As they say, steal a loaf of bread and you will go to jail, steal millions of dollars and you go free. Or in this case, billions.
Federal prosecutors have dropped the charges against Angelo Mozilo, the former CEO of Countrywide Financial. Mozilo was one of the highest paid executives in the country — between 2000 and 2008 he was paid more than half a billion dollars in compensation.
Mozilo was accused of insider trading when he sold $140 million in Countrywide stock even though he knew the company was failing — defrauding millions of shareholders. He settled that charge for $67.5 million (almost certainly less than the money he made selling his shares). Just to add a bit more of irony, $45 million of the settlement was paid by Countrywide (and by Bank of America, who purchased Countrywide in 2008) further costing the shareholders money.
Other than being allowed to keep most of his ill-gotten gains, Mozilo was punished by being banned from being an officer or director of a public company. I find even that ironic, since it implies that they have to ban him or else some company would want hire him as an officer or a director.
At one time, Countrywide Financial was the largest home mortgage lender in the country. Hundreds of billions of dollars were lost by investors, and millions of borrowers lost their homes. There were emails from Mozilo discussing his company’s lending practices and describing some of its loans as “toxic” and “poison”. But they kept selling those loans. A former Countrywide executive sent an email to a friend explaining that he had not recognized the looming financial meltdown because “we were having too much fun” processing risky mortgage instruments “and getting loaded on Miller Lite.” Seriously.
Countrywide had a special program called “Friends of Angelo” that gave mortage loans to politicians that Mozilo liked, at severely reduced rates. Countrywide also had a large political action committee (PAC) that made large contributions to political campaigns.
And now, Mozilo goes free.
4 Comments
Thats what happens when you put the fox in charge of the hen house. The AG office has become the political enforcer for the executive branch, which is bound to happen when its an appointed position. Using law is cleaner and neater then using the military. You send them to harrass and file charges or law suits against those that disagree with your opinion, yet tell them to ease off on those that support you. If anyone complains they say “what, we are a nation of laws and we’re just enforcing them, now move along or you’ll be next on our list”.
And I watched it all happen as I was doing tax returns. Almost instantly I watched how terrible those loans were. My most down and out clients would be coming in with Countrywide loans so I knew they were bad loan. Just like Beneficial loans back when I worked at H&R Block. I spent 28 years doing taxes and telling people to “pay cash, pay cash, pay cash” We have a lot of run down houses (or trailers) around here where people live “happily ever after) because they paid cash and were out to impresse no one.
Looks like Nixon’s playbook won after all 🙁
Too big to jail.
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