during trial.

The panel observed that its November 2018 decision in Whitman v. United States tracks closely with the dynamics of Gupta’s case, as jury instructions were objected to at trial but weren’t pursued on appeal. Other insider trading cases pursued the line on appeal before Newman, the panel noted, making the claims in Whitman—and therefore Gupta’s case—insufficient to show cause.

Defendants in other insider trading prosecutions were contending that juries should be given narrower definitions of the personal benefit needed to find culpable insider trading,” the panel wrote. “We conclude that [Gupta] presents no viable claim that the personal benefit challenge was unavailable to his counsel on appeal.”

While the panel, having found Gupta failing the cause standard, could arguably have ended its findings there, it proceeded to address the issue of prejudice, and, in doing so, waded directly back in to the circuit’s muddied law on insider trading.

The panel first found that Gupta failed to show the personal benefit instructions were so flawed as to deny him due process, noting that the actual language provided to the jury in question spoke of “maintaining a good relationship with a frequent business partner.”

That last clause proved critical for the panel, who argued it squared with requirements under precedent, but not the Second Circuit’s most recent double take in United States v. Martoma, which is mentioned briefly later. Instead, the panel opted to return to the insider trading Ur-precedent from the Supreme Court’s 1983 decision in Dirks v. SEC.

The Dirks court set out a “varying sets of circumstances…which would warrant a finding of the tipper’s illegal purpose,” the panel noted. Despite the fact the specific language required by Newman for a tangible or pecuniary benefit was not present in Gupta’s jury instructions, the language was satisfactory under Dirks’ seemingly broader “circumstances.”

In fact, the panel’s acknowledgment that Dirks highlighting the ability for a quid pro quo relationship despite “the lack of need for proof of the tipper’s financial or tangible gain” appeared to potentially undercut a portion of the court’s holding in Newman, continuing the erosion that began with the Supreme Court’s findings in Salman v. United States and continued through the two versions of the Second Circuit’s Martoma decision.

The fact that Newman‘s requirement for proof of a tipper’s pecuniary or other tangible gain has been rejected by the Supreme Court disposes of Gupta’s contention that Newman meant the trial court’s instruction that proof of pecuniary or tangible benefit was not necessary caused him to be convicted of a crime for ‘conduct that is not criminal,’” the panel said, quoting from Gupta’s brief on appeal.

A spokesman for the U.S. Attorney’s Office for the Southern District of New York, which secured Gupta’s original conviction and handled the appeal, declined to comment.

Kramer Levin Naftalis & Frankel name attorney Gary Naftalis handled Gupta’s appeal. He did not respond to a request for comment.

Related:

Iowa Supreme Court Rules Civil Forfeiture Laws Violate Fifth Amendment, Upholds Pleading The Fifth

May 30, 2018 @ 02:02 PM 23,367
2 Free Issues of Forbes
Iowa Supreme Court Rules Civil Forfeiture Laws Violate Fifth Amendment, Upholds Pleading The Fifth
https://www.forbes.com/sites/instituteforjustice/2018/05/30/iowa-supreme-court-rules-civil-forfeiture-laws-violate-fifth-amendment-upholds-pleading-the-fifth/#3d1978161655

Institute For Justice
We are the national law firm for liberty.
Opinions expressed by Forbes Contributors are their own.
Nick Sibilla Nick Sibilla , Contributor

The Iowa Supreme Court struck a blow on Friday against the state’s civil forfeiture laws, which allow the government to permanently confiscate property without ever filing criminal charges. In a unanimous, 33-page ruling, the court strengthened the constitutional protection against self-incrimination for owners fighting civil forfeiture, revived a motion to suppress evidence, and rejected a tactic commonly used by prosecutors to prevent owners from being awarded thousands of dollars in attorney’s fees.

Iowa has been a surprising hot spot for civil forfeiture, ensnaring motorists, professional poker players, and an entrepreneur who ran a Mexican restaurant for almost four decades. The state even rewards the aggressive pursuit of forfeiture cases: Police and prosecutors can keep up to 100 percent of the proceeds from forfeited property. Little wonder then that forfeiture has become quite profitable for law enforcement. An investigation by the Des Moines Register revealed that Iowa law enforcement agencies had taken over $55 million in cash and more than 4,200 vehicles since 1985.

Spurred by these abuses, last year, Iowa legislators strengthened due process protections for innocent owners, and required a criminal conviction to forfeit property valued at under $5,000. Although Iowa’s conviction threshold is the lowest of the 15 states with a conviction requirement, in 2015, data analysis by the Institute for Justice found that only 14 percent of Iowa’s cash forfeitures topped $5,000. Friday’s ruling should further curtail civil forfeiture.

The case began when Jean Carlos Herrera was driving from New York City to Los Angeles in September 2015. While Herrera was passing through Pottawattamie County, Iowa on Interstate 80, he was pulled over by Sergeant Kevin Killpack for going four miles over the speed limit. During the stop, a drug dog alerted to the car. Without Herrera’s consent, Killpack searched the Expedition, but only found some tools, a cell phone, a hollowed-out ice cream machine, and a Pelican case that “contained drug paraphernalia and remnants of marijuana.” No other drugs were found.

Killpack cited Herrera for speeding but never charged him with a crime. Yet that didn’t stop the sergeant from seizing the car, a 1999 Ford Expedition registered to Herrera’s friend, Fernando Rodriguez, and all the equipment inside.

Less than a week after the Expedition was seized, Rodriguez hired an attorney, who promptly emailed Pottawattamie County that Rodriguez was fighting back as an “innocent owner.” Rodriguez’s attorney also noted that under Iowa law, the government must pay attorney’s fees to property owners who win their civil forfeiture cases. He also noted that “the fees are going to be greater than the vehicle value, so this might be one to let go.”

Soon after, Sergeant Killpack applied for a warrant to search possible hidden compartments within the vehicle, based on the fact that Rodriguez had hired an attorney. According to Killpack, “it does not make financial sense to spend a significant amount of money, in attorney fees, in an attempt to reclaim a vehicle worth $2,132,” which in his mind meant that “there is something much more valuable still inside the vehicle that has not been found by law enforcement in the initial search.”

A district court granted the warrant, though, as the Iowa Supreme Court noted on Friday, Killpack’s warrant application “failed to mention that Rodriguez had argued he was entitled to attorney fees from the State as an innocent owner.” On his second search, Killpack found and seized almost $45,000 in cash hidden inside a false compartment.

In October, prosecutors filed a complaint to forfeit the cash, the car, and the rest of the property taken during the traffic stop, claiming that the property was “drug proceeds” or “used in the transport of drugs.”

The two men (who were now represented by the same lawyer) filed an answer together that stated they had an interest in the seized properties and demanded their return. Herrera also invoked the Fifth Amendment and refused to completely comply with the state’s disclosure requirements.

Under state law, property owners who want to reclaim their seized property must fully disclose “the nature and extent” of their interest in the property, as well as “the date, the identity of the transferor, the circumstances of the claimant’s acquisition.” Refusing to comply can result in the property forfeited to the state. Yet those forced disclosures may reveal information that could incriminate the owner or trigger a perjury trap, which would violate the Fifth Amendment.

Writing for the majority, Justice Thomas Waterman noted that Iowa’s forfeiture laws burden owners with a “difficult choice between asserting [their] privilege against self-incrimination or foregoing [their] claim for return of the contested property.”

As Waterman recounted, Herrera omitting that information was “fatal to his claim:” The district court ruled that Herrera’s reply was not a proper answer and so he was not entitled to a forfeiture hearing.

But on appeal, the Iowa Supreme Court overturned that ruling, and held that “assertion of the Fifth Amendment privilege against self-incrimination excuses compliance” from Iowa’s disclosure requirements for civil forfeiture claims. “The court may not enforce the specific disclosure requirements…over the claimant’s Fifth Amendment objection,” Waterman ruled.

Friday’s ruling also revived Herrera’s motion to suppress evidence, which the district court had dismissed as well. Both the Iowa Supreme Court and U.S. Supreme Court have ruled that the “exclusionary rule,” which prohibits the government from using evidence that was not lawfully obtained, applies to criminal prosecutions and civil forfeiture proceedings.

In this case, Herrera claimed that the stop, search, and seizure of the car violated the Fourth Amendment and should be suppressed accordingly. Justice Waterman ruled that “the district court must first rule on motions to suppress evidence before resolving forfeiture claims,” since that ruling “determines what evidence the state can rely on during the forfeiture proceeding.”

The court’s ruling should strengthen safeguards for property owners facing civil forfeiture. According to Dean Stowers, who represented Herrera and Rodriguez, “this decision will require the state to establish the legality of the seizure” before the state can attempt “to forfeit property or to compel persons to answer questions about their property.”

A representative from the Iowa Attorney General’s Office said they were “still looking at the possible impact of the ruling” and declined to comment further.

“It appears that we followed the forfeiture rules as they existed at the time, and we argued that the claimants did not follow the rules,” said Pottawattamie County Attorney Matt Wilber. ”The District Court and Court of Appeals agreed with our position. The Iowa Supreme Court has now ordered that they are changing the rules, so we’ll all follow the new rules.”

As for Rodriguez, five months after the state filed its forfeiture complaint, prosecutors decided Rodriguez could get back his Ford Expedition. His attorney then filed to recover nearly $9,000 in attorney’s fees and expenses, which, under Iowa law, are owed to prevailing parties. But because the state dropped its forfeiture case just before a court hearing, the district court ruled that Rodriguez didn’t actually prevail because he didn’t technically win on the merits in court.

Justice Waterman rejected this argument wholesale:

“Rodriguez sought to prevent the State from taking permanent possession of his vehicle. He fulfilled his primary objective of getting his vehicle back after months of contested litigation against the State. On this record, we hold that Rodriguez is a prevailing party even though the district court did not expressly find that he was an ‘innocent owner.’”

Moreover, Waterman noted that fee awards “help level the playing field for persons contesting government seizures,” as they “incentivize attorneys to represent citizens seeking return of their property from the government.”

The Iowa Supreme Court’s ruling contrasts starkly with the U.S. Eighth Circuit Court of Appeals, which covers Iowa. In 2016, the Eighth Circuit considered the case of Carole Hinders, who ran Mrs. Lady’s, a cash-only Mexican restaurant in Arnolds Park, Iowa. Based simply on the way she deposited her cash, in spring 2013, the IRS raided Carole’s entire business checking account—almost $33,000. The IRS accused Carole of “structuring” her deposits, or deliberately keeping her deposits under $10,000 to circumvent a reporting requirement. She was never indicted.

Institute for Justice

Carole Hinders.

With help from the Institute for Justice, Carole fought back. In October 2014, The New York Times ran a front-page story on her case. That prompted the IRS to announce it would “no longer pursue the seizure and forfeiture of funds associated solely with ‘legal source’ structuring cases.” Less than two months after the Times article was published, federal prosecutors dropped the case against Carole’s cash.

Under the federal Civil Asset Forfeiture Reform Act, property owners who “substantially prevail” in their civil forfeiture cases are entitled to interest as well as attorney’s fees and costs. Considering that she recovered her cash and even sparked a policy shift at the IRS, Carole believed she had “substantially prevailed.” Unfortunately, in 2016, the Eighth Circuit ruled that she did not, and instead held that “a voluntary change on the part of a defendant, even if it resulted in the outcome sought by the plaintiff, ‘lack[ed] the necessary judicial imprimatur’ to authorize a fee award.” With this ruling, the Eighth Circuit upheld a loophole for the government to skip out on paying hefty attorney’s fees to innocent property owners.

But with the Iowa Supreme Court’s decision, owners fighting forfeiture in state court now have an easier time to be made whole than if their exact same case were in federal court. One Des Moines-based forfeiture attorney told the Des Moines Register that the new decision should deter the government from seizing property, since prosecutors “risk not only the return of the property but a significant attorney fee as well.”

“The Iowa Supreme Court’s ruling is another potent reminder that the best way to prevent abusive seizures is to end civil forfeiture once and for all,” said Institute for Justice Senior Legislative Counsel Lee McGrath. “Iowa legislators should follow the lead of counterparts in North Carolina, New Mexico and Nebraska and replace it with criminal forfeiture.”

This post has been updated to include comment from the Pottawattamie County Attorney.

“It Ain’t as Bad As You Think” . ? . It Is As Bad As I Think, and Probably Even Worse

I keep thinking about that.  Being told that it really isn’t as bad as I think.  Hell if it ain’t!

When I was a little girl, we walked to school.  We would get there in the morning, and there would be the morning prayer.  Right after that, we all said I Pledge Allegiance to the Flag, and they played the National Anthem.  I started to school when I was four (4).  By the time I was in fourth grade, it was like the second elementary school.  They did not say the morning prayer, or play the anthem, but by golly, the whole time I was in school, we Pledged Allegiance to the Flag.  We were proud to be Americans.

Now, you get suspended for wearing anything with a flag on it.  The Ten Commandments, Pledge of Allegiance, and anything having to do with our natural heritage is bad.  Christians are bad.  Americans are bad.  Christian Americans must be very, very bad.  And who the hell decided all that?  That is bullshit.  Plain and simple, bullshit.  Since when have other people gone to live in another country, and was allowed to claim they were offended by the customs of that country, and the country changed for the outsiders?  Someone tell me when.  That is bullshit!  Plain and simple bullshit.

Seems like it began several years ago… SuperTarget in our area, told the GoodWill people at Christmas, not to come there any more.  Of course, after that, we never went back to that store, and it closed shortly thereafter.  For some reason, outsiders that had moved to the United States, were offended by Christmas, Nativity scenes, and GoodWill ringing their little bells at Christmas.  Those dedicated, hardworking GoodWill employees, trying to make a difference to others at a very hard time of year.  They never asked anyone for anything.  Just stood, ringing the bell and smiling.  It was tradition.  Christmas trees, nativity scenes, GoodWill.

