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Financial Forensic Report 2.22.2021

SIGTARP CRACKS DOWN ON TREASURY’S MISDEEDS

The Treasury’s approval to reward the top 25 executives at GM and Ally Financial with excessive pay including pay of at least $1 million each, with average pay at $3 million while the Treasury was simultaneously writing off billions in losses for each company in its formal TARP (Troubled Asset Relief Program) accounting and records, has received special attention from its Office of the Special Inspector General. Over the past two years, it has practically doubled the number of defendants charged with crimes to bring accountability and justice.


 These TARP crimes are typically designed to be concealed. SIGTARP special agents, investigators, and analysts use classic law enforcement techniques, such as analyzing thousands of documents, interviewing witnesses, talking to cooperative witnesses, and conducting surveillance, combined with significant forensic analysis to detect and unravel sophisticated complex financial crimes that were intentionally designed to be hidden. 


SIGTARP works hand-in-hand with the prosecutors to ensure successful convictions. To the extent that the defendants do not plead guilty, SIGTARP prepares for trial with prosecutors. They also seek corporate accountability for criminal conduct. This comes in the form of holding corporations responsible for criminal conduct or through the conviction of senior management of the corporation.

Bank of America’s “Hustle” resulted in a federal jury trial in New York with the jury finding that Bank of America, through one of its officers, Rebecca Mairone, had engaged in criminal misconduct. The Federal Court’s July 30th, 2014 Order stated, “The essential crime found by the jury was a scheme to induce Fannie Mae and/or Freddie Mac to purchase mortgage loans originated through the High Speed Service Lane by misrepresenting that the loans were of higher quality than they were.” The Court’s Opinion described the bank’s process known as the “Hustle” as, “the vehicle for a brazen fraud by the defendants, driven by hunger for profits and oblivious to the harm thereby visited, not just on the immediate victims, but also on the financial system as a whole.” Penalties of $1.27 billion against Bank of America and $1 million against Defendant Mairone were ordered by the federal court. A Sun Trust fraud related to HAMP Foreclosure Prevention Program resulted in a Sun Trust agreement to pay $320 million to victims and the government with an agreement to the corporate charges.

Edward Woodard, the former Chairman and CEO of the now failed Bank of the Commonwealth, was sentenced to 23 years in fiscal 2014 for fraud on the bank’s books and records, including those used to apply for TARP.

Stephen Fields, former EVP was sentenced to 17 years; Troy Brandon Woodard, former VP of the bank’s subsidiary in September 2013 was sentenced to 8 years; co-conspirator Eric Menders was sentenced to 14 years and co- conspirator Stephen Hranowsky was sentenced to 11 years.

Isaak Khatizov, former owner of American Home Recovery was sentenced to 9 years in fiscal 2014 for defrauding hundreds of homeowners trying to get into the HAMP program.

Christopher Godfrey and Dennis Fisher, owners/controls of HOPE, were sentenced in fiscal 2014 to 7 years each for defrauding struggling homeowners trying to get into HAMP and Lee Farkas. The former chairman of Taylor, Bean & Whitaker, was sentenced to 30 years for his role in a multi-billion dollar fraud scheme that included an attempt by Colonial Bank to get TARP funds.

SIGTARP HAS ESCALATED EFFORTS TO BRING VICTIMS AND THE GOVERNMENT MONEY LOST TO TARP-RELATED CRIME AND OTHER VIOLATIONS OF THE LAW.

The requirements made through a court order or government agreement, stating that a defendant must pay money, brings accountability for law breakers. First, those who break the law should not be allowed to keep the financial windfalls of their crimes or civil violations of the law. Second, SIGTARP plays an important role in the government’s attempt to make victims whole. Third, to bring accountability and deterrence, penalties should be substantial, otherwise the risk is that penalties will become just a cost of doing business.

It is refreshing, at the very least, to see this government agency, the Office of the Special Inspector General for the Troubled Assets Relief Program (SIGTARP), working so hard to actually obtain justice rather than just paying lip service and issuing double-talk press releases about success via Cease and Desist Orders and probation for white collar criminals. CONGRATULATIONS SIGTARP— KEEP UP THE GOOD WORK!

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JUICE JACKING

Don’t get hacked juicing… and I don’t mean carrots. The juicing (and hacking) I want to bring to your attention is from kiosk charging stations, like the ones you might see at the airport or a conference center.

One thing that we can all count on is that if there is something that contains sensitive data, hackers will find a way to jack it. In this case it’s the information on your phone, tablet or other device. The USB cable connection that you use to charge your device contains prongs that have different functions. Only a couple of these are for charging—the others are for data transfer. Plugging in can allow easy access to your data. That’s the bad news; the good news is there are readily available ways to protect your data. One solution is to purchase a “charge-only” USB cable. According to my research, you can pick up one for around $8.

If you are interested in more information about this form of hacking/ jacking, just go to your favorite search engine and type in “juice jacking.” You will find that there are many posts related to this topic. There is even a YouTube video on how to make your own charge-only cable.

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AREAS OF SUCCESS,
AREAS OF STRUGGLE

When we are not operating in our area of giftedness, we struggle. We need to keep that in mind when we see a great achiever, or become a great achiever ourselves. Paul spoke five languages and wrote half the New Testament, but he constantly struggled with what he refers to as a “thorn in the flesh.” When he prayed and asked God to remove it, God said no. “My grace is sufficient for thee: for my strength is made perfect in weakness.” So we need grace in the areas of our gifting, and grace for the areas in which we’re not gifted at all. The story’s told of a man who went to hear a great speaker, and ended up seated beside the speaker’s wife. During the speech, the man noticed that the great speaker had monogrammed socks. Intrigued by this, he looked closer and saw that instead of the usual two or three initials were the letters “TGIF.” When the speech was over he complimented the speaker, then turned to the speaker’s wife and said, “How come your husband’s socks say, “TGIF: Thank Goodness It’s Friday?” She replied, “Oh that’s not what those letters mean; the monograms are there to help him get dressed. They stand for Toes Go In First.” As long as you live you will soar in some areas and struggle in others. And you will find that God’s grace is sufficient for any challenge you face. And that’s the word for you today.

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Diagnostic & Prescriptive Judgment Enforcement
By: Joe H. Dickerson, CFE

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2014-11-11T18:21:32+00:00

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2014-11-11T18:20:41+00:00

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2014-11-11T18:13:08+00:00

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