JP Morgan to Pay Another $2Billion for Madoff Conspiracy

When the news of Madoff first made it into the media from which we think we get the information on what is happening in the world, I had two thoughts — both related to my own experience on Wall Street. The first thing was that at $60 Billion it was impossible for all the big bankers (see Simon Johnson’s Thirteen Bankers book — a smart read) and traders to have been ignorant of what he was doing; the corollary to that is they said nothing, knowing that Madoff was saying he was the smartest trader in the world. None of the broker dealers had ever done a trade with him. So they new it was a PONZI Scheme. And he went to jail and other unpleasant things happened to his family.

The second thing that came to mind was the question of was why none of the big bankers were reporting him. Normally, the self policing code periodically cast a fraudster under the bus to achieve popularity with the public and regulators. Here, they were feeding a monster that was literally robbing widows and orphans over decades. And the reason why they were feeding Madoff’s scheme with new suckers investing in Madoff’s nonexistent investment trading portfolio — and the reason it finally leaked out — was that it was timed perfectly with the mortgage Ponzi scheme. It was the perfect distraction from what the Thirteen Bankers were doing. They threw him under the bus at precisely the time that their own peccadillo’s were about to hit the fan (sorry to mix metaphors).

The Madoff scandal was called the largest financial fraud in the history of the world. But sitting right next to it was the largest white elephant ever conceived in the imagination of the public or even fiction writers. Madoff had taken $60 billion whilst the Bankers were making off with a minimum of $13 Trillion. Do the math. The Bankers sucked out of our economy a minimum of 10,000 times what Madoff had taken and they had retained a minimum of 2,000 times what Madoff had taken. If you like Math that equates by division to Madoff’s “largest ever financial fraud” being 0.02% of what the bankers had taken also by fraud but using more sophisticated systems and layers of trail and entities so it made it more difficult to prosecute the banks than Madoff which was really very easy.

But the Wall Street bankers had another card up their sleeve. They had created a shadow banking system that was twenty times the total amount of fiat money issued by all countries of the world. They used these “nominal” values to scare the shit out of central bankers and finance ministers and convinced everyone that no matter how evil their motives and actions, they were too big to fail because if the government took them down, the entire financial system would collapse. That was a lie, and the recipients of that message suspected it was a lie but none of them knew enough to be sure. So they chickened out.

The result was that millions upon million of families lost all of their wealth or most of it, all of their credit reputation or most of it, and so far some 15 million people have been displaced, thrown out of good paying productive jobs and are forever taking the cost of this theft on their own backs and that of their generations to come.

On the ground level this translated as a double standard. While there is widespread acceptance of the fraudulent mortgages, notes, debts, bets, insurance and ratings, their is no acceptance of homeowners as the real victims who are paying most of the cost of this theft whether they are in foreclosure or not. In fact even if the citizens are renting or just looking for a job or trying to finance an education that will make them into marketable labor commodities they are paying through lower paying jobs, dependence upon unemployment benefits, Medicaid and other services that are costing all taxpayers trillions of dollars in what would otherwise by GDP.

And if that isn’t enough the Federal Reserve is propping up these bankers with false balance sheets and false reserves with purchases of bonds that were never worth a penny because the asset pool never received funding and never owned a single loan. This is a cover up for more quantitative easing which is the printing of more money which in turn demeans the value of our currency and eventually will result in wholesale changes in world currency and cost of goods and services.

Some lawyer today at court said I know who you are— you’re the guy who hates banks. No. I have sat on the boards of banks and represented banks In Foreclosures both residential and commercial. I have filed hundreds of foreclosure actions for condominium, cooperative and homeowner associations. There are over 7,000 banks and credit unions in this country alone. I only dislike about 15 of them which means I like about 6,985 of these institutions who perform valuable services for a vibrant economy. I don’t even dislike securitization. I just don’t like when securitization documents are used to cover up a financial fraud. Is that wrong?

21 Responses

  1. US Bank and SN Servicing has submitted Forged documents in our federal bankruptcy case too and we will never stop perusing them in court for damages. We are also asking our Federal judge to prosecute their current attorney out of Jacksonville Florida who continued to defend this case knowing that forged document are before a federal court. All the offending parties at SN Servicing and their attorneys are committing a serious crime against our country. We have filed a formal complaint with the FBI and the US attorney general and many great Judges all across this nation are finally stopping them from this kind of fraud on American families. US Bank and SN servicing and their attorneys are also violating a serious consent order that was to protect the people from these crimes but they could care less. Please feel free to have your clients join a class action suit so that we can end their behavior with a multi billion dollar punitive damage suit. Join us, call Ray Shelton in Florida at 352 274 8467

  2. masterservicer, on December 13, 2013 at 3:27 am said:

    See your mortgage statement from 2009 and beyond. Therein is a embedded code that is prima fascia in support of dual tracking a contra assets account

    PRIMA FACIE. Look up “fascia” once and for all, shall you? An “expert” allegedly testifying in court that something is “prima fascia’ evidence of anything is sure to help homeowners a great deal… Any wonder serious fighters don’t trust anything coming out of that guy?