So, in order to not to offend those, who are not from here, America changed? Bullshit.  I say, if our traditions offends you, you came into this country, you know you can leave the same damned way!  Every time I turn around, someone is explaining that such and such offends them.  Screw it!  I am offended by what people do in other countries, but I don’t move there, then expect them to change their country for me.  That is bullshit.  Plain and simple bullshit.

Now, they tell us that our forefathers were terrorists.  Do what?  So what kind of History lessons are they giving kids now a days?  Speaking of kids.  Since when does the govt. have balls enough to tell parents what they are or not going to feed their kids for lunch during school?  The other thing about kids, is that they belong to the community, not their parents?  Bullshit!  Plain and simple bullshit!  And these idiots put up with that?  I sure as hell am glad that my Mama was who she was.  She would have not only told them what horse to get on, she would have had them direct that horse, on out of the country.  And my Daddy, lo and behold, I am glad that he is not here to see this shit.  Daddy was gung-ho Marine.  He is probably rolling in his grave right now.

And someone wants to tell me, that it ain’t as bad as I think it is?  Bullshit!  Plain and simple bullshit!!!

DeKalb Commissioners Are On A Criminal Roll!

Updated: 4:13 p.m. Tuesday, Aug. 26, 2014 | Posted: 10:11 a.m. Tuesday, Aug. 26, 2014

DeKalb Commissioner Boyer could serve prison time

By Johnny Edwards and Mark Niesse

http://www.ajc.com/news/news/local-govt-politics/criminal-charges-filed-against-former-dekalb-commi/ng82z/

View Larger

Elaine Boyer in federal court sketch photo
Richard Miller
082614 Atlanta: This is a photo copy of an artist rendition of the federal court appearance of DeKalb County Commissioner Elaine Boyer and her court appointed attorney Jeff Brickman into questionable use of taxpayer dollars on Tuesday, August 26, 2014, in Atlanta. By Courtroom artist Richard Miller
DeKalb commissioner resigns amid spending investigation gallery
 

The Atlanta Journal-Constitution

A day after resigning from office, DeKalb County Commissioner Elaine Boyer announced in court Tuesday she would plead guilty to federal charges accusing her of two schemes to pocket tens of thousands of dollars from taxpayers.

Boyer, appearing calm and collected, told a judge she understood what she was doing, but it’s unknown whether she’ll serve time in prison.

U.S. Attorney Sally Quillian Yates said she will seek a prison sentence for Boyer.

“This is a serious crime. She’s cooperating now after she was caught,” Yates said. Boyer’s guilty plea “doesn’t wipe the slate clean.”

Boyer’s attorney, Jeff Brickman, said he’ll ask a judge not to sentence Boyer to prison, although she doesn’t have a plea deal in place. She was to be released without supervision after being photographed and fingerprinted. She could be formally arraigned within 10 days.

A criminal filing earlier Tuesday said Boyer authorized more than $78,000 in county payments to an adviser who submitted false invoices for consulting work but did nothing.

The adviser then funneled about 75 percent of the money, more than $58,000, back into Boyer’s personal bank account, the document alleges. She faced a charge of mail fraud conspiracy for that scheme.

The court documents didn’t name the adviser and no charges apparently have been filed against that person, even though he apparently pocketed about $20,000 in taxpayer money. The documents say Boyer used her share for personal expenses, including purchases at hotels and high-end department stores.

The Atlanta Journal-Constitution was pressing Boyer to explain nearly $90,000 in checks to consultants before she resigned Monday and admitted she had betrayed taxpayers.

Federal prosecutors also accused Boyer of wire fraud for using her county purchasing card to pay for more than $15,000 in personal expenses. From October 2010 to February 2014, Boyer made more than 50 such purchases, prosecutors allege.

The AJC in March revealed that she had been tapping county funds to pay for airline tickets, a ski resort vacation, rental cars and personal cell phone expenses, triggering the federal investigation.

Boyer will have to forfeit any proceeds or property she obtained from the schemes, prosecutors wrote.

Jeff Barnes/Foreclosure Defense Nationwide “New Legal Issues”

NEW LEGAL ISSUES COMING UP IN TRIAL AND APPELLATE COURTS

DECEMBER 16, 2013

With the release of the US Bank admissions per our post of November 6, 2013; the issuance of the opinions from the Supreme Courts of Oregon and Montana holding that MERS is not the “beneficiary”; and recent opinions from various jurisdictions which are now, finally, holding that securitization-related issues are relevant in a foreclosure, a host of new legal issues are about to be litigated in the trial and appellate courts throughout the country. It has taken six (6) years and coast-to-coast work to get courts to realize that securitization of a mortgage loan raises issues as to standing, real party in interest, and the alleged authority to foreclose, and that the simplistic mantra of the “banks” and servicers of “we have the note, thus we win” is no longer to be blindly accepted.

One issue which we and others are litigating relates to mortgage loans originated by Option One, which changed its name to Sand Canyon Corporation and thereafter ceased all mortgage loan operations. Pursuant to the sworn testimony of the former President of Sand Canyon, it stopped owning mortgage loans as of 2008. However, even after this cessation of any involvement with servicing or ownership of mortgage loans, we see “Assignments” from Option One or Sand Canyon to a securitization trustee bank or other third party long after 2008.

The United States District Court for the District of New Hampshire concluded, with the admission of the President of Sand Canyon, that the homeowner’s challenge to the foreclosure based on a 2011 alleged transfer from Sand Canyon to Wells Fargo was not an “attack on the assignment” which certain jurisdictions have precluded on the alleged basis that the borrower is not a party to the assignment, but is a situation where no assignment occurred because it could not have as a matter of admitted fact, as Sand Canyon could not assign something it did not have. The case is Drouin v. American Home Mortgage Servicing, Inc. and Wells Fargo, etc., No. 11-cv-596-JL.

The Option One/Sand Canyon situation is not unique: there are many originating “lenders” which allegedly “assigned” mortgages or Deeds of Trust long after they went out of business or filed for Bankruptcy, with no evidence of post-closing assignment authority or that the Bankruptcy court having jurisdiction over a bankrupt lender ever granted permission for the alleged transfer of the loan (which is an asset of the Bankruptcy estate) out of the estate. Such a transfer without proof of authority to do so implicates bankruptcy fraud (which is a serious crime punishable under United States criminal statutes), and fraud on the court in a foreclosure case where such an alleged assignment is relied upon by the foreclosing party.

As we stated in our post of November 6, the admission of US Bank that a borrower is a party to any MBS transaction and that the loan is governed by the trust documents means that the borrower is, in fact, a party to any assignment of that borrower’s loan, and should thus be permitted to seek discovery as to any alleged assignment and all issues related to the securitization of the loan. We have put this issue out in many of our cases, and will be arguing this position at both the trial and appellate levels beginning early 2014.

Jeff Barnes, Esq., http://www.ForeclosureDefenseNationwide.com

Sentiments of US District Judge, Jed S. Rakoff – We Need More Judges Like This One!

I was reading some information about the financial crisis in this country (USA), and ran across a paper written by US District Court Judge Jed S. Rakoff.  If we had more Judges with the mind of this one, we would not be in nearly as bad a shape as we are in.  I have not yet figured out how the Judges justify allowing foreclosures, when they know for a fact that the Banks and their attorneys are creating fraudulent documents, committing perjury in their Courtrooms, and are breaking so many laws, that it has become the norm…  

Read what Honorable Judge Jed S. Rakoff says:  http://www.ft.com/cms/cb1e43f2-4be6-11e3-8203-00144feabdc0.pdf

11/12/13
Why Have No High Level Executives Been Prosecuted In Connection With The Financial Crisis?
by Jed S. Rakoff
(U.S. District Judge)

Five years have passed since the onset of what is sometimes called the Great Recession. While the economy has slowly improved, there are still millions of Americans leading lives of quiet desperation: without jobs, without resources, without hope.

Who was to blame? Was it simply a result of negligence, of the kind of inordinate risk-taking commonly called a “bubble,” of an imprudent but innocent failure to maintain adequate reserves for a rainy day? Or was it the result, at least in part, of fraudulent practices, of dubious mortgages portrayed as sound risks and packaged into ever-more-esoteric financial instruments, the fundamental weaknesses of which were intentionally obscured?

If it was the former – if the recession was due, at worst, to a lack of caution – then the criminal law has no role to play in the aftermath. For, in all but a few circumstances (not here relevant), the fierce and fiery weapon called criminal prosecution is directed at intentional misconduct, and nothing less. If the Great Recession was in no part the handiwork of intentionally fraudulent practices by high-level executives, then to prosecute such executives criminally would be “scapegoating” of the most shallow and despicable kind.

But if, by contrast, the Great Recession was in material part the product of intentional fraud, the failure to prosecute those responsible must be judged one of the more egregious failures of the criminal justice system in many years.Indeed, it would stand in striking contrast to the increased success that federal prosecutors have had over the past 50 years or so in bringing to justice even the highest level figures who orchestrated mammoth frauds. Thus, in the 1970’s, in the aftermath of the “junk bond” bubble that, in many ways, was a precursor of the more recent bubble in mortgage-backed securities, the progenitors of the fraud were all successfully prosecuted, right up to Michael Milken. Again, in the 1980’s, the so-called savings-and-loan crisis, which again had some eerie parallels to more recent events, resulted in the successful criminal prosecution of more than 800 individuals, right up to Charles Keating. And, again, the widespread accounting frauds of the 1990’s, most vividly represented by Enron and WorldCom, led directly to the successful prosecution of such previously respected C.E.O.’s as Jeffrey Skilling and Bernie Ebbers.

In striking contrast with these past prosecutions, not a single high level executive has been successfully prosecuted in  connection with the recent financial crisis, and given the fact that most of the relevant criminal provisions are governed by a five-year statute of limitations, it appears very likely that none will be. It may not be too soon, therefore, to ask why.

One possibility, already mentioned, is that no fraud was committed. This possibility should not be  discounted. Every case is different, and I, for one, have no opinion as to whether criminal fraud was committed in any given instance.

 But the stated opinion of those government entities asked to examine the financial crisis overall is not that no fraud was committed. Quite the contrary. For example, the Financial Crisis Inquiry Commission, in its final report, uses variants of the word “fraud” no fewer than 157 times in describing what led to the crisis, concluding that there was a “systemic breakdown,” not just in  accountability, but also in ethical behavior. As the Commission found, the signs of fraud were everywhere to be seen, with the number of reports of suspected mortgage fraud rising 20-fold between 1998 and 2005 and then doubling again in the next four years. As early as 2004, FBI Assistant Director Chris Swecker, was publicly warning of the “pervasive problem” of mortgage fraud, driven by the voracious demand for mortgagebacked securities. Similar warnings, many from within the financial community, were disregarded, not because they were  viewed as inaccurate, but because, as one high level banker put it, “A decision was made that ‘We’re going to have to hold our nose and start buying the product if we want to stay in business.’”

Without multiplying examples, the point is that, in the aftermath of the financial crisis, the prevailing view of many government officials (as well as others) was that the crisis was in material respects the product of intentional fraud. In a nutshell, the fraud, they argued, was a simple one. Subprime mortgages, i.e., mortgages of dubious creditworthiness, increasingly provided the sole collateral for highly-leveraged securities that were marketed as triple-A, i.e., of very low risk. How could this transformation of a sow’s ear into a silk purse be accomplished unless someone dissembled along the way?

While officials of the Department of Justice have been more circumspect in describing the roots of the financial crisis than have the various commissions of inquiry and other government agencies, I have seen nothing to indicate their disagreement with the widespread conclusion that fraud at every level permeated the bubble in mortgage-backed securities. Rather, their position has been to excuse their failure to prosecute high level individuals for fraud in connection with the financial crisis on one or more of three grounds:

First, they have argued that proving fraudulent intent on the part of the high level management of the banks and companies involved has proved difficult. It is undoubtedly true that the ranks of top management were several levels removed from those who were putting together the collateralized debt obligations and other securities offerings that were based on dubious mortgages; and the people generating the mortgages themselves were often at other companies and thus even further removed. And I want to stress again that I have no opinion as to whether any given top executive had knowledge of the dubious nature of the underlying mortgages, let alone fraudulent intent. But what I do find surprising is that the Department of Justice should view the proving of intent as so difficult in this context. Who, for example, were generating the so-called “suspicious activity” reports of mortgage fraud that, as mentioned, increased so hugely in the years leading up to the crisis? Why, the banks themselves. A top level banker, one might argue, confronted with increasing evidence from his own and other banks that mortgage fraud was increasing, might have inquired as to why his bank’s mortgage-based securities continued to receive triple-A ratings?  And if, despite these and other reports of suspicious activity, the executive failed to make such inquiries, might it be because he did not want to know what such inquiries would reveal?  

This, of course, is what is known in the law as “willful blindness” or “conscious disregard.” It is a well-established basis on which federal prosecutors have asked juries to infer intent, in cases involving complexities, such as accounting treatments, at least as esoteric as those involved in the events leading up to the financial crisis. And while some federal courts have occasionally expressed qualifications about the use of the willful blindness approach to prove intent, the Supreme Court has consistently approved it. As that Court stated most recently in Global-Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2068 (2011), “The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine of willful blindness hold that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances.” Thus, the Department’s claim that proving intent in the financial crisis context is particularly difficult may strike some as doubtful.

Second, and even weaker, the Department of Justice has sometimes argued that, because the institutions to whom mortgagebacked securities were sold were themselves sophisticated investors, it might be difficult to prove reliance. Thus, in  defending the failure to prosecute high level executives for frauds arising from the sale of mortgage-backed securities, the then head of the Department of Justice’s Criminal Division, told PBS that “in a criminal case … I have to prove not only that you made a false statement but that you intended to commit a crime, and also that the other side of the transaction relied on what you were saying. And frankly, in many of the securitizations and the kinds of transactions we’re talking about, in reality you had very sophisticated counterparties on both sides. And so even though one side may have said something was dark blue when really we can say it was sky blue, the other side of the transaction, the other sophisticated party, wasn’t relying at all on the description of the color.”

