Wednesday, March 18, 2009

Hang the Bastards - Or At Least Bring Fraud Charges

Hang the Bastards - Or At Least Bring Fraud Charges

The American nation, from the President down, is outraged over the continuing multi-million dollar bonuses to AIG executives and traders after $180 billion in public funds have gone to shore up this massive insurance firm. At AIG, especially in its London operation, massive numbers and amounts of insurance policies were written to ensure risky trades by customers. Policies that largely did not have any reserve set aside to cover payouts.

Similar totally irresponsible actions are behind the troubles at many Wall Street firms and banks. Executives and traders engaging in business deals that resulted in short term profits for the firm, and very high bonuses for themselves, but ended up costing the firms stockholders truly massive amounts of money and the taxpayers even more money in the form of bailouts to cover the criminal behavior. I use the word "criminal" here because that is what was happening and not just in a broad layman's use of the word.
Fraud is generally defined in law as an intentional misrepresentation of a material existing fact, made by one person to another, with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage (which can include loss of money). Fraud may also be made by an purposeful failure to state material facts or by an omission, which nondisclosure makes other statements misleading.

In the case of AIG the fraud was two-fold: (1) The stockholders were relying on the corporate officers and employees to write insurance policies that were both profitable and reasonable in the sense of a reasonable risk to the corporation; (2) The parties paying for the insurance coverage were relying on the corporation to insure their risk and to be able to pay the insured amount in the event of a legitimate claim. In both cases, the corporate officers and those selling/writing the policies knew or should have known that setting aside NO RESERVES or very small reserves placed the corporate stockholders and the policy holders at grave risk. The corporate officers and those selling/writing the policies were profiting from the high profit sales of these insurance policies, without reserve amounts being maintained, by the receiving of large bonuses and other remuneration based on the short-term profits from the sales of the policies without regard to the mid and long-term consequences to the corporate stockholders or to the policy holders. This constitutes fraud. It does not matter if the exotic policies were in a insurance law loophole or not. What matters is that the corporate officers and employees engaged in fraud by selling policies without regard to the stockholders or to the policy holders, and knew or should have known from normal insurance practices that selling insurance policies without significant reserve amounts set aside to cover claims was certain to cause substantial loss to both stockholders and policy holders. The resulting crisis caused by the AIG policies is 'Prima Facie' evidence of same.

The corporate officers and those employees involved engaged in fraud against the corporate stockholders; they also engaged in fraud against the policy holders. They should be tried for criminal fraud at the Federal level and/or at the state level. This can be undertaken by the US Department of Justice or by State Attorney Generals or local county prosecutors in jurisdictions where either stockholders and/or policy holders reside or do business in.

Similar cases of fraud exists throughout the many investment banks and institutions currently receiving billions in federal bailout money. We have not yet seen criminal prosecutions of these matters but the public is totally outraged and the crimes are massive in scope. It is high time that federal and state/local prosecutors begin a parade of corporate officers and senior employees before grand juries for criminal indictments and the resulting criminal trials.

Not only billions but trillions of dollars have been lost to these multiple frauds and it is time that the criminals responsible face the law. Our very system of government demands that the guilty parties be brought to justice.

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Anonymous said...

This opinion is right on target!
Thank you!
It is not enough that these men pay the money back, they must go to jail for fraud, and I submit for high crimes, and treason.
It is looking like there is a NY scandal concerning Madoff, as well as Guilliani, Goldberg, Cuomo, and several others, and a project called Four Corners. It all ties to Silverstein, and his huge insurance fraud on the Towers.
This time the crimes are so great that they are taking down the world. Are there any Federal prosecutors who have not been neutered? Where are the citizens who believe that no man is above the law, even if he has more money than god....from stealing from us??

Anonymous said...

Uh, what about the treasonous scum in Congress, including the Imposter-in-Chief, who voted for this illegal garbage to begin with? And aren't these the same bastards who passed legislation in 1999 that allowed these banks to engage in their financial shenanigans, and then sat back and watched them create phony investment vehicles that they leveraged to the moon and back, without exercising one jot of oversight?

