October 14, 2010

Robert S. Mueller III
Federal Bureau of Investigation
935 Pennsylvania Avenue, NW
Washington, DC 20535

Robert O’Neill
U.S. Attorney
Middle District of Florida
400 North Tampa Street, Suite 3200
Tampa, FL 33602
Dear U.S. Attorney O’Neill and Director Mueller,

When it comes to foreclosures, there is mounting evidence of a state of rampant lawlessness in Central Florida. There are increasing signs that big banks routinely evade laws meant to protect homeowners, in many well-documented cases of ‘foreclosure fraud.’ Despite the demonstrated existence, for instance, of ‘robosigners’ signing affidavits attesting to documents that they have never seen, the parties engaging in such misconduct are not being brought to justice. Big banks are mischaracterizing this as mere ‘technical problems,’ and apologizing only where there is clear and very public evidence of harm.

It is not enough for big banks only to apologize for fraud, perjury, and even breaking and entering – when they are caught. It is time for handcuffs. Fraud does not become legal just because a big bank does it.

On September 20, 2010, after my office found evidence of systemic foreclosure fraud perpetrated by big banks and foreclosure mills, I called for a halt to illegal foreclosures.

Since then, big banks such as Bank of America, JP Morgan Chase, GMAC, PNC and others have suspended foreclosures or foreclosure sales. These banks are still claiming that the massive fraud they have perpetrated amounts to nothing more than a series of technical mistakes. This is absurd. This is deliberate, systemic fraud, and it is a crime.

To give but two of the many available examples, attached is a deposition from an ex-employee of one of the largest ‘foreclosure mills’ in the state, the Law Offices of David Stern. In it, this employee testifies under oath that it was routine for that office to falsify documents regarding military records, in order to move foreclosure cases along more quickly.

The local media has reported on the case of Nancy Jacobini; a contractor for JP Morgan Chase broke into her home after the bank mistakenly foreclosed on it. JP Morgan Chase ‘apologized’ for terrifying her. But , US ; we have a system of laws. I am writing to ask you to enforce them.

The organized and systematic manufacturing of falsified documents to deprive people of their homes is not only a threat to the integrity of the legal system. It also aggravates and extends the weakness in the housing market. Who is going to feel comfortable buying a home if a big bank can simply take it, whether or not that bank has a right to it? Given the securitization of mortgage-backed securities, this misconduct is a threat to our securities markets as well. But fundamentally, this is a question of protecting basic
property rights – if you don’t own it, then you shouldn’t try to take it. Without clear property rights, and a legal system that insists on clear proof of those rights before transferring ownership by force, the economy will fall apart.

If perpetrators of perjured affidavits and other systematic criminal activity can get off simply with civil liability – or even less, an insincere bureaucratic apology – the freedom that Americans enjoy will erode quickly in the face of lawless seizures of property. I appreciate your work on the joint Middle District of Florida’s Mortgage Fraud Initiative, and respectfully request that the efforts of your offices turn towards reining in this rampant criminality.


Alan Grayson

Member of Congress

Category: Foreclosures, Legal

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

28 Responses to “Grayson to FBI: Prosecute The Frauds”

  1. jmoharris says:

    It will be interesting to see how The Fed / Congress / Obama administration bend over the US tax payer once again to save the TBTF’s from the TBTF’s decade long fraud.

    I really appreciate Grayson. But he must be smoking some strong ganja if he thinks anyone will actually be prosecuted.

  2. jmoharris says:

    “But he must be smoking some strong ganja if he thinks anyone will actually be prosecuted.” I take that back. Actually we will likely see prosecution of some ex-hairstylists and ex-WalMart floor workers (the Big Fish):


  3. doug says:

    Grayson is willing to tell it like it is and is somewhat a loose cannon, which I appreciate. He may not accomplish much, but he is trying to bring out the truth. I salute him and support him for his efforts.

  4. franklin411 says:

    I agree. There should be criminal prosecutions, but I fear the ones who will actually do the time or pay the fines will be the poor, innocent schmucks who just desperate for work. The real crooks will go off scot-free. That’s pretty much how the US justice system works.

  5. super_trooper says:

    Let’s see how much money Dan Webster’s campaing gets in the next few weeks. Three more weeks and Grayson may be gone.

  6. killben says:

    Ben Bernanke is at it again …


    Probably working hard at the amount he has to print , the acronyms he has to roll out to save his bankster pals!

    Is there a way to stop this guy before he wrecks more damage!!

  7. globaleyes says:

    TBP Rumor Mill: Alan Grayson & BR have become good friends based upon their shared values.

    It is time for handcuffs. Fraud does not become legal just because a big bank does it.

  8. Livermore Shimervore says:

    my girlfriend an ex-hairstylist err I mean colorist, called to say: “FU Jmoharris, why does everyone always pick on us? at least we actually provide a service unlike so many bankers, brokers and lawyers”.

    As for jail time, who did you think was going to end up in the clink? Pandit and Dimon? Right!
    Even if the mules end up doing a month in county the banks will surely have their legal depts and outside counsel working over time. Which of course means that this bottoming out of the Florida market will take a milenia now. I’m going to ring my old lady down in Orlando and tell her to quit paying her monthly mortgage and just squat until she makes back the 80% loss on her two bedroom for which the bank refuses to budge even on the interest rate, nevermind the balance. Why should they? She put down 30% on a fixed rate mortgage with perfect FICO. Obviously the bank thinks she’s the perfect kind of customer to just keeping paying into a house that will be underwater until the bitter end. The property tax bill arrived last month and FL says her house is worth 40% less than in 2009. Some buyers from South America came by and bought the foreclosure accross the street in cash for 20% of the 2007 price. Do the math, if it rents out at $1000 a month (easy) those shrewd South Americans will have their money back in a matter of years while my old lady is still feeding the TSTF (too stupid to fail) a nice monthly nut nearly of which is interest. Even if TSTF banks go ape shit again, lend to everyone, it will be the only way house prices can go back above water with this sort of inventory and shadow inventory…a stretch scenario for sure….an even in that return to bizzaro world you’re only looking at break even. WTFF? Why in the world should people keep paying their mortgages with that sort of outlook? TSTF are going to walk away from all this with only a slight trim?