Actually, given the fact that these securities were bought and sold at lightning speed, it is by no means obvious that even a sophisticated counterparty would have detected the problems with the arcane, convoluted mortgage-backed derivatives they were being asked to purchase. But there is a more fundamental problem with the above-quoted statement from the former head of the Criminal Division, which is that it totally misstates the law.  In actuality, in a criminal fraud case the Government is never required to prove reliance, ever. The reason, of course, is that would give a crooked seller a license to lie whenever he was  dealing with a sophisticated counterparty.  The law, however, says that society is harmed when a seller purposely lies about a material fact, even if the immediate purchaser does not rely on that particular fact, because such misrepresentations create problems for the market as a whole. And surely there never was a situation in which the sale of dubious mortgage-backed securities created more of a huge problem for the marketplace, and society as a whole, than in the recent financial crisis.

The third reason the Department has sometimes given for not bringing these prosecutions is that to do so would itself harm the economy. Thus, Attorney General Holder himself told Congress that “it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute – if we do bring a criminal charge – it will have a negative impact on the national economy, perhaps even the world economy.” To a federal judge, who takes an oath to apply the law equally to rich and to poor, this excuse — sometimes labeled the “too big to jail” excuse – is disturbing, frankly, in what it says about the
Department’s apparent disregard for equality under the law.

In fairness, however, Mr. Holder was referring to the prosecution of financial institutions, rather than their
C.E.O.’s. But if we are talking about prosecuting individuals, the excuse becomes entirely irrelevant; for no one that I know of has ever contended that a big financial institution would collapse if one or more of its high level executives were prosecuted, as opposed to the institution itself.

Without multiplying examples further, my point is that the Department of Justice has never taken the position that all the top executives involved in the events leading up to the financial crisis were innocent, but rather has offered one or another excuse for not criminally prosecuting them – excuses that, on inspection, appear unconvincing. So, you might ask, what’s really going on here? I don’t claim to have any inside information about the real reasons why no such prosecutions have been brought, but I take the liberty of offering some speculations, for your consideration or amusement as the case may be.

At the outset, however, let me say that I totally discount the argument sometimes made that no such prosecutions have been brought because the top prosecutors were often people who previously represented the financial institutions in question and/or were people who expected to be representing such
institutions in the future: the so-called “revolving door.” In my experience, every federal prosecutor, at every level, is seeking to make a name for him-or-herself, and the best way to do that is by prosecuting some high level person. While companies that are indicted almost always settle, individual defendants whose careers are at stake will often go to trial. And if the Government wins such a trial, as it usually does, the prosecutor’s reputation is made.My point is that whatever small influence the “revolving door” may have in discouraging certain white-collar prosecutions is more than offset, at least in the case of prosecuting high-level individuals, by the career-making benefits such prosecutions confer on the successful prosecutor.  So, one asks again, why haven’t we seen such prosecutions growing out of the financial crisis? I offer, by way of speculation, three influences that I think, along with others, have had the effect of limiting such prosecutions.

First, the prosecutors had other priorities. Some of these were completely understandable. For example, prior to 2001, the FBI had more than 1,000 agents assigned to investigating financial frauds, but after 9/11 many of these agents were shifted to anti-terrorism work. Who can argue with that?  Eventually, it is true, new agents were hired for some of the vacated spots in fraud detection; but this is not a form of detection easily learned and recent budget limitations have only exacerbated the problem.

Of course, the FBI is not the primary investigator of fraud in the sale of mortgage-backed securities; that responsibility lies mostly with the S.E.C. But at the very time the financial crisis was breaking, the S.E.C. was trying to deflect criticism from its failure to detect the Madoff fraud, and this led it to concentrate on other Ponzi-like schemes, which for awhile were, along with accounting frauds, its chief focus. More recently, the S.E.C. has been hard hit by budget limitations, and this has not only made it more difficult to assign the kind of manpower the kinds of frauds we are talking about require, but also has led S.E.C. enforcement to focus on the smaller, easily resolved cases that will beef up their statistics when they go to Congress begging for money.

As for the Department of Justice proper, a decision was made around 2009 to spread the investigation of these financial fraud cases among numerous U.S. Attorney’s Offices, many of which had little or no prior experience in investigating and prosecuting sophisticated financial frauds. At the same time, the U.S. Attorney’s Office with the greatest expertise in these kinds of cases, the Southern District of New York, was just embarking on its prosecution of insider trading cases arising from the Rajaratnam tapes, which soon proved a gold mine of good cases that absorbed a huge amount of the attention of the securities fraud unit of that office. While I want to stress again that I have no inside information, as a former chief of that unit I would venture to guess that the cases involving the financial crisis were parceled out to Assistants who also had insider trading cases. Which do you think an Assistant would devote most of her attention to:  an insider trading case that was already nearly ready to go to indictment and that might lead to a highvisibility trial, or a financial crisis case that was just getting started, would take years to complete, and had no guarantee of even leading to an indictment? Of course, she would put her energy into the insider trading case, and if she was lucky, it would go to trial, she would win, and she would then take a job with a large law firm. And in the process, the financial fraud case would get lost in the shuffle.

Alternative priorities, in short, is, I submit, one of the reasons the financial fraud cases were not brought, especially cases against high level individuals that would take many years, many investigators, and a great deal of expertise to investigate.  But a second, and less salutary, reason for not bringing such cases is the Government’s own involvement in the underlying circumstances that led to the financial crisis.

On the one hand, the government, writ large, had a hand in creating the conditions that encouraged the approval of dubious mortgages. It was the government, in the form of Congress, that repealed Glass-Steagall, thus allowing certain banks that had previously viewed mortgages as a source of interest income to become instead deeply involved in securitizing pools of mortgages in order to obtain the much greater profits available from trading. It was the government, in the form of both the executive and the legislature, that encouraged deregulation, thus weakening the power and oversight not only of the S.E.C. but also of such diverse banking overseers as the O.T.S. and the O.C.C. It was the government, in the form of the Fed, that kept interest rates low in part to encourage mortgages. It was the government, in the form of the executive, that strongly encouraged banks to make loans to low-income persons who might have previously been regarded as too risky to warrant a mortgage. It was the government, in the form of the government-sponsored entities known as Fannie Mae and Freddie Mac, that helped create the fora-time insatiable market for mortgage-backed securities. And it was the government, pretty much across the board, that acquiesced in the ever greater tendency not to require meaningful documentation as a condition of obtaining a mortgage, often preempting in this regard state regulations designed to assure greater mortgage quality and a borrower’s ability to repay.

The result of all this was the mortgages that later became known as “liars’ loans.” They were increasingly risky; but what did the banks care, since they were making their money from the securitizations; and what did the government care, since they  were helping to boom the economy and helping voters to realize their dream of owning a home.

Moreover, the government was also deeply enmeshed in the aftermath of the financial crisis. It was the government that proposed the shotgun marriages of Bank of America with Merrill Lynch, of J.P. Morgan with Bear Stearns, etc. If, in the process, mistakes were made and liabilities not disclosed, was it not partly the government’s fault?

Please do not misunderstand me. I am not alleging that the Government knowingly participated in any of the fraudulent practices alleged by the Financial Inquiry Crisis Commission and others. But what I am suggesting is that the Government was deeply involved, from beginning to end, in helping create the conditions that could lead to such fraud, and that this would give a prudent prosecutor pause in deciding whether to indict a C.E.O. who might, with some justice, claim that he was only doing what he fairly believed the Government wanted him to do.

 The final factor I would mention is both the most subtle and the most systemic of the three, and arguably the most important, and it is the shift that has occurred over the past 30 years or more from focusing on prosecuting high-level individuals to focusing on prosecuting companies and other institutions. It is true that prosecutors have brought criminal charges against companies for well over a hundred years, but, until relatively recently, such prosecutions were the exception, and prosecutions of companies without simultaneous prosecutions of their managerial agents were even rarer. The reasons were obvious. Companies do not commit crimes; only their agents do. And while a company might get the benefit of some such crimes, prosecuting the company would inevitably punish, directly or indirectly, the many employees and shareholders who were totally innocent.   Moreover, under the law of most U.S. jurisdictions, a company cannot be criminally liable unless at least one managerial agent has committed the crime in question; so why not prosecute the agent who actually committed the crime?

 In recent decades, however, prosecutors have been increasingly attracted to prosecuting companies, often even without indicting a single individual. This shift has often been rationalized as part of an attempt to transform “corporate cultures,” so as to prevent future such crimes; and, as a result, it has taken the form of “deferred prosecution agreements” or even “non-prosecution agreements,” in which the company, under threat of criminal prosecution, agrees to take various prophylactic measures to prevent future wrongdoing. But in practice, I suggest, it has led to some lax and dubious behavior on the part of prosecutors, with deleterious results.    

If you are a prosecutor attempting to discover the individuals responsible for an apparent financial fraud, you go about your business in much the same way you go after mobsters or drug kingpins: you start at the bottom and, over many months or years, slowly work your way up. Specifically, you start by “flipping” some lower level participant in the fraud whom you can show was directly responsible for making one or more false material misrepresentations but who is willing to cooperate in order to reduce his sentence, and – aided by the substantial prison penalties now available in white collar cases – you go up the ladder. For a detailed example of how this works, I recommend Kurt Eichenwald’s well-known book The Informant, which describes how FBI agents, over a period of three years, uncovered the huge price-fixing conspiracy involving high-level executives at Archer Daniels, all of whom were successfully prosecuted.

But if your priority is prosecuting the company, a different scenario takes place. Early in the investigation, you invite in counsel to the company and explain to him or her why you suspect fraud. He or she responds by assuring you that the company wants to cooperate and do the right thing, and to that end the company has hired a former Assistant U.S. Attorney, now a partner at a respected law firm, to do an internal investigation. The company’s counsel asks you to defer your investigation until the company’s own internal investigation is completed, on the condition that the company will share its results with you. In order to save time and resources, you agree. Six months later the company’s counsel returns, with a detailed report showing that mistakes were made but that the company is now intent on correcting them. You and the company then agree that the company will enter into a deferred prosecution agreement that couples some immediate fines with the imposition of expensive but internal prophylactic measures. For all practical purposes the case is now over. You are happy because you believe that you have helped prevent future crimes; the company is happy because it has avoided a devastating indictment; and perhaps the happiest of all are the executives, or former executives, who actually committed the underlying misconduct, for they are left untouched. 

I suggest that this is not the best way to proceed. Although it is supposedly justified in terms of preventing future crimes, I suggest that the future deterrent value of successfully prosecuting individuals far outweighs the prophylactic benefits of imposing internal compliance measures that are often little more than window-dressing. Just going after the company is also both technically and morally suspect. It is technically suspect because, under the law, you should not indict or threaten to indict a company unless you can prove beyond a reasonable doubt  that some managerial agent of the company committed the alleged crime; and if you can prove that, why not indict the manager?  And from a moral standpoint, punishing a company and its many innocent employees and shareholders for the crimes committed by some unprosecuted individuals seems contrary to elementary notions of moral responsibility.

These criticisms take on special relevance, however, in the instance of investigations growing out of the financial crisis, because, as noted, the Department of Justice’s position, until at least very, very recently, is that going after the suspect institutions poses too great a risk to the nation’s economic recovery. So you don’t go after the companies, at least not criminally, because they are too big to jail; and you don’t go after the individuals, because that would involve the kind of years-long investigations that you no longer have the experience or the resources to pursue.

In conclusion, I want to stress again that I have no idea whether the financial crisis that is still causing so many of us so much pain and despondency was the product, in whole or in part, of fraudulent misconduct. But if it was — as various governmental authorities have asserted it was –- then, the failure of the government to bring to justice those responsible for such colossal fraud bespeaks weaknesses in our prosecutorial system that need to be addressed.

Jeff Barnes, Esq. On the Ball!

http://foreclosuredefensenationwide.com/?p=533

US BANK ADMITS, IN WRITING FROM THEIR CORPORATE OFFICE, THAT THE BORROWER IS A PARTY TO AN MBS TRANSACTION; THAT SECURITIZATION TRUSTEES ARE NOT INVOLVED IN THE FORECLOSURE PROCESS; HAVE NO ADVANCE KNOWLEDGE OF WHEN A LOAN HAS DEFAULTED; THAT THE “TRUE BENEFICIAL OWNERS” OF A SECURITIZED MORTGAGE ARE THE INVESTORS IN THE MBS; AND THAT THE GOAL OF A SERVICER IS TO “MAXIMIZE THE RETURN TO INVESTORS”                                                                                                                                                                                                 November 6, 2013

 We have been provided with a copy of U.S. Bank Global Corporate Trust Services’ “Role of the Corporate Trustee” brochure which makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower “is not a party to” the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process. The brochure accompanied a letter from US Bank to one of our clients which states: “Your account is governed by your loan documents and the Trust’s governing documents”, which admission clearly demonstrates that the borrower’s loan is directly related to documents governing whatever securitized mortgage loan trust the loan has allegedly been transferred to. This brochure proves that Courts which have held to the contrary are wrong on the facts. 

The first heading of the brochure is styled “Distinct Party Roles”. The first sentence of this heading states: “Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.” MBS is defined at the beginning of the brochure as the sale of “Mortgage Backed Securities in the capital markets”. The fourth page of the brochure also identifies the “Parties to a Mortgage Backed Securities Transaction”, with the first being the “Borrower”, followed by the Investment Bank/Sponsor, the Investor, the Originator, the Servicer, the Trust (referred to “generally as a special purpose entity, such as a Real Estate Mortgage Investment Conduit (REMIC)”), and the Trustee (stating that “the trustee does not have an economic or beneficial interest in the loans”). 