  3. Niedemeyer – you want to demurrer everything I tell you while you lose you home – WTF

    God almighty …take 10 percent annual over five years traded into LIBOR swaps for 30 day commercial paper yielding 88 BPS

    Using MersCorp to trade in and out of 1031 exchanges

    Sorry its 1.265 million preferred shares ….

  4. KC LOL okay Got it

  5. Five percent coupon on the note plus five percent discounted deed
    for a notional value paid on demand

    Can you add …dual consideration -something you never brought up in court …now did you

  6. JG, RE; ” forensic title examiner” ?

    And you are asking me, a simple title abstractor Legal Questions?

  7. Let’s start here Neil:

    The result was that millions upon million of families lost all of their wealth or most of it, all of their credit reputation or most of it, and so far some 15 million people have been displaced, thrown out of good paying productive jobs and are forever taking the cost of this theft on their own backs and that of their generations to come.

    Now, let’s take into consideration all the millions of folks who have lost their insurance through no cause of their own (affordable health care and they are removing affordable from health care) and now taking more of their money to just get “new” insurance.

    Do we not see a “criminal” pattern here!!!!! Is this a taking of our wealth to destroy our country….? Revolution…..when will it start?

    forensic title examiner

  8. justme you got it and explained it oh so well! This thing is coming to a head and gaining speed. I think even some were thrown out by the HUD 11711A that talked about in the event of financial problem that the issuers conveys to Ginnie Mae any and all financial interest. But under UCC 3 the Notes have already been relinquished and the possessor of the Notes does own the Notes but must by the debt in order to own the debt. However Ginnie Mae screwed itself because they spell it out why they don’t and can’t purchase this debt and they don’t originate, buy or sell any home mortgage loans, plus they go on to make sure the world know the do not sell any mortgage back securities.

    Having worked at Wells Fargo, and with other bank selling the mortgage loans, it was the mid size bank I worked where we the mortgage loan officers closed (not title companies or attorneys)all the thousands of home loans were there was never one single wire ever no matter who we were going to sell that loan to in the future as we were working as a correspondent agreement where we were the lender but we locked the loan rate under what ever program option we were doing (Prime FNMA, FHLMC, FHA, VA etc,).

    Because the banks was so cheap (good thing now) we had to close every loan instead of paying a closing agent $200 per loan we saved that monies and never was a wire used. Even when we closed a purchase on a new constructed and they had a working relationship with a closing agent we would walk the bank check over to the closing.

    I know it was this function of the bank that best explains how this mess all break down. I think if I had not had to come up through a broker to small bank to large bank and key back to the small bank I would not have been able to put this all together because Wells Fargo banks retail and there wholesale dept in pricing was night and day, and the going back to and placing loan with Wells Fargo now as a correspondent at the lowest rates in the country, opposed to in the retail dept of Wells and the pricing was so high. It was being able to beat Wells Fargo for its own customers in pricing, but placing the loan back with Wells Fargo itself!

    Now maybe as MS is saying about offshore account is true, and I am not saying that not in all cases with Fannie or Freddie because I have not been concentrating on them, but I am zeroed in on Ginnie Mae because from a borrower all the way through that process I seen how this entire thing plays out.

    The best information I have received in the crime is from Ginnie Mae employees who thought they were steering me away from the truth, but one contract attorney with the outfit early on gave up to mush correct information in a letter, as she must not have gotten the memo in 2010 when she wrote out this process. At the point the letter was written there were no claims that Ginnie Mae was in anyway violating law!

  9. MS, thin skinned? Nope! Try Again! Doc says I’m hard headed with thick skin. 🙂

    But I did error in my statement. I worked for them indirectly thru the Title Companies,

    Just Me, taxes.. YES!
    Don’t forget who should be listed as loss payee on your Ins. The Estate is the Mortgagee and Loss Payee. 🙂

  10. who was it, KC I think? That wrote a while back to have the tax payments stopped by the servicer and pay it yourself.
    I am pondering this, sounds like a good move, a good one indeed.

