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How Wall Street Used Sub-Prime Mortgages Connected Tax Fraud
to Screw the World's Banks
by Andrew Molchan
(March 26, 2008) Since the end of 2004, everyone in America, with any degree of personal intellectual
honesty, has known that the sub-prime mortgage scam was a con game. America's governments: town, city, State and
Federal, were all getting their share of the money.
A core element in the sub-prime fraud was,
"undocumented income." What does "undocumented income"
really mean? A couple that wanted to buy a home, for say, $200,000.America's
Matrix of lies said, "Home values only go up, up and up." The husband
would say to the real estate broker and real estate lawyers, "We're only
declaring $19,000 in income on our income tax filings. However, my wife is a
waitress who makes most of her money in cash tips, and I'm a gardener
who gets a lot of pay in cash, so we're really
making $45,000 a year." The lawyers and real estate brokers said,
"Well, that's cool. You can certainly afford a $200,000 mortgage."
In early 2007 the scams went to levels that
even I couldn't believe. In early 2007, I was watching a news report about, "The
growing real estate problems in California." A local California TV channel had a
Latino couple on the nightly news program. The husband couldn't speak English,
and the wife's English was limited. Four months earlier, they had ‘bought"
a $455,000 home in California, with $1,000 down, (that's not a misprint,
$1,000), and a $454,000 mortgage. Now, payments
are behind and the bank was threatening to
foreclose. The reporter from the local TV channel was very sympathetic, but I
could not believe what the wife said, "We are so worried, if we lose our
home we won't have a place to live. We worked so hard for the down payment
($1,000).We had to do without to raise the money, and now we might lose
it." They had to, "Work so hard," to save $1,000! One thousand
dollars down for a $454,000 mortgage! I thought, This
pile of shit is definitely going down the toilet – big time!
STEP
ONE,TAX FRAUD.
Every mortgage and home-sale closing had at
least one lawyer. Most of the time, two lawyers; one from the
buyer's side, and one from the seller's side. There were always real
estate agents. A real estate licensed agent who was (is) licensed by the state
to make sure everything was legal. Also present, the Title & Trust
Companies who are semi-government agents that guaranteed the legality of the
sale.
In America, lawyers are supposedly, "officers of
the court." American lawyers, supposed have the job of making sure everything
is legal. All thinking Americans know that a significant percentage of American
lawyers are only interested in money. The true meaning of "justice"
in modern America, for many lawyers, means money going into
their pockets. Making money is "justice," and not making money is
"injustice."
Young Americans are NOT becoming engineers,
factory managers, etc., because they are pilling into the law schools. If you
sue 1000 companies, all you need is one big win and you're financially set for
life. It's a percentage game, the more you sue, the richer you become. In many
countries, if you sue and lose, you pay the court costs of everyone. For American
lawyers there is very little downside to suing as many companies as possible,
and for any reason, no matter how ridicules. Some American lawyers sell cases
inter-state to other lawyers. The cases come on a CD, all you do is fill in the
blanks, and the lawyer who purchased the case can use it to sue a company in
his state.
Here's a real case from 18 years ago. A pig
farmer in the state of Ohio, decided to paint his barn. It was March, but
a warm sunny day. The temperature that night had been 25 degrees, that's below
freezing, but it was going to warm up to 60 degrees that day. The farmer got up
early, and it was a bright sunny morning. He put his ladder in the pigpen next
to the barn and started painting. Two hours into painting, his ladder fell
over, and he fell off breaking his leg. What happened? The frozen pig shit the
ladder had been on, had thawed in the warm sun, and the ladder sank on one
side, and
then fell over. The farmer's lawyer sued the
ladder company, and won $800,000.The lawyer's argument was that there was NOT a
warning label again putting the ladder on frozen pig shit that might thaw. The
lawyer's fees for this case were $525,000. In America, the majority of most settlements go to the
lawyers.
Cigarette sales are an example of how America "justice" operates. The lawyers
said that cigarettes, "Killed people, massively increased health costs, slowed
production and were an injustice to the America people." UNTIL, the lawyers, like American
Presidential candidate John Edwards, got their multi-billion dollar, Mafia
like, cut of cigarette sales. Now that the lawyers are making money from the
sale of tobacco, cigarettes are just wonderful. Cigarettes are on sale
everywhere in the USA. As a side note, lawyer John Edwards put
millions of dollars of his cigarette pay-off money into a taxavoidance
Cayman Islands bank account. I wonder his extra campaign contribution
money is going to end up?
American's legal system, where America's
semi-communist lawyers are a de facto state within a state, is one of the
reasons why American manufacturers are leaving (and will leave) America as fast
as possible.
Four years ago, I looked at what was
happening with American real estate sales, and thought, This
is tax fraud. Somebody says they make $45,000, but they're only declaring
$19,000, and only paying income tax on $19,000! That is without question tax
evasion. On top of that, they are signing documents and admitting tax fraud in
writing. Lawyers are aiding tax evasion on a massive scale – and getting paid
for it.
Where was the IRS? Hundreds of thousands of
people signed statements, admitting income tax evasion, and no IRS anywhere in
sight. Why wasn't the IRS asking, "How is this couple, who are declaring
only $19,000 a year in income, buying a $200,000 home where the interest
payments alone are $12,000 a year, and the state and local taxes are $3,000 a year,
and home insurance is $1,200 a year?" Apparently, the IRS never noticed
the eight million examples of admitted tax fraud, from 2003 to 2007. Now, the
US Government's "solution" is to give the crooks billions of dollars
of taxpayer money that's coming from honest taxpayers.
STEP
TWO: INFLATION FRAUD
The Federal government CERTIFIES that
inflation in the USA for the last 12 months was 2.8%. If you
believe inflation in America was really 2.8%, than you are totally
DELUSIONAL.