The second page sets forth that U.S. Bank, as Trustee, “does not have any discretion or authority in the foreclosure process.” If this is true, how can U.S. Bank as Trustee be the Plaintiff in judicial foreclosures or the foreclosing party in non-judicial foreclosures if it has “no authority in the foreclosure process”? 

The second page also states: “All trustees for MBS transactions, including U.S. Bank, have no advance knowledge of when a mortgage loan has defaulted.” Really? So when, for example, MERS assigns, in 2011, a loan to a 2004 Trust where the loan has been in default since 2008, no MBS “trustee” bank (and note that it says “All” trustees) do not know that a loan coming into the trust is in default? The trust just blindly accepts loans which may or may not be in default without any advanced due diligence? Right. Sure. Of course. LOL. 

However, that may be true, because the trustee banks do not want to know, for then they can take advantage of the numerous insurances, credit default swaps, reserve pools, etc. set up to pay the trust when loans are in default, as discussed below. 

The same page states that “Any action taken by the servicer must maximize the return on the investment made by the ‘beneficial owners of the trust’ — the investors.” The fourth page of the brochure states that the investors are “the true beneficial owners of the mortgages”, and the third page of the brochure states “Whether the servicer pursues a foreclosure or considers a modification of the loan, the goal is still to maximize the return to investors” (who, again, are the true beneficial owners of the mortgage loans). 

This is a critical admission in terms of what happens when a loan is securitized. The borrower initiated a mortgage loan with a regulated mortgage banking institution, which is subject to mortgage banking rules, regulations, and conditions, with the obligation evidenced by the loan documents being one of simple loaning of money and repayment, period. Once a loan is sold off into a securitization, the homeowner is no longer dealing with a regulated mortgage banking institution, but with an unregulated private equity investor which is under no obligation to act in the best interest to maintain the loan relationship, but to “maximize the return”. This, as we know, almost always involves foreclosure and denial of a loan mod, as a foreclosure (a) results in the acquisition of a tangible asset (the property); and (b) permits the trust to take advantage of reserve pools, credit default swaps, first loss reserves, and other insurances to reap even more monies in connection with the claimed “default” (with no right of setoff as to the value of the property against any such insurance claims), and in a situation where the same risk was permitted to be underwritten many times over, as there was no corresponding legislation or regulation which precluded a MBS insurer (such as AIG, MGIC, etc.) from writing a policy on the same risk more than once. 

As those of you know who have had Bloomberg reports done on securitized loans, the screens show loans which have been placed into many tranches (we saw one where the same loan was collateralized in 41 separate tranches, each of which corresponded to a different class of MBS), and with each class of MBS having its own insurance, the “trust” could make 41 separate insurance claims AND foreclose on the house as well! Talk about “maximizing return for the investor”! What has happened is that the securitization parties have unilaterally changed the entire nature of the mortgage loan contract without any prior notice to or approval from the borrower. 

There is no language in any Note or Mortgage document (DOT, Security Deed, or Mortgage) by which the borrower is put on notice that the entire nature of the mortgage loan contract and the other contracting party may be unilaterally changed from a loan with a regulated mortgage lender to an “investment” contract with a private equity investor. This, in our business, is called “fraud by omission” for purposes of inducing someone to sign a contract, with material nondisclosure of matters which the borrower had to have to make the proper decision as to whether to sign the contract or not. 

U.S. Bank has now confirmed, in writing from its own corporate offices in St. Paul, Minnesota, so much of what we have been arguing for years. This brochure should be filed in every securitization case for discovery purposes and opposing summary judgments or motions to dismiss where the securitized trustee “bank” takes the position that “the borrower is not part of the securitization and thus has no standing to question it.” U. S. Bank has confirmed that the borrower is in fact a party to an MBS transaction, period, and that the mortgage loan is in fact governed, in part, by “the Trust’s governing documents”, which are thus absolutely relevant for discovery purposes. 

Jeff Barnes, Esq.,

http://www.ForeclosureDefenseNationwide.com

Living Lies, Telling It Like It Is! Thank You!

New post on Livinglies’s Weblog

Federal Agent Misconduct in Favor of BofA and McCarthy Holthus and Levine law firm?

http://livinglies.wordpress.com/2013/09/03/federal-agent-misconduct-in-favor-of-bofa-and-mccarthy-holthus-and-levine-law-firm/

by Neil Garfield

HAS FORECLOSURE DEFENSE BECOME A TERROR THREAT?

WHO IS TERRIFIED HERE?

This is a story about abuse of power or abuse of apparent power. The object is to cover-up crimes that remain largely undetected because the complex maze created by the “Thirteen Banks.”The stakes could not be higher. Either the current major Banks will be sustained or they will come crashing down with a feeding frenzy on a carcass of a predator that stole tens of trillions of dollars from multiple countries, hundreds of millions of people, and millions of homes across the world that should, by all accounts under the Law, still belong to the owner who was displaced by foreclosure. The banks are willing to do anything and they are paying outsize fees and other legal expenses (topping $100 Billion now).

The agents involved — Mike Lum from Homeland Security, Tim Hines, FBI Agent, and Sean Locksa, FBI agent — were either moonlighting (the agents say they were acting in their official capacity) and using their badges in appropriately or they were sent to intimidate litigants with Bank of America represented by McCarthy Holthus and Levine. A few years back, I received reports that the law firm, and in particular attorney Levine, had sent letters to local prosecutors to request action against people who were defending their property from foreclosure. The agents admitted to Blomberg today that they received a “tip” and that “it” was “no longer” a criminal manner and that they had ended their investigation.

In one prior case I saw a letter and I believe I might have seen an affidavit signed by Levine. The result was a series of indictments against one individual that were later dismissed. I have no information on the other cases all dating back to around 2010. I know one of the people, the one who I know was indicted, spent the last bit of her money hiring a criminal attorney to defend her. The case was “settled with a dismissal.” She subsequently lost two homes that were previously unencumbered in a foreclosure where different parties stepped in to foreclose than the ones who asked for lift stay in her bankruptcy. None of the parties were creditors or properly identified.

I now believe I have enough information to connect the dots, and raise the question as to whether members of local, federal and state law enforcement are colluding (or are being wrongfully used by the suggestion of false information) with Bank of America and at least one law firm — McCarthy Holthus and Levine — in which litigants and perhaps witnesses are intimidated into submission to wrongful foreclosures. The information contained in this article relates primarily to Arizona and to a lesser degree, California. I have no information on any other such activity in any other state of the union.

It also appears as though Bank of America and McCarthy Holthus and Levine were taking advantage of some sloppiness at the Post Office, for which the Postmaster in Simi Valley has apologized and sent a refund to the complainant, Darrell Blomberg whose story can be read below. The interesting thing here is that Blomberg reports that McCarthy Holthus and Levine directly received a letter that was addressed to Celia Mora, a suspected robo signor who apparently lives in Simi Valley, according to the post office, but whose mail bears a San Diego postmark.

The joint terrorism task force supposedly represented by the three men identified above, will not answer calls relating to this matter. Thus we only have Blomberg’s report and my own information and analysis — and of course public record. We do have a callback received today by Blomberg who reports that the agents answered a limited number of questions.

The information contained in this report is substantially corroborated by another source who, like Blomberg I consider to have the highest integrity and who was also visited this past week by the same agents who visited Blomberg. Since no specific act was alleged in the interviews except the perfectly legal request to the post office to confirm an address of a potential witness and test mailings to see who was receiving the mailings, it is hard to conclude anything other than that these agents were being used officially or unofficially to intimidate litigants who have been successful at defending their homes in foreclosure for years, and to intimidate them into ceasing their factual and investigative help to other homeowners who are also being wrongfully foreclosed.

If these interviews were sanctioned by the terrorism task force, the FBI or Homeland security it clearly represents the use of Federal law enforcement authority for the benefit of gaining a civil advantage — a crime in most jurisdictions. How high the orders went in those organization I do not know. If there were no such orders and these agents were doing a “favor” then they are subject to discipline for misuse of their badge and deliberately misleading the persons interviewed into thinking that this was an official investigation. The agencies involved might be negligent in supervising the activity of these agents. Neither of the sources for this story have any mark on their record except the mark of distinction — one having worked for decades in law enforcement in economic crimes.

Was Darrel Blomberg getting too close to the truth?

In litigation, one of the points raised by Blomberg was that Celia Mora — allegedly signed an affidavit perhaps by herself and perhaps as a robo signor. The issue of forgery didn’t come up. There was a San Diego post mark same day as the affidavit was allegedly signed 160 miles away. Blomberg’s position was Mora had no actual authority no actual executive position or managerial position, and signed clerically under instruction without knowledge of the contents. That is it. The fact that McCarthy Holthus and Levine actually received the letter addressed to Mora through normal postal service leads one to believe that the affidavit may have been created at the law firm and perhaps even signed there in Arizona. Hence any criminal behavior suggested was not the work of Blomberg but could have been the work of the law firm or Bank of America. To my knowledge there is no investigation pending relating to the use of the mails, false documents, improper signatures, lack of authority or any of the issues presented by Blomberg.

From there it became a vague charge of harassment communicated by three Federal Agents. Harassment was the word used by the agents in the interview with Blomberg and the interview with my other source. But no specific act was stated even in passing as to what act would be investigated as harassment, no less a matter of national security. More telling, when the agents left both interviews, neither source was instructed or requested to stop any specific act. That leads to the question, if there was no conduct they sought to stop, why were they there at all?

Note that McCarthy Malthus and Levine has been replaced by the law firm of Bryan Cave since June, 2013 in Blomberg’s case. Generally speaking Greg Iannelli, Esq. handles the more sensitive pieces of litigation that could blow the lid off of the fraudulent scheme of securitization.

Read Blomberg’s account here —> 2013-08-29, Unexpected Visit from the National Joint Terrorism Task Force

Background and analysis: Why do the banks continue to use low paid clerical workers to sign affidavits and other documents for which they obviously lack authority or knowledge? Why won’t a true executive with true authority and actual personal knowledge based upon his or her own actual observation, investigation and analysis to make sure the foreclosure is proper as to the property, the persons, the balance due and the existence of a default — especially with reference to the actual creditor’s books of account?

Convenience doesn’t cover it. With legal costs topping $100 Billion it would be impossible to pass the giggle test on any explanation of convenience when it comes to the paperwork. My conclusion is that it is worth getting embarrassed in court as long as the number of times is small enough that the overall scheme is not toppled. The use of clerical personnel to sign and approve documents relating to foreclosure is akin to allowing teller’s decide whether you can have a loan on that new car or new house. It doesn’t happen. If it doesn’t happen when the “loan” goes out, then it is fair to assume that the same standards would apply when the loan turns bad and comes back in.

Think about it. The Banks are reporting record profits. U. S. Bank reported $42 Billion in just one quarter. They are attributing their profits to proprietary trading — something I have attributed to laundering the illicit retention of funds that should have been used to pay investors the principal and accrued interest that was due on the promise of investment banks when they issued bogus mortgage bonds. That money was received by the Banks as agents for the investors and therefore, whether paid or not, is a credit against the account receivable owned by the investors.

The Glaski appellate attorneys gratuitously admitted that the true owner of the debts will never be known. Yet the true relationship between the homeowners and the lenders is regarded as known and enforceable. In short, the position of the Banks is that we don’t know who this money belongs to but it must belong to someone so we are going to collect it and foreclose. We’ll get back to you later on what we did with the money. The Banks are required to take that idiotic position because (a) it is still working in court and (b) they get to avoid liability to investors, guarantors, insurers, borrowers and government agencies that could exceed $10 trillion. So $100 Billion in legal expenses is only 1% of their exposure. It is easy to see how the Math works. If the legal expenses were a far more significant portion of the money the Banks were holding then they would find another way to deal with it. 

If the false trading and laundering of money was properly entered on the books as merely repatriating money that was hidden, the investors would be spared the losses that threaten our pensions and cities. It would also alleviate or eliminate the corresponding account payable due from homeowners, city budgets and other “borrowers” who were the unwitting pawns in a scheme to defraud investors. The collateral damage to all citizens, all taxpayers, all consumers, all workers and all homeowners has been obvious since 2007.

The extraordinary story is aggravated by the knowledge that the legal expenses of the Banks has now topped $100 Billion. Like I said, think about it. Nobody spends $100 Billion unless it is worth it. It is worth the price because of the amount of liability they are avoiding, and the amount of money they stole that went offshore. The amount of the theft can be estimated in a variety of ways, and the results are always the same. They siphoned trillions of dollars from many countries. In the U.S. alone it appears that the total was in excess of $17 Trillion, which is $3 Trillion MORE than the total amount of lending on residential “loans.” Extrapolating the most recent profit report from U. S. Bank from a quarter (three months) to a year, that one Bank is reporting annual earnings from “proprietary” trading in excess of $160 Billion per year. That is one of 18 Banks that were involved in this crime against humanity. Do the math.

So the Banks retain money that they never legally earned at the expense of deceived investors, Cities and sovereign wealth funds AND at the expense of the “borrowers” in the “underlying” deals. And by not crediting the lenders, the corresponding reduction of the account payable from “Borrowers” is also absent. No consent for principal reduction is required because the balance has also been reduced or extinguished by payment. Follow the money trail and the results was astonish you. This is like organized crime with all the trimmings of governmental complicity.

Now I am reporting that based upon a pattern of conduct that appears particularly egregious in Arizona, this unholy alliance between the people who committed the wrongs and government is becoming apparent. Who would have imagined indictments and “investigations” of people litigating their cases against the Banks after the scale the crime became apparent in 2008-2009?