  9. JustinTheSkeptic says:

    This, “letting the big shots get away with whatever they want,” is going to come back and bite all of us in the ass. What is happening today is starting to look a lot like why fascist Germany and Italy came to be.

  10. JustinTheSkeptic says:

    Livermore, there was a time??????????? But when both sides of the isle has pandered to corporation, while giving the general population a bone every now and then……….”YOU GET What YOU GET!

  11. Livermore Shimervore says:

    which reminds me…

    “the only useful banking innovation was the invention of the ATM” Paul Volcker

  12. JustinTheSkeptic says:

    And that is: A bunch of dumb-ass politicians (I think I saw 60% are millionaires), stroking and sucking everybody who signs a check for them!

  13. Old Timer says:

    Uh…errrrr…Grayson has a slight credibility problem. Maybe someone else can carry this water.

  14. JustinTheSkeptic says:

    A little Stepinwolf: “sucky, sucky, sucky Sueeeeeeeeeeee! Lot of Sue’s in Washington these days.

  15. rktbrkr says:

    We need the mother of all forensic audits just to assess the magnitude of the problem. The GAO needs to contract a fast track a statistical sample audit of all mortgages issued during the boom years and assess whether the documentation in the files meets the legal requirements of the jurisdiction.Contract the work out to major CPA firms at GAO direction with monthly interim reports and a final report in 6 months. The sample would include all types of mortgages issued in that time frame and follow them thru the python…current, delinquent, in foreclosure process and foreclosed.All inclusive pool of mortgages to sample from , all jurisdictions, lenders etc.

    We need to know the size of the pwobwem before we can attempt a cure.

    The review has to be independent and non-partisan, iternal bank reviews cannot be relied upon.

  16. Robespierre says:

    What it is really telling on all this is how little Obama is pushing for criminal investigation of any financial fir. At first I gave him a pass and figure he was just inept now he looks more and more like one of the “gang”

  17. Robespierre says:

    And as much as I would like these criminals prosecuted, there was this link yesterday at nakedcapitalism”


    The financial industry functions on the assumption that contracts and activities that are either illegal or unenforceable under current law will – as long as they involve significant bank losses or liabilities – always be made legal retroactively.

  18. bman says:

    This is not unexpected. I have been arguing for their heads on sticks long before this information came to light. The fact is the bank culture has a basic disregard for everything except money. Why should they care about silly things like service in the armed forces? That is a fact about a person, not money!
    A person is totally irrelevent to anything they are concerned about.
    You can talk about prosecuting them, but the real culprits will escape punishment. If you want to hit them where it hurts, Tax them. Tax them, Tax them, tax them!

  19. RadioFlyer says:

    Hey Livermore Shimervore, I think you should also tell your old lady to sue whoever it was that had a gun to her head when she decided to buy that place.

  20. Jack Damn says:

    Wall St blames homeowners in foreclosure fiasco

    Wall Street’s reaction to the allegations that some banks cut corners while foreclosing on 3 million homes since 2007: Pay your mortgage in the first place.

    Those on Wall Street, however, are largely unsympathetic, insisting that possible errors in the foreclosure process are beside the point, that the process begins only when a borrower starts missing mortgage payments.

    “If you didn’t pay your mortgage, you shouldn’t be in your house. Period. People are getting upset about something that’s just procedural.” said Walter Todd, portfolio manager at Greenwood Capital Associates.

    Some said the issue is one of personal responsibility for one’s own debts.

    “Everyone’s responsible for following the law. If we all don’t have to pay our mortgage, should we just stop paying taxes, too?” said Anton Schutz, president of Mendon Capital Advisers. “Your mortgage didn’t get to a robo-signer by accident, it’s because you’re not paying.”

  21. Mannwich says:

    @Jack: Did we expect any other attitude from the sociopathic banking industry? They get everything handed to them on a silver platter and think they somehow “earned” it. The world they live in is totally different than the one the rest of us live in, especially Wall Streeters in NYC.

  22. JMelville says:

    Does the description “unsafe and unsound” banking practices ring a bell? Would a regulator ever slap that on a TBTF bank? That my friend is more scary than any congressional inquiry or prosecution, because THAT closes you down. At the end of the day, the JPM’s, BofA’s etc live to screw another day.

  23. Tarkus says:

    Alan Grayson.

    One guy? One guy is saying there appears to be illegal stuff going on there?

    Where are the others?


  24. Jack Damn says:

    @Mannwich: Yep. I agree.

  25. Old Timer:
    Have any proof of that?

  26. dss says:

    The only reason banks allowed ATM’s to exist was to be able to fire tellers and charge people to take their own money out of the bank.

  27. Livermore Shimervore says:

    Hey RadioFlyer,
    no gun was put to the old lady’s head. Just a very misguided belief that banks, somewhat central to the largest economy in the world , weren’t lending to everyone who wasn’t like her: paying with 30% down, at a fixed rate, with only ONE mortgage, on a perfect FICO….and frightening silly belief that these banks actually had their own self interest in mind, with a smidge of self-preservation (a plan B). In other words, she was EXACTLY the sort of buyer who SHOULD have been participating in the RE market.
    But we are ALL now the wiser. These bankers command big pay checks but I’ve yet to see any evidence supporting that we should ever believe what they say or have any confidence in their assessment of risk–somewhat central to bank well being.