Real world inflation, for working class
people in America, is around 8%. So you buy a big home, the
biggest you can possible get with lots of "undocumented income" lies
because, "Real estate only goes up, and it will make you rich."
You're figuring your budget, and it's hairline tight,
really tight, but you think you can do it. Besides, the house will make you
rich in a few years so, "You can afford it." However, you make a
fatal mistake, you believe the government. You're thinking
2.8% inflation like the government certifies.
What happens to your very tight budget when you're figuring 2.8% inflation, but
it's really 8%? Answer: your budget does down the toilet, followed by
foreclosure, real estate meltdown, and bankruptcy.
I'm on the ground here in America, so I know that real world inflation in the USA is around 8%. My suspicion is that in places
like England and Spain, that are having significant price drops in real
estate values. The reason is that those governments, like the
USA, have been (and are) grossly under reporting
inflation. My suspicion is that Germany has less of a real estate problem because
the Germans have been, and are, more honest in their financial reporting. If
you're a German, you know that it was inflation that helped elect Adolf Hitler. The Germans don't treat inflation lightly,
like we do in America. Putting the EU's
European Central Bank in Frankfurt
was a very smart move.
There's also America's Federal Reserve, the people who for years
have gone alone with the under reporting of inflation. Nobody at the Federal
Reserve could see where all the lies were heading.The
US Congress never got the picture. Thousands of lawyers in America could not recognize tax fraud when it was
right in front of them. Ultimately, the US population went alone with the 2.8%
inflation fraud, and it's logical sub-prime meltdown
consequences.
The pigs, at places like Bear Stearns and so
forth, made millions of dollars year after year in salary and bonuses from the
fraud. For years, Wall Street gave itself thousands of multi-million dollar
bonuses made from peddling billions of dollars worth of sub-prime crap to the
world's bankers. Billions of dollars in Wall Street salaries have already been
transferred to bank accounts in Switzerland and the Cayman Islands. The Wall Street scammers are already rich, and will
stay
rich. They already have their 150-foot yachts,
paid for, their big condos in New York, Singapore and Paris, paid for, their big
private jets, paid for, and their luxury vacation homes in Aspen, the Hamptons, and the Virgin Islands, already paid for.
Now, when the fraud and
crimes are crashing down on millions of innocent people around the world. The Federal Reserve is using American
taxpayer money, and bailing out the biggest multi-millionaire crooks, like Bear
Stearns and all of the follow travelers. The chief executives of the biggest
scam companies will walk away with tens of millions of dollars, while Mr. average, honest-working-man gets stuck with the bill.
I hear many people say, "I'm poor, I
don't pay taxes, so what happens on Wall Street doesn't mean anything to
me." Wall Street's fraud is being paid for with a constantly decreasing in
value US dollar that cost EVERYONE money. The decreasing
dollar is a tax that no American can avoid paying. Everyone who buys anything
in America, with US dollars, will be (and is) paying the tax.
The scammers, from the lawyers at the
mortgage closings, to the Wall Street firms that sold the mortgages to foreign bankers;
all the crooks have already collected billions of dollars in fees. The fraud
has already made them very rich. Now, the Federal Reserve is helping the
wealthy Wall Street manipulators so they don't lose too much of their criminal begotten
fortunes as the sub-prime fraud collapses. Hard working Americans, like
carpenters and plumbers, lose their jobs while the Wall Street manipulators
retire to their big yachts in Tahiti.
In the future, if foreign bankers trust
American lawyers, American securities rating companies, Wall Street, and the American
legal system. Then those bankers deserve to be fucked – and they will be.
A simple regulatory requirement would have
avoided the fraud. In column A, you have the mortgage applicant's name. In column
B, you have their income, from their tax returns, for the last three years. In
column C, you have the amount of money they want to borrow. If this information
had been available, and scam would have been apparent to the European and Asia suckers that eventually bought billions of dollars
worth of forged mortgage information. A ten year old could have looked at the
columns B and C, and asked, "Why is a person who's declaring only $19,000
a year in income getting a $200,000 loan, were the interest alone is $12,000 a
year? Why are credit rating companies in America giving shit like this AAA ratings?
The reason why the above information was
never collected, and is still NOT collected, and will NOT be collected, is because
America's lawyers and Wall Street didn't want it
collected. It would have lowered their profits, and that's
"injustice" in America.
Under America law, anyone can sue anyone for anything. In America, once a case is in the courts, it never
leaves until the plaintiff's lawyers are paid off. If I were the head of a
foreign bank, I'd sue every company and person who had anything to do with the sub-prime
mortgages.
In the Tokyo courts, Lehman Brothers Holding Inc. is
going to court to sue Marubeni Corporation, a trading company, for $350 million
dollars. Lehman is claiming that Marubeni used forged income documents in a
business deal for LTT Bio-Pharma Co. of Tokyo. Hey,
wait a second! Tens of thousands of America sub-prime mortgages have forged and
falsified income statements, and Lehman Brothers sold some of them to companies
that now have substantial and growing loses.
Closing notes: this is NOT an anti-America
article. What I'm saying is that America has to return to being an honest country. Starting with the Federal government, with Congress, with the White
House, and with the press. If America had been an honest country, with an honest
legal system, and a press willing to report politically incorrect facts, then
the sub-prime mess would never have happened. Continuing lies and dishonesty
about what happened with "sub prime," that is the problem, NOT the
solution. Feel good journalism is the problem, not the solution. America has to go from where it's at now, which is
the belief that every problem can be solved with a bigger feel good lie. America has to "change," and return to,
"The truth will make you free," even if that truth is unpleasant.
Andrew Molchan
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