COMMENTARY | I love hypocrisy, and try as a I might, I can not escape it.
Here is the latest, and it is a rich one. Federal prosecutors have decided to indict a fraudster who tried to bilk Mark Zuckerberg, founder of Facebook.
Paul Ceglia claimed he had a contract where Zuckerberg gave him half the company years ago in exchange from some coding he did for the young college entrepreneur.
Fast forward and now Ceglia has been accused of being a decent forger but not as good as Frank Abagnale Jr. (the con-man who was memorialized by Leonardo DiCaprio in "Catch Me If You Can").
The U.S. attorney's office in Manhattan arrested Ceglia, alleging he faked part of that contract by forging it from parts of a real contract he had with Zuckerberg to work on another site that had nothing to do with Facebook.
If you believe the U.S. attorney's office, Ceglia is the fed's version of Abagnale 2.0, a huckster out to make billions at the expense of others.
Here's what U.S. Attorney Preet Bharara said in a press release announcing Ceglia's arrest, after claiming that he doctored, fabricated, and destroyed evidence involved with his initial lawsuit: "Ceglia's alleged conduct not only constitutes a massive fraud attempt, but also an attempted corruption of our legal system through the manufacture of false evidence. That is always intolerable."
And that is where I nearly fell out of my chair.
If you simply removed Ceglia's name in that quote and replaced it with the name of almost any bank that has serviced a mortgage in the last five years, you would have the most succinct condemnation of the robosigning crisis to come out of the mouth of a federal official.
So if one man's attempt to defraud another man out of partial ownership of one company (albeit one as big as Facebook) constitutes massive fraud, how would you define the banks' use of tens of thousands of fraudulent documents to bring foreclosure after foreclosure?
Servicers, through their use of Linda Green and friends , were relying on fraudulent or non-existent documents in foreclosure after foreclosure, at a time when Facebook was still in its college-dorm infancy. The only difference here is Ceglia has been charged, yet we have not seen a single Wall Street banker criminally prosecuted, let alone any financial institutions. But make no mistake, the crimes bare some startling similarities.
You might be wondering how exactly the feds are going after Ceglia. He's charged with mail fraud and wire fraud. That is how they go after fraudsters when they have no other way to prosecute. And here is the promising thing. In this case the feds have provided Eric Schneiderman the blueprint on how to prosecute the banks.
Do you think the banks and their surrogates transferred their bogus documents using the mail or the Internet? You betcha!
If the feds started looking tomorrow through past foreclosures for cases of mail or wire fraud I think they'd have thousands of examples of mail fraud before they broke for lunch.
So Mr. Schneiderman, you can put the banks in handcuffs. It doesn't take a massive task force, or a change in federal law.
There are laws in place that can be used to bring Wall Street to justice. The question is does the government have the will to do it, or is it just another Too Big To Jail Story.
Real estate attorney Roy Oppenheim is the co-founder of Oppenheim Law in Fort Lauderdale, Florida, and Weston Title. He is also creator of the South Florida Law Blog, where he frequently provides "in the trenches" commentaries..
- Financial Fraud Prevention
- Politics & Government