  11. Charles makes sense. GNMA is a completely different world from Fannie & Freddie. There MUST be a certain form filled out to approve any loans being pooled w/ Ginnie. This form spells out very clearly the issuer – or whoever you want to call it- signs it and and in doing so relinquishes all interest and right to the mortgage when they pool it. Period. Sure, the documents may go to the Document custodian and the securities are funded through the depository, but the note does not say this because ultimately they are owned to GNMA. If the issuer becomes delinquent GNMA must have immediate right to the incoming mortgage payments to either assign the pools to a different issuer to take over or call them TBA or TBH.
    Because Ginnie never funds anything, and the endorsement in blank- FOR GNMA- specially for GNMA -That blank endorsement is the literal relinquishment of any and all rights to every part of the note, mortgage, and payments to them, leaving ownership with Ginnie. But the note does not show GNMA – it is blank. That is GNMA’s FLAW, and that is what Reed has been saying. The mortgage ‘equitably’ follows that ‘blank’ into these pools – the mortgage is a big ol’ blank. There is no one to endorse the note back to anyone because the only one who can- even if they might claim ‘person entitled to enforce’ ……..that aprty relinquished their rights already…..and GNMA, they didn’t fund squat. They cannot foreclose – left and right they claim ‘GINNIE dos not buy or sell ……anything’. Pooling with Ginnie is different from F&F. F&F BUYS the notes/mortgages…GNMA does not. GNMA owns the note. A separate entity pooled, sold, and relinquished their rights to the mortgage. Baggghta-bing. Bagghta-bang.

  12. MS ,

    Explain the “additional paid in capital” , without that the numbers make sense … but I see no reason why anybody would pay in 10X … it is unsupported in your reasoning.

  13. I worked for the 15 Snotty Nosed Arrogant Undisciplined Brats for awhile to.

    thinned skinned

  14. Follow the cash flow. . . .from 100,000 to $1.1 Million

    ABA Wire into Settlement ______(100,000.00)
    Confirmation Local Recording ___100,000.00
    Basis in Asset – Mortgage Loan_ (100,000.00)

    Mortgage Whole Loan Recv.____100,000.00

    Payments earned at 5% Ann_____ 5,000.00
    Servicing Income 240 mos____ 100,000.00
    Credit into Depositors Acct___ (100,000.00)

    Confirmation UCC Recording __ 100,000.00

    Paid in Capital Account
    Dividends Paid at .05% Ann_____ 5,000.00
    Common Stock -Par Value_____100,000.00
    Additional Paid in Capital____ 1,000,000.00

    Combined Paid In Capital ____ 1,105,000.00

  15. People

    See your mortgage statement from 2009 and beyond. Therein is a embedded code that is prima fascia in support of dual tracking a contra assets account

  16. Charles

    I copied what you wrote and tried to dissect and discern the information and claims your making.

    Honestly, you make no sense …no sense.

    I know what I know as I was a party to this in 1996 through 2002 when i got out

    Your guessing and taking in the abstract and …you make no sense.

    Please – you need consideration to form a private placement. That consideration is thew wire into an offshore account

    If the wire was to settle the HUD 1 then the bank borrowed from the household. This would never fly so the conversion of debt into equity caused the title to transfer via a reg 1031 exchange

    You the household transferred the title to your home by electing a nominee MersCrop

    The plaintiff is suing for a wrongful foreclosure and the Judges know the real party of interest is a foreign national bank for obligations charged under TARP in 2008

    Your winning claim is for contesting the right of a rouge attorney to repossess an abandoned title or fulfill and adverse possession claim if the title holder was never given the right to repurchase

    How many years did you spend trading whole loan assets and for who?

  17. Neil, you say .that you ” . . .represented banks In Foreclosures both residential and commercial. I have filed hundreds of foreclosure actions for condominium, cooperative and homeowner associations.

    So can you please explain something to me? You purported to have represented banks In Foreclosures and have filed hundreds of foreclosure actions for condominium, cooperative and homeowner associations. If your in Arizona there is no need for a attorney to be involved in a foreclosure proceeding. In my entire career

    Over my career , I personally funded over $1 billion . I worked for three banks over 25 years and of all the loans that passed my desk through 2002 I saw only , maybe 12 foreclosures in my entire career.

    Banks do not make bad loans , at least through 2002 , until the advent of this mass foreclosure phenomena that started in 2007. But where attorneys are used in attorney states as closing agents they are never involved in a foreclosure.