CAVEAT: The agents in the Blomberg interview insist they were acting in their official capacity and I take them at their word. My problem with that assumption is that it means the system is susceptible of manipulation by attorneys who have no problem playing dirty tricks to gain a civil advantage. Or, worse, it means that there are high level people in the system who are willing to look the other way when this behavior pops up.

By this point in the savings and loan scandal in the 1980’s more than 800 bank presidents and loan officers, along with mortgage brokers and originators had been convicted by a jury and were serving their sentences. This time the tally is zero. But the reverse is not true. Mortgage brokers and originators and investors who played the system against itself have been investigated, prosecuted and sentenced to prison. And even homeowners have been accused of crimes that were identical to the crimes committed by Banks on a much larger scale. Steal a million, go to jail. Steal a Trillion and get immunity because the finance system might not survive removing the criminals from our society. No longer a nation of laws we have become a nation of men, corrupt men, who continue to accumulate wealth and power as they channel their illicit gains into reported Bank “profits” and control over world natural resources.

For about three years I have been investigating an unholy alliance between a law firm, McCarthy Holthus and Levine, Bank of America, U.S. Bank and law enforcement. It appears as though they have some special influence and that local, state and Federal law enforcement agents are acting as collectors and intimidators outside the boundaries of the law. Prosecutors have followed this line of attack against those pro se litigants who are getting close to the truth that the foreclosures — all of them — were bogus, if they were based upon mortgages and deeds of trust carrying claims of securitization, arising from Assignment and Assumption Agreements, Pooling and Servicing Agreements, and false prospectuses to investors.

The attached report from Darrel Blomberg, a person of unparalleled integrity, tells the story of agents from the FBI who (whether they realized it or not) are clearly acting at the behest and for the benefit of Bank of America, who was represented by McCarthy Holthus and Levine. In the past week, the agents have been visiting at least two people based upon a “harassment” allegation. The agents declared themselves to be part of a joint terrorism task force. The act of harassment was a request for confirmation of address and confirmation of address that ended up both in the offices of Bank of America and the office of McCarthy Holthus and Levine. It was addressed to the U.S. Postmaster who apologized for gaffes in processing the requests and even refunded money to Blomberg. No investigation has been threatened by the U.S. Postal inspector against either the Bank or the law firm. And none has been threatened against Blomberg.

Having a few pages of the attempt to get address of a robo signor whose signature appears to have been forged, these agents have interviewed two people in Arizona that have been known to provide factual assistance to other homeowners and whose own cases have been spread out over many years as the Bank continues to fail in its attempt to claim ownership or verify the balance of the debt. These agents identified themselves as having been dispatched from the FBI, Homeland security and the joint task force. Whether they were merely moonlighting or were in fact dispatched by their superiors, it is clear that no criminal matter was under investigation, and that their purpose was to intimidate two people who fortunately are not easily intimidated. Based upon my investigation it appears as though that law Firm, McCarthy, Holthus and Levine who is frequently replaced by Bryan Cave, has been doing dirty work for the banks through contacts in law enforcement.

It is happening and this should be stopped before it becomes a commonplace act throughout the country.

In the final analysis the issue of ownership of the loan is going to unravel this mess because it is only then that we can look at the books of account and see what money is owed on the original account receivable for the creditor/investor/REMIC.

The analysis of ownership does not merely look to the agreements the parties entered into because the label parties give to a transaction does not determine its character. See Helvering v. Lazarus & Co. 308 U.S. 252, 255 (1939). The analysis must examine the underlying economics and the attendant facts and circumstances to determine who owns the mortgage notes for tax purposes. See id. The court in In re Kemp documents in painful detail how Countrywide failed to transfer possession of a note to the pool backing a Mortgage Backed Security (MBS) so that Countrywide failed to comply with the requirements necessary for the mortgage to comply with the REMIC rules. See In re Kemp, 440 F.R. 624 (Bkrtcy D.N.J. 2010). Defendant in this case has done exactly what was adjudicated in Kemp, failure to sufficiently show a timely transfer that complied with the strict language of the trusts’ Agreements.

As the Kemp court notes, “[f]rom the maker’s standpoint, it becomes essential to establish that the person who demands payment of a negotiable note, or to whom payment is made, is the duly qualified holder. Otherwise, the obligor is exposed to the risk of double payment, or at least to the expense of litigation incurred to prevent duplicative satisfaction of the instrument. These risks provide makers (Plaintiff in this case) with a recognizable interest in demanding proof of the chain of title” (specifically referring to the trust participants). 440 B.R. at 631 (quoting Adams v. Madison Realty & Dev., Inc., 853 F.2d 163, 168 (3d Cir. N.J. 1988). And because the originator did not comply with the legal niceties, the beneficial owner of the debt, the trustee, cannot file its proof of claim either. 

Living Lies/Neil Garfield on Georgia

http://livinglies.wordpress.com/2013/03/15/wake-up-georgia-courts-are-opening-the-door-on-wrongful-foreclosure/

http://livinglies.wordpress.com/2013/03/15/wake-up-georgia-courts-are-opening-the-door-on-wrongful-foreclosure/

Wake Up Georgia: Courts Are Opening the Door on Wrongful Foreclosure

Posted on March 15, 2013 by Neil Garfield

PRACTICE AND PROCEDURE IN GEORGIA

If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 (East Coast, including Georgia – the Atlanta Area) and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

The selection of an attorney is an important decision and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Note: For years Georgia has been considered by most attorneys to be a “red” state that, along with states like Tennessee showed no mercy on borrowers because of the prejudgment that the foreclosure mess was the fault of borrowers. For years they have ignored the now obvious truth that the defective mortgages and wrongful foreclosures do make a difference.

Now, reflecting inquiries from Courts below who are studying the the issue instead of issuing orders based upon a knee-jerk response, the State has taken a decided turn toward the application of law over presumption and bias. There is even reason to believe that the door is open a crack for past wrongful foreclosures, as the Courts grapple with the fact that thousands of foreclosures were forced through the system by strangers to the transaction and thousands of wrongful foreclosure suits have been dismissed because of the assumption by judges that no bank would lie directly to the court. It was a big lie and apparently the banks were right in thinking there was little risk to them.

Look at Pratt’s Journal of Bankruptcy Law February/ March Issue for an article on “Foreclosure Law in the Wake of Recent Decisions on Residential Mortgage Loans: The Situation in Georgia” by Ashby Kent Fox, Shea Sullivan and Amanda Wilson. Our own lawyers have out in front on these issues for a couple of years but encountering a lot of resistance — although lately they are reporting that the Courts are listening more closely.

The Georgia Supreme Court has now weighed in (Reese v Provident) and decided quite obviously that something is rotten in Georgia. Focusing on Georgia’s foreclosure notice statute but actually speaking to the substantive defects in the mortgages and foreclosures, the majority held, as a matter of law, that

o.c.G.a. § 44-14- 162.2(a), requires the person or entity conducting a non-judicial foreclosure of a residential mortgage loan to provide the borrower/debtor with a written notice of the foreclosure sale that discloses not only “the name, address, and telephone number of the individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor” (the language that appears in the statute), but also the identity of the “secured creditor” (not required by the statutory language, but which the majority inferred based on legislative intent). the majority further found that the failure to identify the “secured creditor” in the foreclosure notice renders the notice, and any subsequent foreclosure sale, invalid as a matter of law.

Once again I caution litigators that this will not dispose of your case permanently and that such rulings be used strategically so that you are not another hallway lawyer explaining how you were right but the judge ruled against you anyway. Notice provisions can be cured, non-existent transactions cannot be cured. Leading with the numbers (the money trail” and THEN using decisions like this to corroborate your argument will get you a lot more traction than leading with defective paperwork.

As I have said repeatedly, no judge, no matter how sympathetic to borrowers is going to give much relief when the borrower has admitted the debt, note, mortgage and default. These must be denied and lawyers should study up on the subject as to why they can and should be denied, and to persevere through discovery to show that the note, mortgage, default and even the debt have all been faked by strangers to the transaction.

Forcing the opposing side to show that they are a bona fide holder FOR VALUE will flush out the truth — that originator in nearly all cases was never the lender, creditor or even broker. They were simply paid naked nominees just like MERS, leaving no real party in interest on the note or mortgage, no consideration between the parties stated on the note and mortgage or notice of default, and no meeting of minds between the real lender (who is NOT in privity with the nominee lender) who, as an investor received a prospectus and Pooling and Servicing Agreement and advanced money under the mistaken belief they were buying bonds of an entity that either did not exist or was simply ignored by the investment banker and the other participants in the false securitization scheme that was used to cover-up a PONZI scheme.

Practice tips: DENY and DISCOVER. Ask for proof of payment and proof of loss. The assignments, the note and the mortgage are not proof of the debt, they are potentially evidence of the debt and the security agreement ONLY if the foundation is there (testimony by witness with personal knowledge, with exhibits of wire transfer receipts and wire transfer instructions, cancelled checks etc.) to show that the originator shown as payee and “Secured party” or “beneficiary” was lender of money.

Make them show that they booked the loan as a receivable with a reserve for default. Discover that they actually booked the transaction as a fee for service (shown on the income statement) and never entered it on their balance sheet.

And PLEASE study up on voir dire, objections and cross examination. If you are not quick and ready objections to leading questions and other issues might well be waived unless you interrupt the questioning as fast as you can stand up. If you study up on hearsay and the business records exception to hearsay you will discover that in practically no case were the business records qualified as exceptions to the hearsay rule. But if you don’t raise it, if you don’t have statutory and case law and even a memo on the subject the judge is going to rule against you. We are talking about good lawyering here and not bias amongst judges.

FLORIDA FINAL JUDGMENT FINDS BB&T “DOUBLE DIPPING” IN MANUFACTURED FORECLOSURE |

Foreclosure Defense Nationwide – Mortgage Foreclosure Help – Free Advice

http://foreclosuredefensenationwide.com/?p=464

July 30, 2012

A Hillsborough County (Tampa) Florida Circuit Judge has entered a Final Judgment in favor of a borrower, ordering that the loan and all loan documents be reinstated effective back to June 30, 2009 (pre-”default”); that the terms of the loan remain in effect as they would have been as of that date; and that BB&T credit the principal of the Note with all payments received by BB&T from the FDIC and with no payments due from the borrower until BB&T credits all such payments it has received against principal and the parties agree on a new payment schedule.

The May 18, 2012 Final Judgment found that the original lender (Colonial Bank) improperly demanded that the borrower make “curtailment” payments on the loan, basing its demand on the status of other, unrelated loans. Colonial was shut down by the Alabama State Banking Department and the FDIC was appointed as its receiver. The evidence at trial demonstrated that BB&T breached its duties of good faith and fair dealing with the borrowers, and that BB&T was motivated to behave as such due to the terms of a Purchase and Assumption Agreement with the FDIC where BB&T stood to profit by declaring a fraudulent default under the loan, collecting from the FDIC under the Agreement for such default, and then enforcing the loan against the borrowers and retaining the property until a turn around in the real estate market.

The “troubled assets” manager of BB&T (who had been a former Colonial Bank manager) testified that BB&T may have already applied to the FDIC for a loss share payment, and the borrowers’ expert testified that BB&T may have already applied for and received a payment from the FDIC as high as $1,800,000.00. The Court found that BB&T totally failed to credit this potential payment from the FDIC against amounts sought in the litigation, thereby giving the impression that BB&T might be “double dipping” and possibly “triple dipping” if market conditions favorably changed and the property increased in value. The Court concluded that BB&T “committed significant wrongdoing and breached the implied duty of good faith and fair dealing of a financial institution, such that the instant cause of action should be denied in its entirety.”

This Final Judgment supports what we have been requesting in discovery for the past five years: documents related to third party sources of payment against the Note, which evidence goes directly to the amount claimed to be in default. Significant in this decision is the fact that the Court entered judgment for the borrower on the premise that there COULD HAVE BEEN a payment made to BB&T through the Agreement; it was not necessary that a payment actually have been made for the credit to apply.

In securitizations, the documents expressly provide for insurances and credit enhancements (including credit default swaps) to protect against and provide payment on mortgage loans which default. Discovery of these potential sources of payment and amounts is thus more than relevant, as this evidence goes directly to not only the veracity of the amount claimed to be in default, but to claims of breach of duty of good faith and fair dealing as well.

The case is Branch Banking and Trust v. Kraz LLC, Hillsborough County, Florida Circuit Couert Case No. 10-CA-000304-K. We thank one of our dedicated followers for providing this decision to us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

FLORIDA FINAL JUDGMENT FINDS BB&T “DOUBLE DIPPING” IN MANUFACTURED FORECLOSURE | Foreclosure Defense Nationwide – Mortgage Foreclosure Help – Free Advice

Daily Report: Public shut out of Georgia courts

http://www.dailyreportonline.com/PubArticleFriendlyDRO.jsp?id=1202561653020

Public shut out of Georgia courts

R. Robin McDonald

Daily Report

07-03-2012

Judges across Georgia are closing courtrooms to the general public, citing as reasons a lack of space and security concerns.

They are doing so even though the U.S. Supreme Court in January 2010 vacated a Georgia Supreme Court ruling that had upheld the closure of a DeKalb County courtroom and the removal of members of the public during jury voir dire. The U.S. justices said at the time that courtrooms should remain open to the public except in rare circumstances.

Since then, courtroom closures have been challenged in DeKalb, Fulton, Cobb and Towns counties in Georgia’s appellate courts. Two weeks ago, the Southern Center for Human Rights sued the Cordele Judicial Circuit, claiming that its superior court judges are continuing to bar public access to court hearings despite a consent agreement in 2004 that they would stop the practice.

The appellate challenges to closed courtrooms across the state have garnered mixed success, but Judicial Qualifications Commission officials are concerned.
Closing courtrooms, said JQC Chairman John Allen, “could be a violation” of state judicial canons “depending on the set of facts surrounding the closing.”

