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An excuse that worked for Bank of America: “We didn’t mean to” (commit fraud)

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Now that it’s known that simply saying “I didn’t mean to” will shield one from criminal charges of fraud, I think we have a game-changer. Jesse Eisinger reports for ProPublica:

Back in the late-housing-bubble period, in 2007, Countrywide Home Loans, which was then the largest mortgage provider in the country, rolled out a new lending program. The bank called it the “high-speed swim lane,” or HSSL, or, even more to the point, “hustle.” Countrywide, like most mortgage lenders, sold its loans to Wall Street banks or Fannie Mae and Freddie Mac, two mortgage giants, which bundled them and, in turn, sold them to investors. Unlike the Wall Street banks, Fannie and Freddie insured the loans, so they demanded only the ones of the highest quality. But by that time, borrowers with high credit scores were getting scarcer, and Countrywide faced the prospect of collapsing revenue and profits. Hence, the hustle program, which “streamlined” Countrywide’s loan origination, cutting out underwriters and putting loan processors, whom the company had previously deemed not qualified to answer borrowers’ questions, in charge of reviewing loan applications. In practice, Countrywide dropped most of the conditions meant to insure that loans would be repaid.

The company didn’t tell Fannie or Freddie any of this, however. Lower-level Countrywide executives repeatedly warned top executives that the mortgages did not fulfill the requirements. Employees changed data about the mortgages to make them look better, sometimes increasing the borrower’s income on the forms until the loan looked acceptable. Then, Countrywide sold them to the mortgage giants anyway.

At one point, the head of underwriting at Countrywide wrote an alarmed e-mail, with a list of questions from employees, such as, does “the request to move loans mean we no longer care about quality?”

The executive in charge of the decision, Rebecca Mairone, replied, “So – it sounds like it may work. Is that what I am hearing?”

To federal prosecutors—and to a jury in Manhattan—the hustle sounded like fraud. And in 2013, Bank of America, which had by then taken over Countrywide, was found liable for fraud and later ordered to pay a $1.27 billion judgment to the government.

But this week, the 2nd U.S. Circuit Court of Appeals looked at that judgment and asked this question: If a entity (in this case, a bank) enters into a contract pure of heart and only deceives its partners afterward, is that fraud?

The three-judge panel’s answer was no. Bank of America is no longer required to pay the judgment.

The Bank of America case was a rare outcome in the collapse of the financial system: a firm whose actions had contributed to the crisis was held to account by a court of law. The U.S. Attorney’s Office for the Southern District of New York, which brought the case in 2012, used an ingenious strategy, charging the bank under a law dating from the savings-and-loan crisis of the late 1980s, called Financial Institutions Reform, Recovery and Enforcement Act, or FIRREA. And the government actually identified a human being, Rebecca Mairone, claiming she defrauded Fannie and Freddie. . .

Continue reading.

Written by LeisureGuy

26 May 2016 at 1:26 pm

So many good things fade away: Duckpins, for example

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No duckpins in southern Oklahoma, but when I went to college in Maryland, I discovered duckpins, a wonderful game. We were only 25 miles from Baltimore, so we bowled Baltimore ducks: 3 balls per frame. But the game is fading. Dan Barry has a good article in the NY Times:

The world’s best female duckpin bowler holds so many bowling records that she has lost count, but her game-day shirt features a star for each of her tournament wins — a sartorial requirement of the Women’s National Duckpin Association. With 19 stars so far, her polyester constellation is running out of sky.

The world’s best female duckpin bowler lives here in the Berkshires, where duckpin bowling is neither played nor followed. If she wants to bowl, she must drive two hours to an alley in Connecticut, where bowlers sometimes ask her for shared selfies and autographs.

The world’s best female duckpin bowler is Amy Bisson Sykes, a slight woman of 37 who dominates a black-and-white pastime in a Technicolor world. Her sport is so yesterday that whenever another duckpin alley closes, the remaining alley owners descend like predatory relatives to cart off the mechanical parts of duckpin setting machines that have not been made in two generations.

But Bisson Sykes was reared in the duckpin bowling alley her father owned in Newington, Conn., amid the drone of rolling balls on pine and maple, the clatter of pins scattering like startled waterfowl. The soundtrack of her youth.

In leagues and tournaments, Bisson Sykes used to slip into an all-business cocoon that others found intimidating and even off-putting. Wearing the mask of singular purpose, she would stand with the same red-and-white ball firm in her right hand and raised close to her chest and then release it with the twinning of a ballerina’s curtsy and a fencer’s thrust.

“I was there to win,” she said.

The cognoscenti of duckpin often pause before describing Bisson Sykes’s talent and impact, as if searching for the proper superlative.

“Phenomenal,” said Al Zoraian, the president of the National Duckpin Bowling Congress.

“Not unbeatable,” Lauree Schreiber, a friend and longtime opponent, added. “But she’s about as close as it gets.”

