Last Tuesday evening I watched the PBS Frontline documentary called “The Untouchables”. According to the Frontline website, this film “examines why no Wall Street execs have been prosecuted for the financial crisis”. I encourage citizens to view this documentary (about 54 minutes), which can be seen online.
Lanny Breuer, who is head of the DOJ Criminal Division, was interviewed by Frontline correspondent Martin Smith. Sadly, while a large amount of evidence was collected, the prosecutions did not go forward, because according to Breuer, it is difficult to “prove” criminal intent in these types of federal cases.
Martin Smith also interviewed people who had worked as “due diligence underwriters”, who explained how they would get a laugh out of mortgage applications where the incomes claimed by the applicants seemed way out of line for their profession. For example, this “Fraud-bomb” quote:
“… it wasn’t uncommon to see school teachers claiming salaries of $12,000 a month on their mortgage applications, or electricians moving from $500 a month in rent to homes worth $650,000. The only problem — their supervisors didn’t seem to want to hear about it.”
“Fraud in the due diligence world, fraud was the F-word or the F-bomb,” said Tom Leonard. “You didn’t use that word”.
I won’t comment too much more about this documentary, since you can view it yourself. To me, this documentary points out that America doesn’t just have a spending problem or a revenue problem (tax system), or a debt problem. As a nation, we have an HONESTY problem.