JQC director Jeffrey Davis told the Daily Report that in his work observing judges in action around the state, he is often met at the courtroom doors by local deputies who ask for his credentials and question why he is there.

“I’ve personally experienced the chill that members of the public would feel,” he said. “I’m a lawyer. It’s not that I’m under-dressed for court.”
Once a member of the public has passed through courthouse metal detectors or security at a courthouse entrance, Davis said, “No citizens should be questioned about the reason they are in a public courtroom.”

But, he continued, “It seems to be the modus operandi around the state for courts to have deputies who question those who are simply in the court without business before the court. People ought to be able to watch their government in action. And justice which is done in secret—or a feeling by those who are coming to the courthouse that somehow they don’t have a right to be there—chills the public’s ability not only to access the courts but also to have confidence in the judicial system.”

DeKalb County
Last year, DeKalb State Court Judge Barbara Mobley resigned her post to end a JQC ethics investigation that included allegations she had interfered with the public’s access to a public courtroom. Mobley posted signs that restricted access to court hearings and directed court personnel to ask court observers to identify themselves and state their business, “thereby chilling the public’s right to observe matters before the court,” according to the JQC’s report to the Georgia Supreme Court.

The Daily Report reported last year that Mobley was one of a number of DeKalb judges who had posted signs on their courtroom doors limiting courtroom access to criminal defendants, their lawyers and alleged victims. The sign on Mobley’s door said, “We do not have space for extra people.”

Allen told the Daily Report last week that after Mobley resigned, he asked the DeKalb judges “to please meet and reconsider their policy of automatically closing their courtrooms as opposed to making a case-by-case decision.”

“Openness of course is such a basic principle of the law in Georgia jurisprudence and U.S. constitutional jurisprudence,” Allen continued. “You erode the confidence in the integrity and fairness of the courts by closing the courts as a matter of course.”

“Ours was just a courtesy call,” he said, “so that the conduct of the court didn’t rise to the level of being egregious.”

Allen said he also reminded the DeKalb bench of the U.S. Supreme Court’s ruling in Presley v. Georgia, 130 S. Ct. 721, which slapped the Georgia Supreme Court for upholding a decision by DeKalb County Superior Court Judge Linda Hunter to close her courtroom during jury selection in a criminal case.

In its ruling vacating the Georgia decision, the U.S. Supreme Court held that the Sixth Amendment right to a public trial extends to the voir dire of prospective jurors and that, “Trial courts are obligated to take every reasonable measure to accommodate public attendance at criminal trials.”

The decision did allow for exceptions, holding that, “The right to an open trial may give way in certain cases to other rights or interests, such as the accused’s right to a fair trial or the government’s interest in inhibiting disclosure of sensitive information.”

But, it stated, “Such circumstances are rare, however, and the balance of interests must be struck with special care. The party seeking to close a hearing must advance an overriding interest that is likely to be prejudiced, the closure must be no broader than necessary to protect that interest, the trial court must consider reasonable alternatives to closing the proceeding, and it must make findings adequate to support the closure.”

Last year, DeKalb Chief State Court Chief Judge Wayne Purdom told the Daily Report that he posted signs limiting access to his courtroom on days when he heard jail pleas, when numerous prisoners were in court or on arraignment days when as many as 100 people might need seats. On those days, he said, members of the public were only admitted “by request.”

While acknowledging that courtroom access “is a public right,” Purdom told the Daily Report that “regulation of entrance to the courtroom is a case-by-case situation.”
Purdom also agreed that signs barring entry might have “a little bit of a chilling effect.” But, he continued, “I think there are limited situations where control of access is appropriate, although keeping the public out is not.”

Fulton challenges
Last month Atlanta attorney Brian Steel argued before the Georgia Court of Appeals that a judge’s decision to close a Fulton County courtroom had violated a criminal defendant’s constitutional rights.

Steel appealed the decision of then-Fulton County Superior Court Judge Marvin Arrington, who in the 2009 rape trial of Corsen Stewart apparently barred the public, including the defendant’s mother, from the courtroom during jury voir dire in a situation nearly identical to the DeKalb closure that led to the U.S. Supreme Court ruling.

Steel, who was not Stewart’s lawyer during the trial, said he took the case on appeal after Stewart’s mother came to see him, told him she had been locked out of the courtroom when attorneys were questioning potential jurors for her son’s case and burst into tears in his office.

In 2010, Steel asked the Georgia Supreme Court to overturn the 2006 Fulton County murder conviction of Travion Reed, basing one argument  on Judge Craig Schwall Sr.’s decision to close the courtroom during the testimony of two witnesses. Prosecutors countered that the courtroom’s closure was warranted because the two witnesses in question feared for their safety. A third witness in the case had been shot a short time after the murder, and a fourth witness had been threatened with a screwdriver in an attack that prosecutors claimed was likely linked to the defendant.

At the time, neither Reid nor his attorney objected. That omission proved critical to the Georgia Supreme Court which—three weeks after its decision in Presley was vacated—affirmed Schwall’s decision to bar public access to his courtroom during the testimony.

Steel did not represent Reed at his trial.

In an opinion written by Justice George Carley, the high court held 6-1 that in order to prevail, Reid “must show that he was prejudiced by counsel’s decision not to object to the brief closing of the courtroom. … Indeed, to hold otherwise would encourage defense counsel to manipulate the justice system by intentionally failing to object in order to ensure an automatic reversal on appeal.”

But Chief Justice Carol Hunstein, the lone dissenting vote, countered that, “No reason was articulated to support closing the courtroom” for the two witnesses when “closure was not sought for others who not only might have been, but actually were, placed in peril because of their testimony.”

“The trial court’s findings were clearly inadequate to support closure of the courtroom,” her dissent stated. “Moreover, the trial court failed to consider any alternatives to closure,” she said.

“Although the majority concludes that Reid has not shown prejudice,” Hunstein concluded, “Reid is not required to do so in order to obtain relief for a structural error which was a violation of the public-trial right.”

Steel said last week that “Prejudice is pretty hard to show when you’re closing a courtroom. It’s an almost unobtainable bar that the Supreme Court set.”
Steel said that in the Stewart appeal he argued before the state appellate court on June 13, “I’m challenging the Reid decision. … It’s primed to have a new discussion about it.”

Fulton County is not the only place where Steel has challenged closed courtrooms. In 2010, Steel also asked the Court of Appeals to overturn a Towns County defendant’s conviction because the judge moved jury selection to a nearby church and barred the public, including the defendant’s wife and daughter, from attending. The Court of Appeals reversed the conviction last March on other grounds without addressing the courtroom closure.

Cordele claims
Last month the Southern Center for Human Rights in Atlanta filed suit against the Cordele Judicial Circuit’s three superior court judges and the sheriffs of Ben Hill and Crisp counties in U.S. District Court in the Middle District of Georgia in Albany, claiming that county court officials are systemically barring the public from criminal court hearings that they say should be open to the public.

Stephen Bright, the center’s president and senior counsel, noted that in 2003, as part of a larger civil rights suit on behalf of the county’s indigent defendants, the Southern Center accused circuit officials of restricting public access to the courts. But Bright said the 2003 suit was dismissed in 2004 after circuit officials promised that courtrooms would remain open.

John Pridgen, chief superior court judge of the Cordele Circuit and a defendant in both suits, has called the 2003 allegations “complete fabrications” claiming, “There was never anything inappropriate about what we did then and what we do now.”

Another Cordele Circuit judge noted in a letter filed with the Southern Center’s complaint that the courtroom in the Crisp County Law Enforcement Center is particularly small, with limited seating.

Southern Center attorney Gerry Weber told the Daily Report last month that the center also has received anecdotal evidence that other courtrooms are being closed “in a lot of different places” across the state and is launching an investigation to determine the extent of the problem.

‘Keeps us free’
Courtroom public access issue came to the fore in Cobb County last year, when former Governor Roy Barnes secured the dismissal of an indictment against the CEO of the Cobb EMC because the grand jury presentments were made inside the new courthouse while its doors were locked and deputies barred access via a separate catwalk entrance.

The Georgia Court of Appeals upheld the indictment’s dismissal in March, ruling that, “The Georgia Supreme Court has held that any failure to return the indictment in open court is per se injurious to the defendant.”

Former Georgia Supreme Court Chief Justice Leah Ward Sears, who dissented in the state Supreme Court’s Presley decision, said in an interview with the Daily Report that the U.S. Supreme Court opinion vacating Georgia’s Presley decision “made it pretty clear … that you cannot, as a matter of policy, close courtrooms.”
In her dissent in Presley, Sears specifically addressed arguments based on lack of space.

“A room that is so small that it cannot accommodate the public,” she wrote, “is a room that is too small to accommodate a constitutional criminal trial.”
But the former chief justice, now a partner at Schiff Hardin, told the Daily Report that judges still may close a courtroom “in very narrow circumstances.” But their reasons  for doing so, “have to be well articulated,” she said. “It has to be on a case-by-case basis … It also has to be a last resort.”

Sears said she doesn’t belittle judges who struggle with issues of space and security.

“That’s what created the majority in the Presley case,” she said. “It wasn’t that the judges felt you should keep people out. They saw what a problem it was in these tiny courtrooms trying to manage things. You get very sympathetic when a trial judge is trying to … keep things secure.”

The issue, she explained, is one of competing values. But to trump the value of open courtrooms, she said, “would take some effort. … Public access is one of the cornerstones of our democracy. It’s what keeps us free.” 

<a href=”http://ad.doubleclick.net/jump/alm.dailyreportonline/;pos=300a;ptype=;tile=2;sz=300×250&#8243; target=”_blank”> <img src=”http://ad.doubleclick.net/ad/alm.dailyreportonline/;pos=300a;ptype=;tile=2;sz=300×250?”></a&gt;


Copyright 2012. ALM Media Properties, LLC. All rights reserved.

Daily Report: Public shut out of Georgia courts

Certified Forensic Loan Auditors, LLC | AG Biden Says $25B Settlement Not the End, Securitization Next

 

AG Biden Says $25B Settlement Not the End, Securitization Next

mortgagenewsdaily.com | May 16, 2012

Delaware Attorney General Beau Biden said recently that the states’ attorneys general need to make it clear that the recent $25 billion settlement with five major banks is the beginning not the end of their enforcement actions.   Biden, speaking on MSNBC’s Morning Joe said the savings and loan crisis cost the economy $168 billion and 1,000 people went to jail.  “This crisis, which was man made,” he said, “cost the economy trillions and I can’t really find anyone who has been held accountable.”

Show co-host Willie Geist asked Biden who he was focusing on, who did he think should be in jail?  Biden said one area he, New York Attorney General Eric T. Schneiderman and others are looking at is the securitization aspect, “whether or not there were false securities, mortgage-backed securities, sold to investors.  That affects borrowers as well.”

He noted that Missouri Attorney General Chris Koster recently indicted DOCX and its CEO Lorraine Brown.  This is relevant, Biden said, because this woman has become famous, on 60 Minutes and so forth, because she signed thousands upon thousands of foreclosure affidavits.  “Chris Costner indicted her for forgery.  That’s the kinds of thing we need to begin to do.”  He said that investigations need to go beyond robo-signing and that people must be held accountable.  “People are angry,” he said.  “Republicans, Democrats, Tea Partiers and 99 Percenters are all angry that no one has been held accountable for something they know is obviously fraught.  And that’s my job as AG.”

Certified Forensic Loan Auditors, LLC | AG Biden Says $25B Settlement Not the End, Securitization Next

R.I.P. Bill of Rights 1789 – 2011

http://www.naturalnews.com/034537_NDAA_Bill_of_Rights_Obama.html

rights

R.I.P. Bill of Rights 1789 – 2011

Sunday, January 01, 2012
by Mike Adams, the Health Ranger
Editor of NaturalNews.com
(See all articles…)

(NaturalNews) One of the most extraordinary documents in human history — the Bill of Rights — has come to an end under President Barack Obama. Derived from sacred principles of natural law, the Bill of Rights has come to a sudden and catastrophic end with the President’s signing of the National Defense Authorization Act (NDAA), a law that grants the U.S. military the “legal” right to conduct secret kidnappings of U.S. citizens, followed by indefinite detention, interrogation, torture and even murder. This is all conducted completely outside the protection of law, with no jury, no trial, no legal representation and not even any requirement that the government produce evidence against the accused. It is a system of outright government tyranny against the American people, and it effectively nullifies the Bill of Rights.

In what will be remembered as the most traitorous executive signing ever committed against the American people, President Obama signed the bill on New Year’s Eve, a time when most Americans were engaged in the consumption of alcohol. It seems appropriate, of course, since no intelligent American could accept the tyranny of this bill if they were sober.

This is the law that will cement Obama’s legacy in the history books as the traitor who nullified the Bill of Rights and paved America’s pathway down a road of tyranny that will make Nazi Germany’s war crimes look like child’s play. If Bush had signed a law like this, liberals would have been screaming “impeachment!”

Why the Bill of Rights matters

While the U.S. Constitution already limits the power of federal government, the Bill of Rights is the document that enumerates even more limits of federal government power. In its inception, many argued that a Bill of Rights was completely unnecessary because, they explained, the federal government only has the powers specifically enumerated to it under the U.S. Constitution. There was no need to have a “First Amendment” to protect Free Speech, for example, because there was no power granted to government to diminish Free Speech.
This seems silly today, of course, given the natural tendency of all governments to concentrate power in the hands of the few while destroying the rights and freedoms of their own people. But in the 1780’s, whether government could ever become a threat to future freedoms was hotly debated. By 1789, enough revolutionary leaders had agreed on the fundamental principles of a Bill of Rights to sign it into law. Its purpose was to provide additional clarifications on the limitation of government power so that there could be absolutely no question that government could NEVER, under any circumstances, violate these key principles of freedom: Freedom of speech, the right to bear arms, freedom from illegal searches, the right to remain silent, the right to due process under law, and so on.