Bisson Sykes has retained much of her intense focus on the 10-pintriangle. But motherhood has taught her that the lanes of life are curlicue, with pins that can move about and refuse to fall. Now she offers high-fives to opponents who throw strikes and embraces the sense of community that has always enveloped the ancient game of bowling.

It’s been an epiphany. Turns out some things in life are even more important than duckpin bowling.

It’s Not Easy

To all those armchair athletes rolling their eyes instead of balls, let’s be clear: Odds are, you’d be lousy at duckpin.

The grapefruit-size ball weighs less than four pounds and has no finger holes, and the squat duckpins look like out-of-shape cousins to the more familiar bowling pin. And even though a turn can include throwing three balls, instead of the two in the more common game of tenpin bowling, scores are still much lower.

According to the United States Bowling Congress, there were 55,266 certified 300 games — that is, 12 consecutive strikes, for a perfect score — in the 2013-14 season of tenpin bowling. But there has never been a 300 game in duckpin bowling. As all serious duckpinners know, a Connecticut man named Pete Signore Jr. came closest in 1992, bowling a 279.

The history of duckpin is a murky pond. It was long believed that the game emerged around 1900 from a Baltimore gaming hall owned by John McGraw and Wilbert Robinson, future members of the Baseball Hall of Fame. But research has since found references to duckpin dating to the early 1890s, in New Haven, Boston and Lowell, Mass.

The sport became popular along the Eastern Seaboard, finding particular passion in Rhode Island, Connecticut and Maryland. Men now gray and halting in step will recall their glory years as pin boys, setting pins and clearing deadwood for the greats: Harry Kraus and Wolfie Wolfensberger and the singular Nick Tronsky, out of Connecticut. And don’t forget the female standouts: Toots Barger and Sis Atkinson and Cathy Dyak.

Big matches drew standing-room-only crowds. Local newspapers chronicled the scores and profiled the stars (“Nick Tronsky of New Britain stole the show at the state duckpin tournament today with a nine-game total of 1,203). Companies hired ringers for their league teams, and some stars barnstormed, taking on all local heroes. In certain American crannies, duckpin was life.

Some pastimes just fade away, to resurface only with the smirk of irony. Like so many other endeavors, duckpin has been a casualty of the fundamental change in how Americans choose to spend their leisure time. But some of the duckpin faithful will also cite what is known as the Curse of Ken Sherman.

In 1953, a submarine designer named Kenneth Sherman invented an automatic pinsetter for duckpin. It was an elaborate, Rube Goldberg-like contraption of more than 1,000 moving parts — cast-iron gears and gaskets and pin holders — that did away with the need for pin boys and made the game faster and more efficient.

But the story goes that when Sherman’s company stopped operating nearly 50 years ago, he refused to sell the patent for the Sherman Pinsetter to Brunswick Equipment — some say because he feared that Brunswick would end production so that duckpin could no longer compete with tenpin.

“But we’re in the same situation as if Brunswick had shut us down anyway,” said Stan Kellum, 72, the executive director of the National Duckpin Bowling Congress, which is run out of a small office in a Maryland bowling alley. “Nobody is manufacturing the machines.”

Continue reading the main story

That is why, if you go behind the lanes at, say, Highland Bowl, in Cheshire, Conn., the back wall is lined with cardboard boxes crammed with cast-iron bits, duckpin nests and assorted other parts no longer manufactured — all scavenged and saved from closed alleys.

When all 20 lanes are operating smoothly, the deafening roar is mere background music for the owner, Todd Turcotte. But his ears are attuned to the faintest false note in the mechanical syncopation. When that happens, something is broken — off.

And what does Turcotte do then? “Pray,” he said.

His situation reflects why the game of duckpin could not grow. No new automatic pinsetters means no new alleys.

Today there are 41 congress-certified duckpin bowling alleys, down from nearly 450 in 1963, Kellum said, “and we’re losing houses all over the place.”

In fact, he said, “We just lost T-Bowl last year.”

That would be T-Bowl Lanes in Newington.

The alley in which Amy Bisson Sykes grew up. . . .

Continue reading.

Written by LeisureGuy

26 May 2016 at 11:45 am

Posted in Business, Games

Hillary Clinton, Debbie Wasserman Schultz Pick Influence Peddlers to Guide DNC Platform

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Lee Fang and Zaid Jilani report in The Intercept:

Three professional influence peddlers, including a registered corporate lobbyist, have been chosen by Hillary Clinton and Democratic National Committee Chair Rep. Debbie Wasserman Schultz, D-Fla., to serve on the committee responsible for drafting the party’s platform.

The 15-member panel has six members chosen by Clinton, five chosen by Bernie Sanders and four chosen by Wasserman Schultz.

