Respectfully submitted by Lawrence E. Rafferty (rafflaw)-Weekend Contributor

It seems that a week doesn’t go by without news of the latest Big Bank agreeing to pay billions in a settlement with the government over their past and continuing abuses concerning mortgages.  This past week was no exception.

“Preliminary reports say that a $16 to $17 billion settlement will soon be announced between the Justice Department and Bank of America. That would break the record for the largest bank settlement in history, set less than a year ago by a $13 billion agreement between Justice and JPMorgan Chase.” Crooks and Liars

Sixteen billion dollars is not chickenfeed!  However, as we have learned in the many past settlements, the dollar amounts can be a little deceiving. 

“Much of the “consumer relief” in past deals has turned out to be nothing more than gamesmanship with numbers. Banks modify loans in ways that are advantageous to them, offer deals they almost certainly would’ve offered anyway, and then count them against their “settlement” obligations.

That’s the kind of thing that happened with the much-hyped “$25 billion” foreclosure fraud deal announced in 2012. Subsequent settlements (including last month’s “$7 billion”Citigroup deal) have been vulnerable to the same kind of abuse.

Now the Wall Street Journal reports that $7 billion to $8 billion from the Bank of America deal will be allocated for “consumer relief, such as reducing mortgage balances for struggling homeowners,” while $9 billion will go to “the federal government, states and other government entities.”  Only the $9 billion is a sure thing – and most of that money will go to government agencies that have a poor record of providing relief to wronged homeowners.

What’s more, it hasn’t been announced whether this deal, like Citigroup’s recent settlement, will be tax-deductible. If so, Americans will get shortchanged at the federal level, too.”  Crooks and Liars

If the full amount of this latest “settlement” would actually get to abused and defrauded investors and borrowers, it would go a long way in making people whole.  Why does it seem that the Justice Department and the SEC provide a large number for the media and then when the facts come out, the allegedly criminal banks are paying out a fraction of the agreed upon settlement amount?

In light of the consistent failure of the Justice Department and the SEC to criminally prosecute bankers and Banks for what could be called serial mortgage fraud, it could be argued that prosecutors are purposely giving the Banks a “free pass”.  I realize that I may be stating the obvious, however, if it is obvious why do prosecutors keep shying away from criminal prosecutions?  Is the Fix in?

In light of the recent past, Bank of America seems to have been a frequent recipient of what I allege are sweetheart deals or slaps on the wrist.  I am not the only one who thinks the Big Banks are getting off easy.

“Worst of all, nothing in these settlements is likely to dissuade bankers from engaging in similar misadventures in the future. When the New York Times studied bank settlements several years ago, it found that banks routinely violated the pledges they made in agreements like these.

Bank of America had engaged in six repeat violations as of November 7, 2011. Since then it’s been a party to mortgage-related settlements that include the (allegedly) $25 billion foreclosure fraud deal; a $9.3 billion multi-bank settlement in 2013; and an $8.5 billion agreement with a group of mortgage investors it had defrauded.

Many deals with other big banks were also struck during that time. But there have been no criminal prosecutions of big-bank executives, an omission that Federal Judge Jed S. Rakoff lamented in a recent speech. Rakoff called the lack of prosecutions from the Justice Department and the Securities and Exchange Commission “technically and morally suspect” and characterized the excuses they’ve given for failing to prosecute as “hollow” and “lame.”’ Crooks and Liars

Let’s review.  Bank of America has been involved in at least 6 repeat violations, just in the last 3 years and yet no one is in jail.  If a Big Bank like Bank of America is allowed to allegedly break the law on multiple occasions and the only penalty is a money settlement or fine, why should any Big Bank change its behavior?  They can make a lot more money breaking the laws, even with the so-called billions paid in settlements.

These big banks are corporations and we have learned that “corporations are people”, so why haven’t any of these corporate “people” been put in jail? Why haven’t these “people” been forced to do the perp walk in front of the cameras?  The now infamous Bernie Madoff was jailed for defrauding many customers with his investment scheme, but maybe his only mistake was not establishing a corporate bank first. If Bernie Madoff had been Bank of Madoff, would he be in jail now?  What do you think?

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