    The bank is (basically) its own trustee until the time of the actual sale and the loan is transferred over to a trustee or foreclosing agent who handles the Sheriff sale – with exception in judicial states.

    Filing hundreds of foreclosure actions in a non judicial state makes no sense. Filing hundreds of foreclosure actions for a bank prior to 2000 is unheard of and would make the front page news- assuming you represented a bank burned by a string of fraud.

    Prior to 2008 you were involved in the advent of bank ATM machines and that is something to your credit But your partner called me after you started Livinglies (unsolicited) and informed me that you got the idea to jump into mortgages after reading about the Boyco decision .

    According to your law partner you thought this would be the next great money making opportunity.

    Please don’t drop me from your site but where did you get all this foreclosure experience and in what states and for what bank did you conduct this volume of pre-TARP foreclosure actions.

    I am confused with what I know about you and what your saying here about your career .



  18. MS I think we got to take the emotion out of what we fighting and deal more with how the Contract/Notes because it a fact we all borrower money, so it not if the monies exchanged hand it was as a result of the bank make subprime loan and these securities. The loans were not sold off shore but the made out of thin air securities were, and that was done by separated the Note and debt, which made a Note not a Note and without that Note the debt cannot be collected.

    With out the funding no matter were it came from the loan could not be made. Now I think if you were saying the monies were put into the system to created the securities to illegally gain additions profits is another thing, and I would think that would hold water it email or letter of instruction are out there.

    But my argument is that that the bank lent you monies and then changed the dynamics when it signed endorsing in blank the Note and relinquishing that document which created the separation and voiding the Note. Once that Note has no debt attached to it not a Note, and the financial interest in the loan fails to be there because the debt does not have a document in which they are able to physical prove to the court that there is a debt.

    So what does the bank tell the judge that I pawned the loan to this securities by relinquishing the Note in blank in exchange that I could sell the the securities? So how is it ever possible for the Note to be re-endorsed back when the party that been given the Note did not purchase the debt, and itself is not list anywhere on the Note cannot leave blank the blank endorsement and skip over it and endorsed back to the bank or another party altogether?

    The banks made bad loans that were subprime and they blew up, which caused wide spread default and that turned into wide spread unemployment which is the main reason for the default of most of the foreclosures. So I look at it as the bank broke both your legs and arms and they prevented you from working which cause the payment to be defaulted. However even before the default that debt was forgiven on purpose or mistake, but for what reason it does not matter because its not emotional it Contract law that the Note and Debt or not attached so their is not Note or Debt. The debt was exchanged for the securities draws, but the draws were a separate financial agreement with the “issuer/lander” and the “investor” who is not purchasing home mortgage loans, but securities!

  19. Neil, your point is well taken even though the math is a little “fuzzy”.

  20. December 12, 2013

    Analysts who are securities and accounting specialists affirm that title companies believed back in 1992 that this economic disaster plan in the making that took title from homeowners and saddle them with the banks guarantee for bank to bank debt sold offshore, would fail the moment the household discovered they were guarantors and creditors and not debtors.

    The claims I make in court cases which I am testifying in are supported by all operation of law clearly target the time and place a gratuitous surety is held to entitlement to any and all subordinated foreclosure rights subject to subrogation and / or your denied entitlement to salvage rights. If denied the right of fulfilling claims , the household is free to reclaim the equity seised of the estate at time of the origination.

    – The equity in the home is encumbered by a lien.

    – The mortgage reads the property is free of liens and encumbrances

    Common stock is equity mark to market valued at the face of the subject note amount If the collateral is encumbered by mortgage debt and the debt is stripped from title, title is seised of estate, leaving the sponsor with the conversion of debt into equity held in a depositors account.

    The deposit is converted to common stock and the shares are pledged to foreign national central banks at a 20 % or greater discount prepaying the mortgage out five years. This is the cause for the formation of the indenture or what you guys call trusts. Claims are brought against the debentures financing in an argument that would bore a wall street second year analyst is who would say “So what”.

    The case to be made if that real property laws held under the state do not cross over into article 8 and UCC filing for the issuance of common stock held by the notes holder.

    The argument is valid and to what i testify to in a court of law. The claim the borrower owes the money fails – unless lenders can defend dual consideration.

    Indeed this is dual tracking for counterclaims for issuing a zero coupon bond and five year demand deposit that rolls every five years while enforcing an unsatisfied lien of record left over from the loan ordinations HUD 1 statement .


  21. Good Boy Neil. Let It All Out!
    I’m with You … I worked for the 15 Snotty Nosed Arrogant Undisciplined Brats for awhile to.

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