Aren't these the same reptiles who strong-armed a lot of these banks into making loans to people that had bad credit ratings, or no credit rating at all? The banks knew that the greedy s***s taking out these loans were never going to be able to pay them back, and so did the borrowers. Let's leave aside for a moment that all loans are essentially counterfeited, because the banks don't have the money to loan at the time of the agreement being signed. The only money they have is in their depositors' accounts, and they couldn't loan that out without being sued out of existence for malfeasance. The figures are conjured up out of thin air and pushed through the banking system, since they're all in the same racket. Oh, yes, there is money printed up after the fact, but none of it actually goes to the banks.

So, if we're going to get around to hanging people let's be sure to include the ones who made every single bit of this gigantic rip-off of the taxpayers possible. And while we're at it, let's lynch their Zionist masters as well.

Anonymous said...

If you are interested in connecting the dots, you might read, today for the "Story behind the Story of Madoff", and the real deal that is driving this looting operation, and it's ties to AIG.

Drutch said...

LMAO, that's rich! Obama is not outraged. He's one of the largest recipients of AIG campaign funds. There will be nosignificant action take against AIG by Obama. In fact I'm guessing he'll probably do all he can to privately aid AIG and publicly denounce them.

S Sanders, MA said...

Thank you for this article. Your education background shows in your ability to explain things in a way people can understand. I have been looking for some articles my students can understand and this will be one of them!

p.s. This yank wishes she could move to Nova Scotia!

KimWSSmith said...

This is not going to get any better unless we, the People, wake up to the fact that Nazi Israeli Zionists are the vampires who orchestrated the entire debacle.

Our government has no desire to represent their constituents. They are firmly in the back pocket of AIPAC and the other special interest groups whose only purpose in life is sucking the life blood of every country that ever hosted these parasites.

We must take matters into our own hands and deal with this infestation by whatever means our imaginations and fortunes avail us to.

We must remove them from the "entertainment media", Print media, government, and financial markets by ANY MEANS; up to and including by FORCE OF ARMS.

They have produced traitors like Julius and Ethel Rosenberg, Ken Lay, Bernie Madoff, Jack Abramoff, Richard Perle, Jonathon Pollard, Elliot Spitzer, Samuel Dickstein, Ariel J Weinmann, Solomon Adler, Harry Dexter White, Charles Ponzi, etc. Until we remove this trash from the American scene; there will be more "Madoff's" who make off with OUR hard earned money and send it to Nazi Israel.

None of the "losses" we suffered "evaporated" as the ZioNazi media claim: those "losses" were funneled to Nazi Israel to finance the genocide of the Palestinian people.

Follow the money. AIG has admitted that most of their "bailout" funds immediately went "off-shore". Most of the "bonuses" were paid out to scum who are not U.S. citizens.

Our government is a miserable failure when it comes to addressing the issues caused by the Nazi Zionist minions of the Nazi Israeli junta in Jerusalem.

If we don't run these inbred sociopaths out of our country soon: there will be nothing left for us to defend.

Kauft Nicht Bei Juden

Anonymous said...

What you have here is a clear case of economic terrorism. These guys have done more damage in a year than all the "terrorists" in the world combined have done in the last century. You have the remedy at hand, the legislation in place. Designate the lot of them "enemy combatants", suspend habeus corpus, round them up and rendition them to guantanemo at the cost to them of 1,000,000 dollars each for the flight, and a further 100,000 for every day they remain there until they sign a disclaimer relinquishing their bonuses, and give back every cent stolen from the people. Any smart ass lawyer who wishes to defend them should be obliged to join them. Your current court system is worse than useless, you would probably benefit from a period of martial law and use it as means to "clean the house".

Anonymous said...

The people you want to bring fraud charges against own the Police State. Bernanke, Paulson, Geither, Summers, et al, are preparing to unleash martial law-- the jack-boot kind. America's institutions belong to them and they say Ron Paul and supporters are terrorists. You love the Constitution? Your're a terrorist.

This is the end folks the 'extreme bankers' are going to take it all. They got the State Police in their hip pocket--hell all the police.

No point in talking about the high crimes of the banksters. Obama is in their hip pocket too. What law did you say? Stealing your money is their right.
Furthermore, they make the laws, not you. Still nothing they will do is going to work. Guess you and your families will have to starve or behave like slaves or both. Too bad for you.