Of course, today’s runaway federal government utterly ignores the limitations placed on it by the founding fathers. It aggressively and criminally seeks to expand its power at all costs, completely ignoring the Bill of Rights and openly violating the limitations of power placed upon it by the United States Constitution. The TSA’s illegal searching of air travelers, for example, is a blatant violation of Fourth Amendment rights. The government’s hijacking of websites it claims are linking to “copyright infringement” hubs is a blatant violation of First Amendment rights. The government’s demand that all Americans be forced to buy private health insurance is a blatant violation of Article 1, Section 8 of the Constitution — the “commerce clause.”
Now, with the passage of the NDAA, the federal government has torpedoed the entire Bill of Rights, dismissing it completely and effectively promising to violate those rights at will. As of January 1, 2012, we have all been designated enemies of the state. America is the new battleground, and your “right” to due process is null and void.

Remember, this was all done by the very President who promised to close Guantanamo Bay and end secret military prisons. Not only did Obama break that campaign promise (as he has done with nearly ALL his campaign promises), he did exactly the opposite and has now subjected all Americans to the possibility of government-sponsored kidnapping, detainment and torture, all under the very system of secret military prisons he claimed he would close!

“President Obama’s action today is a blight on his legacy because he will forever be known as the president who signed indefinite detention without charge or trial into law,” said Anthony D. Romero, executive director of the American Civil Liberties Union.

Obama’s signing statement means nothing

Even while committing an act of pure treason in signing the bill, the unindicted criminal President Obama issued a signing statement that reads, in part, “Moving forward, my administration will interpret and implement the provisions described below in a manner that best preserves the flexibility on which our safety depends and upholds the values on which this country was founded…”

Anyone who reads between the lines here realizes the “the flexibility on which our safety depends” means they can interpret the law in any way they want if there is a sufficient amount of fear being created through false flag terror attacks. Astute readers will also notice that Obama’s signing statement has no legal binding whatsoever and only refers to Obama’s momentary intentions on how he “wishes” to interpret the law. It does not place any limits whatsoever on how a future President might use the law as written.

“The statute is particularly dangerous because it has no temporal or geographic limitations, and can be used by this and future presidents to militarily detain people captured far from any battlefield,” says the ACLU (http://www.aclu.org/blog/national-security/president-obama-signs-inde…).

What this means is that the next President could use this law to engage in the most horrific holocaust-scale mass round-up of people the world has ever seen. The NDAA legalizes the crimes of Nazi Germany in America, setting the stage for the mass murder of citizens by a rogue government.

United States of America becomes a rogue nation, operating in violation of international law

Furthermore, the NDAA law as written and signed, is a violation of international law as it does not even adhere to the fundamental agreements of how nations treat prisoners of war:  “…the breadth of the NDAA’s detention authority violates international law because it is not limited to people captured in the context of an actual armed conflict as required by the laws of war” says the ACLU (http://www.aclu.org/blog/national-security/president-obama-signs-inde…).

In 1789, today’s NDAA law would have been called “treasonous,” and those who voted for it would have been shot dead as traitors. This is not a call for violence, but rather an attempt to provide historical context of just how destructive this law really is. Men and women fought and died for the U.S. Constitution and the Bill of Rights. People sacrificed their lives, their safety and risked everything to achieve the freedoms that made America such a great nation. For one President to so callously throw away 222 years of liberty, betraying those great Americans who painstakingly created an extraordinary document limiting the power of government, is equivalent to driving a stake through the heart of the Republic.

In signing this, Obama has proven himself to be the most criminal of all U.S. Presidents, far worse than George W. Bush and a total traitor to the nation and its People. Remember, Obama swore upon a Bible that he would “protect and defend the Constitution against all enemies, foreign and domestic,” and yet he himself has become the enemy of the Constitution by signing a law that overtly and callously nullifies the Bill of Rights.

This is nothing less than an act of war declared on the American people by the executive and legislative branches of government. It remains to be seen whether the judicial branch will go along with it (US Supreme Court).

Origins of the Bill of Rights

The Bill of Rights, signed in 1789 by many of the founding fathers of our nation, was based on the Virginia Declaration of Rights, drafted in 1776 and authored largely by George Mason, one of the least-recognized revolutionaries who gave rise to a nation of freedom and liberty.

Mason was a strong advocate of not just states’ rights, but of individual rights, and without his influence in 1789, we might not even have a Bill of Rights today (and our nation would have slipped into total government tyranny all the sooner). In fact, he openly opposed ratification of the U.S. Constitution unless it contained a series of amendments now known as the Bill of Rights

(http://en.wikipedia.org/wiki/George_Mason)
SECTION ONE of this Virginia declaration of rights states:  “That all men are by nature equally free and independent and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.”

(http://www.constitution.org/bcp/virg_dor.htm)
Section Three of the declaration speaks to the duty of the Citizens to abolish abusive government:

“That government is, or ought to be, instituted for the common benefit, protection, and security of the people, nation, or community; of all the various modes and forms of government, that is best which is capable of producing the greatest degree of happiness and safety and is most effectually secured against the danger of maladministration; and that, when any government shall be found inadequate or contrary to these purposes, a majority of the community hath an indubitable, inalienable, and indefeasible right to reform, alter, or abolish it, in such manner as shall be judged most conducive to the public weal.”

By any honest measure, today’s U.S. government, of course, has overstepped the bounds of its original intent. As Mason wrote over 200 years ago, the People of America now have not merely a right but a duty to “reform, alter or abolish it,” to bring government back into alignment with its original purpose — to protect the rights of the People.

Obama violates his Presidential Oath, sworn before God

Article II, Section I of the United States Constitution spells out the oath of office that every President must take during their swearing in:  “I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”


In signing the NDAA law into office, Obama has blatantly and unambiguously violated this sacred oath, meaning that his betrayal is not merely against the American people, but also against the Divine Creator.

Given that the Bill of Rights is an extension of Natural Law which establishes a direct heritage of sovereign power from the Creator to the People, a blatant attack upon the Bill of Rights is, by any account, an attack against the Creator and a violation of universal spiritual principles. Those who attempt to undermine the Bill of Rights are attempting to invalidate the relationship between God and Man, and in doing so, they are identifying themselves as enemies of God and agents of Evil.

Today, as 2012 begins, we are now a nation led by evil, and threatened with total destruction by those who would seek to rule as tyrants. This is America’s final hour. We either defend the Republic starting right now, or we lose it forever.

R.I.P. Bill of Rights 1789 – 2011

L. Randall Wray: The $7 Trillion Question That Haunts Banks

 

L. Randall Wray

Professor of Economics and Research Director of the Center for Full Employment and Price Stability, University of Missouri–Kansas City

 

The $7 Trillion Question That Haunts Banks

Posted: 03/16/2012 4:09 pm

I’ve been writing about the MERS monster since 2010. Here is one of my early pieces.

I suppose it is now safe to reveal that a staffer of Representative Marcy Kaptur put me on the trail of this fraud — in dollar terms it has to be the single biggest fraud in human history. In sheer utter disregard for law, it is certainly the most audacious fraud in Western history. To tell the truth, I had never heard of MERS until she called. If you recall the Michael Moore movie, Rep. Kaptur stood on the steps and told homeowners facing foreclosure to stay in their homes. She was right: the banksters have no legal claim on the homes they are foreclosing. Foreclosure is theft. Any bank that used MERS has no legal claim on property — there are 65 million such mortgages to which no bank has a legal claim to foreclose.

And, to be sure, even those mortgages that were not run through MERS are suspect if they are handled by any of the five biggest servicers. These servicers keep such shoddy records that they cannot be trusted to accurately credit payments. They’ve been adding on fees and penalties that were unwarranted since they cannot keep track of records.

Folks, there are $7 trillion of securitized mortgages. It was (mostly) the securitization process that demanded fraud. Securitization could never have been profitable — it was a flawed way to go about financing homeownership. It was simply too expensive to compete with Jimmy Stewart thrifts. It required fraud to show profits. (As Bill Black always says: fraud is a sure thing. It is always the most profitable way to run a business — until you get caught.)

In addition to the MERS monster, we also know the securities did not meet the “reps and warranties” claimed. The banks that did the securizations will continue to get sued to take back bad mortgages. They are trying to shovel as many of these back to Fannie and Freddie as they can so that Uncle Sam will take the losses — as discussed in my previous blog they are now doing it through sale of servicing rights.

And of course Uncle Ben has helpfully put a lot of them on the Fed’s balance sheet. This is all part of the cover-up to avoid the obvious: all these big banks are massively insolvent as soon as the courts wake up to the fact that the whole damned real estate finance onion is layer upon layer of fraud.

But let us stick to the MERS fraud.

There should be an immediate and complete halt to all foreclosures in the US, and all foreclosures that have been completed over the past decade should be nullified. Yes that will get messy. But continuing with foreclosures will make the mess immeasurably worse. This foreclosure crisis is not going to stop.

No one should buy any bank-owned real estate because it is probable that eventually the US will return to the rule of law. The property will be returned to the rightful owners — those who were illegally kicked out of their houses.

Now that might be a pipe dream, but if the US is not going to be a nation ruled by law then it will not survive.

The biggest banks — including the GSEs — created MERS and proceeded to destroy our nation’s real estate property law. That is not an overstatement. Robo-signing is just one small and inevitable consequence of the fraud. The truth is that foreclosure cannot go through without fraud because the banks do not have the documents to show clear title.

Banks don’t have them because they do not exist.

There are no records because that was MERS’s business model: destroy all records of ownership while speeding the securitization process.

And since the mortgages themselves were often frauds (designing “affordability products” that homeowners could not afford), many would end in delinquency. So MERS was designed to speed the foreclosure process — it would be so much easier to foreclose if you didn’t bother with documents, records, and property law. Just kick the owners out, take the home, sell it, and reboot the whole scam again.

Another whistleblower has come forward, this one from CBO. Lan Pham was fired because she refused to get with the program: the government is supposed to help the banksters cover up their frauds, NOT expose them! She refused. So she was fired. Now she tells her story.

I won’t repeat her entire story — you can read it at Zerohedge. Here are a few quotes from Lan Pham, the CBO whistle-blower:

I was repeatedly pressured by the CBO Assistant Director, Deborah Lucas… to not write nor discuss issues in the banking sector and mortgage markets that might suggest weakness in these sectors and their consequences on the economy and households…

…Issues at the heart of the foreclosure problems pertain to securitization….and the Mortgage Electronic Registration System (MERS), which purports to have legal standing on electronic records of ownership on about 65 million…mortgages… MERS…facilitated Wall Street’s ability to expedite the pooling of subprime mortgages into MBSs by bypassing standard ownership transfer procedures as the housing bubble escalated…

The implications have profound financial and economic consequences that would be of compelling interest to Congress and the public, but the CBO sought to silence a discussion of such risks, that in reality have been materializing. These risks put into question the ability of investors or bondholders to make claims on the collateral (the homes) that underlies trillions of dollars in MBSs, the bulk of which are now guaranteed by …Fannie Mae and Freddie Mac. This affects $10 trillion in residential mortgage debt outstanding, of which $7 trillion in mortgage-backed securities (MBSs)…

The CBO dismissing such issues prevents an analysis of the risks, so that the public may be forced again to shoulder the consequences for which they have not been a given a voice or a choice.

Essentially, the chain of title on securitized mortgages appears broken, whether or not there is a foreclosure. This would pertain to most homebuyers in the past 10 years as most mortgages were securitized by Fannie Mae and Freddie Mac providing the guarantees, and the largest banks (“The $7 Trillion MBS Problem – Foreclosure Problems and Buybacks”). Recall that these same entities founded MERS, which expedited securitization and purported to have foreclosure authority from its electronic records of ownership on about 65 million mortgages. “Robo-signing” emerged as fraudulent or defective documents were used or created to establish the legal authority to foreclose as MERS faced legal challenges; as of July 22, 2011, foreclosures could no longer be initiated in MERS’ name. At last year’s pace, some figures suggest it could take lenders in New York 62 years to clear their foreclosure inventory, 49 years in New Jersey and a decade in Florida, Massachusetts, and Illinois.

It is unclear how the recent State attorney generals’ agreement to a proposed yet unpublished terms of the $25 billion robo-signing settlement would repair the chain of title issues that continue to mutate. In January 2011, the Massachusetts Supreme Judicial Court reversed the foreclosure actions of two banks for lacking proof of clear title, followed by a decision in October 2011 that a buyer who purchased a house that was improperly foreclosed upon does not make the buyer the new owner of the house; the sale does not transfer the property.

A striking little mention fact of the Massachusetts foreclosure case was that the lenders could not show that the two mortgages were part of the securitization pool. Let’s consider a thought exercise. Others have the raised the question: if the entity that has been taking the homeowners’ mortgage payments is not the real owner, what happens when the true owner(s) of the mortgage shows up? Are homeowners on the hook again for those ‘missed’ mortgage payments? It was not uncommon for mortgages to be sold multiple times, and it is my understanding that loans were intentionally not given unique identifiers as it moved from origination or purchase through to securitization.

This is what I’ve been arguing since 2010. This will not go away — no matter how much the Administration, the Congress, and the banks try to cover it up.

Cross-posted from EconoMonitor

L. Randall Wray: The $7 Trillion Question That Haunts Banks

FBI Chief Describes GPS Problems Created By Supreme Court Ruling

INVESTIGATORS CONNECT Group News | LinkedIn

Written by Pursuit Wire|03/12/2012|0 Comments

Filed in: Law Enforcement, Legislation, Technology

You remember that one court ruling that forced the FBI to shut down every GPS receiver they currently were using to track their suspects? well, one of the problems was that the FBI was unable to find the transmitters. But the same Supreme Court ruling that bars police from installing GPS technology to track suspects without first getting authorization for a judge is creating more “financial” problems for the FBI.