Wendy Sherman and Carol Browner, two of the representatives chosen by Clinton, work at the Albright Stonebridge Group, a “government affairs” firm that was created in 2009 through a merger with Madeleine Albright’s consulting company and Stonebridge International, a defense contractorlobbying shop.

The website for the company touts its ability to win favors and influence with government officials throughout the world on behalf of corporate clients, from shaping regulatory standards in the U.S. for a European automotive business to engaging “with the highest levels of the Saudi government.” H.P. Goldfield, vice president at the firm, is a registeredlobbyist for the Saudi Arabian government.

The Albright Stonebridge Group did not respond to a request to provide a client list. But recent reports reveal that the firm has been tapped in recent months to work for Elliott Management, the hedge fund run by billionairePaul Singer, one of the most prolific donors to Republican Super PACs.

Sherman, who took a hiatus from her work at Albright Stonebridge to work at the State Department, filed an ethics disclosure in 2011 that revealed many of her former clients, including Coca-Cola, Wal-Mart, Dow Chemical, the U.S. Chamber of Commerce, and PricewaterhouseCoopers.

Wasserman Schultz appointed . . .

Continue reading.

One is a lobbyist from Covington & Burley, Eric Holder’s firm before and after his stint as Attorney General.

Written by LeisureGuy

25 May 2016 at 8:39 pm

A Japanese Pest Control Team Prepares for the Mutant Cockroach of the Future

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I didn’t read the article, but the video is worth watching. Very funny and effective commercial.

Written by LeisureGuy

25 May 2016 at 10:37 am

Posted in Business, Movies & TV, Video

Obama Overtime Plan Won’t Hurt Businesses, Executives Admit

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In other words, executives admit to being gratuitously hard on their workforce, just because they can. Power does indeed corrupt. Story here.

Written by LeisureGuy

24 May 2016 at 2:54 pm

Another way a functional Congress would come in handy: Scientists say nuclear fuel pools around the country pose safety and health risks

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Read to see how we seem to be waiting to see what happens when the fuse burns up.

Written by LeisureGuy

24 May 2016 at 12:24 pm

A Harvard MBA Guy Is Out to Bring Down the Clintons. The charge is charity fraud.

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Pam Martens and Russ Martens report in Wall Street on Parade:

Remember Harry Markopolos? That’s the tenacious financial expert that pounded on the door of the Securities and Exchange Commission (SEC) for years, providing it with detailed, written evidentiary support for the premise that Bernie Madoff, the respected former Chairman of the NASDAQ stock market, was running a massive Ponzi scheme. The SEC never confirmed the fraud before Madoff confessed as he ran out of money in December 2008 because it skipped the most basic of investigation techniques: it failed to verify if real stocks and bonds actually existed in Madoff’s client portfolios. They didn’t.

There’s a new Markopolos in town with that same brand of leave-no-stone-unturned tenacity and he has his sights set on the charity operations of Hillary and Bill Clinton, known as the Clinton Foundation and its myriad tentacles. Ortel’s actions come just as Hillary Clinton makes her final sprint for the Democratic nomination for President of the United States with Bill in tow as her economic czar. Like Markopolos, Charles Ortel does not mince words.

In a 9-page letter dated yesterday and posted to his blog, Ortel calls the Clintons’ charity the “largest unprosecuted charity fraud ever attempted,” adding for good measure that the Clinton Foundation is part of an “international charity fraud network whose entire cumulative scale (counting inflows and outflows) approaches and may even exceed $100 billion, measured from 1997 forward.” Ortel lists 40 potential areas of fraud or wrongdoing that he plans to expose over the coming days.

Like Markopolos, Ortel has an impressive resume. Ortel’s LinkedIn profile shows that he received his B.A. from Yale and an MBA from Harvard Business School.  He previously worked as a Managing Director at investment bank Dillon Read and later as a Managing Director at the financial research firm, Newport Value Partners. In more recent years, Ortel has been a contributor to a number of news outlets including the Washington Times and TheStreet.com.

The charges being made by Ortel are difficult to dismiss as a flight of fancy because mainstream media has tinkered around the edges of precisely what Ortel is now calling out in copious detail.

In a 2013 New York Times article, “Unease at Clinton Foundation Over Finances and Ambitions,” reporters Nicholas Confessore and Amy Chozick hint that Hillary Clinton’s political operatives are occupying offices at the Clinton Foundation headquarters, writing that they “will work on organizing Mrs. Clinton’s packed schedule of paid speeches to trade groups and awards ceremonies and assist in the research and writing of Mrs. Clinton’s memoir about her time at the State Department, to be published by Simon & Schuster next summer.”

A June 2015 article in the Wall Street Journal by Kimberley Strassel stopped hinting and spelled it out boldly, calling the Clinton Foundation a “Hillary superPac that throws in the occasional good deed.” Strassel explained: . . .

Continue reading.

Written by LeisureGuy

23 May 2016 at 4:13 pm

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