More than 400 real estate industry players have been indicted since March in a Justice Department crackdown on incidents of mortgage fraud nationwide that have contributed to the country’s housing crisis.
The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion. Since March 1, 406 people have been arrested in the sting dubbed “Operation Malicious Mortgage” that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.
In a separate sweep, two former Bear Stearns managers in New York were indicted Thursday, becoming the first executives to face criminal charges related to the collapse of the subprime mortgage market.
The United States Attorney’s office announced the unsealing of the indictment this morning in federal court charging two former Bear Stearns executives with conspiracy, securities fraud, and wire fraud.
Ralph Cioffi, of New York City, and Matthew Tanin, of New Jersey, were arrested by the FBI this morning.
Cioffi, 52, was the founder and senior portfolio manager of two Bear Stearns hedge funds. Tanin, 46, was a portfolio manager. They are both suspected of misleading investors about the risky subprime mortgage market. The subsequent failure of the funds last summer resulted in $1.4 billion in losses to investors.
The indictment by a New York federal grand jury also claims Cioffi and Tannin touted the funds as an “awesome opportunity” to investors, as they were privately discussing serious concerns over the prospects of the two funds they managed, while concealing problems from their superiors at Bear.
Cioffi was also charged with insider trading.
Cioffi and Tannin’s lawyers continue to say they are innocent, and merely being used as scapegoats.
The indictment does not hold the defendants responsible for Bear Stearns ultimate downfall, which was brought about in part by the subprime mortgage crisis.
(Source: CBS2 HD / NY1 / Associated Press)
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3 Responses
Does the subprime problem have any halachic ramifications?
If a mortgage broker/lender gave an adjustable rate mortgage to somebody with an interest rate of 2%, and after reviewing the borrowers financial information the lender knows that the borrower will not be able to pay the monthly payments when the loan adjusts to 9% two years down the road unless the borrower has a massive increase in income; is that OK?
How about the mortgage lenders who took money from investors and assured them of great returns on their great investments and then went and lent the money to people who had no income, no social security numbers, and extremely slim chances of repaying the loan; is that OK?
Good thing they are going to give these two Bear hedge fund manager what is coming to them.
Even though they didn’t directly bring down Bear Stearns, they did put in motion the problems that ultimately brought down Bear Stearns.
Throw the book at these 2 greedy behaimois.
To Dover Shkarim:
First, in this case your are “Dover Emes”.
Second, the answer to both of your questions is:
GENEIVA (theft)
GENEIVA
GENEIVA
Without a shdow of a doubt. And this is true if the mortgage broker in question (doing these things) received “Shishi” or even bought “Maftir Yonah”
“Lemaan Nechdal Meoshek Udeinu” is said during the holiest of prayers, during the “Neeilah” prayer.