The agency has been forced deactivate its GPS tracking devices in some investigations, FBI director Robert Mueller said Wednesday.

Mueller told a congressional panel that the bureau has turned off a substantial number of GPS units and is using surveillance by agents instead.

“Putting a physical surveillance team out with six, eight, 12 persons is tremendously time intensive,” Mueller told a House Appropriations subcommittee. The court ruling “will inhibit our ability to use this in a number of surveillances where it has been tremendously beneficial.”

The Supreme Court voted unanimously in favor of the measure in January

 

Full story on CBS DC:  http://washington.cbslocal.com/2012/03/07/fbi-chief-describes-gps-problems-created-by-supreme-court-ruling/

The Soldier Accused of Leaking Military Cables to WikiLeaks Is in Court Right Now « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

19 Dec 2011 at 5:09 PM

The Soldier Accused of Leaking Military Cables to WikiLeaks Is in Court Right Now

By Christopher Danzig

The former military intelligence analyst accused of leaking hundreds of thousands of documents to WikiLeaks has spent the last four days in a Maryland military court, undergoing a hearing to determine whether or not his case will proceed to court-martial.

For those new to the party, 24-year-old Bradley Manning is accused of committing the biggest security breach in American history. He has been in detainment for the last 19 months, and he faces a multitude of military charges.

The Article 32 hearings, which began on Friday, are something akin to grand jury proceedings in civilian court. At the end, Investigating Officer Colonel Paul Almanza, an Army Reserve officer and Justice Department prosecutor, will decide recommend whether Manning’s case will proceed to court-martial.

So far, the hearings have been interesting to say the least. Let’s see what’s going on….

Kim Zetter at Wired’s Threat Level is blogging extensively about the hearings (and tweeting some color commentary from court):

Manning, who turned 24 Saturday, is charged with 22 violations of military law and faces possible life imprisonment. Manning, who at the time was an Army intelligence analyst, is accused of abusing his access to classified computer systems to leak diplomatic cables, Iraq and Afghanistan action reports and the so-called Collateral Murder video to WikiLeaks. In chat logs published by Wired, Manning allegedly told Lamo that he leaked the documents as an act of political protest against a corrupt system and the he snuck files out of a shared workroom using rewritable CDs labeled with pop stars names, such as Lady Gaga.

One of the bigger revelations from the hearings is that the government produced chat logs from Manning’s own computer, where the soldier allegedly discussed leaking the cables. The messages had previously been made public, but Julian Assange and other Manning supporters claimed the chat messages could have been fabricated. Because the government found the logs on Manning’s own computer, forgery seems less likely.

The hearings have been understandably tense. Manning has a lot of supporters in the technology community. Although he has spent the last year and a half in custody, many say he is a whistleblower, not a traitor.

Back in April, more than 250 legal scholars signed a letter protesting the way the Justice Department was treating Manning. In the letter, signatories including Harvard Law professor Laurence Tribe protested Manning’s “degrading and inhumane conditions.” The letter called the military’s conduct illegal and unconstitutional.

On Friday, the hearing started with a bang when defense attorneys accused Investigating Officer Colonel Almanza (the equivalent of a judge in the case) of bias, because of his work as a Justice Department prosecutor. The defense unsuccessfully asked Almanza to recuse himself. (Hmm, I wonder where we’ve seen that before?)

Earlier today, retired lieutenant and prominent Don’t Ask Don’t Tell activist Dan Choi told Politico he was wrestled to the ground and handcuffed while trying to attend the hearing.

Zetter reported another dramatic moment on Sunday, which reads like something out of A Few Good Men:

Proceedings in the court this morning continued in a contentious manner between defense attorney Coombs and the proceeding’s equivalent of a judge, Investigating Officer Capt. Paul Almanza. At one point, when the IO tried to stop a line of questioning with a witness, questioning the relevancy. Coombs abruptly walked to the defense table and grabbed a book containing Article 32 procedural rules and brandished it to Almanza.

“I would caution the investigating officer as to case law,” he said, adding that the defense should be given wide latitude in questioning to obtain evidence.

“The IO should not arbitrarily limit cross-examination, ” he said. “I am not going off into the ozone layer about this. . . I should be allowed to ask questions about what this witness saw so I can have this testimony under oath as part of discovery.”

Zetter reports that the defense is trying to show that the Army should have responded better to behavioral problems Manning exhibited early in his enlistment. He should have never been deployed, or he should have lost his security clearance earlier, “both of which would have made it impossible for him to obtain the documents he allegedly leaked to WikiLeaks.”

So which is it? Traitor or courageous hero? Should the government put him in jail and throw away the key, or throw him a parade?

Army Arrested Manning Based on Unconfirmed Chat Logs [Threat Level / Wired]
DADT activist Dan Choi barred from Bradley Manning hearing [Politico]
Request for Recusal Denied in Case Against Manning [Associated Press]


Christopher Danzig is a writer in Oakland, California. He covers legal technology and the West Coast for Above the Law. Follow Chris on Twitter @chrisdanzig or email him at cdanziggmail.com. You can read more of his work at chrisdanzig.com.

The Soldier Accused of Leaking Military Cables to WikiLeaks Is in Court Right Now « Above the Law: A Legal Web Site – News, Commentary, and Opinions on Law Firms, Lawyers, Law School, Law Suits, Judges and Courts

Bout Time GA Had a Decent Judge’s Ruling, I was Fixing to Give Up On the Idea!

 

http://stopforeclosurefraud.com/2011/11/14/phillips-vs-u-s-bank-judge-dennis-blackmon-nails-us-bank-in-georgia-on-hamp-wrongful-foreclosure-and-emotional-distress-damages/

 

Nye Lavalle, We Applaud You for Your Efforts to Expose Robo-Judges Signing Robo-Orders!!!

 

Message for My Friends & Colleagues –From: Nye Lavalle

Sent: Friday, October 28, 2011 3:50 PM
Please Read Entire Email

NOTE: to all blogs!!!

     Please post the email to the AGs, I wrote last week that I did not send you. I wrote them in confidence.       

       However, since they have failed to act and respond I think the way to get to them AND GET RESPONSES AND ACTION is to publicly publish all my warnings and my letters so there is a VERY public record of notices and warnings to them.

    They may wish to ignore me again, but I and hopefully each of YOU, won’t let them! So, please read You may also publish and post, separately, my letter attached to FHFA’s OIG.

Dear friends,

I am taking the gloves off, its that time! Attorney General Beau Biden did us all proud and right yesterday, despite the political reality that he faces in a state that hosts as corporations, the banks, Wall St. firms, and system he is attacking. I would ask that each of you kindly read the entirety of this letter and to assist me help each of you and this nation of ours and force the other AGs and elements of our government and the media to be as bold and brave as Beau Biden!

Beau knows MERS! LOL He certainly not only vindicated me and my decade-old fight against MERS and my predictions, but all of us, especially Max, April, Judges Logan and Gordon (would love to interview each now) and let me not forget our favorite jurist, Judge Schack!

Let us not forget the crooked judges too, like Craig Schwall and Louis Levenson in Fulton Co who will be getting their comeuppance next month in both courts of law and public opinion (the media). We need to have media focus on the Judges who get it and the judges we have evidence of corruption on. (including our tapes) This will be one of our new objectives. We also need to expose Robo-Judges™ who issue Robo-Orders™!

We’re starting a new movement in America. Our new movement will complement the Occupy Wall Street and Occupy the Internet movements by assisting those trying to help or most importantly IGNORING TO HELP our nation and states. That is the media who is trying to help and some in government like Beau Biden. The other AGs and regulators that ignore us will be publicly noticed and later publicly embarrassed if they fail to act, since a “record” of notices, warnings, and actions or inactions will be publicly displayed now and for the years to come that anyone can access. We shall begin with Names!!

The name for these new movements shall be Occupy The Government & Occupy The Media! As for the media, we shall and I request that you respect their time and their space.

The first step is that I want each of you to provide me, Lisa, Michael, Matt and everyone of our colleagues and comrades in arms with an email list of ALL media and government contacts you have in two separate email address books for Outlook or AOL. We will then discuss content to send by each of us to these contacts. For the media, we will target great story ideas for each journalist and editor we have befriended and has supported the cause. We will also provide a host of information, facts, and evidence for their investigative needs. The media is not only our friend, but our greatest ally in this movement, next to the Internet!

For government, we will create letters and petitions and forward to them in masse! Also, we will document and forward complaints, and evidence of fraudulent bank behavior. They are either with us, or against us! They get to choose and so do we, by a vote. It’s time to stop picking leaders by social issues, but real life issues. You’re either a bank bitch and for them or you’re not (like Beau).

I want to do to the AGs, all regulators, and politicians, what I did to CEOs and boards years ago, paper them and “put them on notice” to act. Let’s see if they ignore our warnings this time around since doing so, will surely jeopardize their political and/or professional aspirations. As they move up the political food chain, we will have a record of what they were warned of and what they did or didn’t do so that their prior actions can be judged by voters and regulators alike.

I am reminded of Gandhi’s quote “First they ignore you, then they laugh at you, then they fight you, then you win.” We’re now winning, so it’s time to pile in on as the bankster’s lawyers would say. Over the years, I have created a “hit list” and “target list” of enemies and foes and have guarded carefully very personal information about them. While information is power, knowledge of what to do with that information, and the wisdom to know when its right to use, is key. I suggest you each do the same!

Next, I will begin writing more letters and more warnings based on my experience and I will start doing some polling with the help of supporters and sponsors I will seek from law firms. This will accomplish a few goals. First, it will bring national media attention and coverage to the issues and second, media attention, business and leads to the law firms than sponsor my research. My research has traditionally garnered national media attention and the front pages of virtually every newspaper as well as television and radio. It will once more, do so again.

As for Beau Biden, his complaint is a masterpiece and must read and pins the tail on the ASS (sorry, Donkey was way too kind) so to speak in MERS. In effect, he is not only seeking to shut down every MERS foreclosure in DE, but seeking to foreclose on MERS itself! I wonder what ASSet protection MERSCORP and its enablers have in place.

I have previously called the racketeering acts of the servicers the “default servicing enterprise.” However, Beau kept it simple and called it the “foreclosure enterprise.” I agree. From this day forward, when we discuss or refer to this racketeering enterprise, let’s all agree to call it and refer to it as the FORECLOSURE ENTERPRISE! Let’s get that mantra up and explain it for what it is, an enterprise which is key for RICO actions, both state and federal, which is where we will be going next with the evidence we have all uncovered. Make Foreclosure enterprise as widely known and accepted as robo-signing and fraudclosure!

In his complaint and his exhibits, Beau Biden has laid the foundation for attacking MERS and every lender. In every case where MERS is ANYWHERE in the chain (current or prior loans) you must file his complaint and exhibits with the court with a notice for the Court to take “judicial notice” of the complaint. Next, you must also file all of the county recorder lawsuits. Remember, building a record is the most important thing you can do in a case. This is how we will also expose the corrupt judges we have evidence on. An analysis of their record and rulings will assist media and also how we vote them out. We shall approve and disprove of judges and politicians and make our voices known, regardless of party affiliation. We will make them sign pledges and contracts, so we know where stand.

We will get our friends in person, email, and on Facebook, to work with us, petition, send emails, make phone calls and focus attention on issues and those who fight and oppose us. We will gather lists of names too and personal and email addresses for protesters.

Our first petition will be the abolishment of MERS and I am drafting Lisa Epstein to create the first draft using the relief that Beau seeks in his lawsuit to be the first petition of our group. Lisa, please copy me, Jacqs, April, Dan, and Max on it and we’ll get out soon!

Friends, its time! 2012, the Mayans predicted would be the end of the world “as we know it!” I’m reminded of the song “its the end of the world as we know it, its the end of the world as we know it. If we believe and act, we can do it! I know we can and i know we will!

It’s time my friends, time to get immediate attention and use the legal strategy the the banks and foreclosure mills created called “piling on” after football piling on. Let’s get to the media, get to the government, get to judges, and get to the people. Let’s Occupy Government and The Media and take control of the destiny God has given each of us! 2012 is upon us. The Mayans were right, its the end of the world as we know it, and the start of a new world, not new world order, as we desire and want it to be free of banks, political influence, and corruption!

Nye

Utah Supreme Court

Pyper v. Bond

http://law.justia.com/cases/utah/supreme-court/2011/20091025-11.html

Docket: 20091025
Opinion Date: July 29, 2011

Judge: Durrant

Areas of Law: Commercial Law, Consumer Law, Trusts & Estates

David Pyper hired attorney Justin Bond to represent him in a probate matter. Bond’s law firm subsequently sued Pyper to obtain payment of the attorney fees. The district court entered a judgment in favor of the law firm for $10,577. To satisfy the judgment, Bond filed a lien against a house owned by Pyper that was worth approximately $125,000. Bond was the only bidder at the sheriff’s sale auctioning Pyper’s home and purchased Pyper’s home for $329. Pyper later communicated his desire to redeem his property to Dale Dorius, another attorney at the firm, but was unable to speak to Bond after several attempts. After the redemption period expired, the deed to Pyper’s home was transferred to Bond. Pyper subsequently filed a petition seeking to set aside the sheriff’s sale of his property. The district court set aside the sheriff’s sale. The court of appeals affirmed. The Supreme Court affirmed, holding the court of appeals did not err in (1) concluding that gross inadequacy of price together with slight circumstances of unfairness may justify setting aside a sheriff’s sale and (2) affirming the district court’s conclusion that Bond and Dorius’s conduct created, at least, slight circumstances of unfairness.

http://j.st/cZN