Federal Agent Misconduct in Favor of BofA and McCarthy Holthus and Levine law firm?



This is a story about abuse of power or abuse of apparent power. The object is to cover-up crimes that remain largely undetected because the complex maze created by the “Thirteen Banks.”The stakes could not be higher. Either the current major Banks will be sustained or they will come crashing down with a feeding frenzy on a carcass of a predator that stole tens of trillions of dollars from multiple countries, hundreds of millions of people, and millions of homes across the world that should, by all accounts under the Law, still belong to the owner who was displaced by foreclosure. The banks are willing to do anything and they are paying outsize fees and other legal expenses (topping $100 Billion now).

The agents involved — Mike Lum from Homeland Security, Tim Hines, FBI Agent, and Sean Locksa, FBI agent — were either moonlighting (the agents say they were acting in their official capacity) and using their badges in appropriately or they were sent to intimidate litigants with Bank of America represented by McCarthy Holthus and Levine. A few years back, I received reports that the law firm, and in particular attorney Levine, had sent letters to local prosecutors to request action against people who were defending their property from foreclosure. The agents admitted to Blomberg today that they received a “tip” and that “it” was “no longer” a criminal manner and that they had ended their investigation.

In one prior case I saw a letter and I believe I might have seen an affidavit signed by Levine. The result was a series of indictments against one individual that were later dismissed. I have no information on the other cases all dating back to around 2010. I know one of the people, the one who I know was indicted, spent the last bit of her money hiring a criminal attorney to defend her. The case was “settled with a dismissal.” She subsequently lost two homes that were previously unencumbered in a foreclosure where different parties stepped in to foreclose than the ones who asked for lift stay in her bankruptcy. None of the parties were creditors or properly identified.

I now believe I have enough information to connect the dots, and raise the question as to whether members of local, federal and state law enforcement are colluding (or are being wrongfully used by the suggestion of false information) with Bank of America and at least one law firm — McCarthy Holthus and Levine — in which litigants and perhaps witnesses are intimidated into submission to wrongful foreclosures. The information contained in this article relates primarily to Arizona and to a lesser degree, California. I have no information on any other such activity in any other state of the union.

It also appears as though Bank of America and McCarthy Holthus and Levine were taking advantage of some sloppiness at the Post Office, for which the Postmaster in Simi Valley has apologized and sent a refund to the complainant, Darrell Blomberg whose story can be read below. The interesting thing here is that Blomberg reports that McCarthy Holthus and Levine directly received a letter that was addressed to Celia Mora, a suspected robo signor who apparently lives in Simi Valley, according to the post office, but whose mail bears a San Diego postmark.

The joint terrorism task force supposedly represented by the three men identified above, will not answer calls relating to this matter. Thus we only have Blomberg’s report and my own information and analysis — and of course public record. We do have a callback received today by Blomberg who reports that the agents answered a limited number of questions.

The information contained in this report is substantially corroborated by another source who, like Blomberg I consider to have the highest integrity and who was also visited this past week by the same agents who visited Blomberg. Since no specific act was alleged in the interviews except the perfectly legal request to the post office to confirm an address of a potential witness and test mailings to see who was receiving the mailings, it is hard to conclude anything other than that these agents were being used officially or unofficially to intimidate litigants who have been successful at defending their homes in foreclosure for years, and to intimidate them into ceasing their factual and investigative help to other homeowners who are also being wrongfully foreclosed.

If these interviews were sanctioned by the terrorism task force, the FBI or Homeland security it clearly represents the use of Federal law enforcement authority for the benefit of gaining a civil advantage — a crime in most jurisdictions. How high the orders went in those organization I do not know. If there were no such orders and these agents were doing a “favor” then they are subject to discipline for misuse of their badge and deliberately misleading the persons interviewed into thinking that this was an official investigation. The agencies involved might be negligent in supervising the activity of these agents. Neither of the sources for this story have any mark on their record except the mark of distinction — one having worked for decades in law enforcement in economic crimes.

Was Darrel Blomberg getting too close to the truth?

In litigation, one of the points raised by Blomberg was that Celia Mora — allegedly signed an affidavit perhaps by herself and perhaps as a robo signor. The issue of forgery didn’t come up. There was a San Diego post mark same day as the affidavit was allegedly signed 160 miles away. Blomberg’s position was Mora had no actual authority no actual executive position or managerial position, and signed clerically under instruction without knowledge of the contents. That is it. The fact that McCarthy Holthus and Levine actually received the letter addressed to Mora through normal postal service leads one to believe that the affidavit may have been created at the law firm and perhaps even signed there in Arizona. Hence any criminal behavior suggested was not the work of Blomberg but could have been the work of the law firm or Bank of America. To my knowledge there is no investigation pending relating to the use of the mails, false documents, improper signatures, lack of authority or any of the issues presented by Blomberg.

From there it became a vague charge of harassment communicated by three Federal Agents. Harassment was the word used by the agents in the interview with Blomberg and the interview with my other source. But no specific act was stated even in passing as to what act would be investigated as harassment, no less a matter of national security. More telling, when the agents left both interviews, neither source was instructed or requested to stop any specific act. That leads to the question, if there was no conduct they sought to stop, why were they there at all?

Note that McCarthy Malthus and Levine has been replaced by the law firm of Bryan Cave since June, 2013 in Blomberg’s case. Generally speaking Greg Iannelli, Esq. handles the more sensitive pieces of litigation that could blow the lid off of the fraudulent scheme of securitization.

Read Blomberg’s account here —> 2013-08-29, Unexpected Visit from the National Joint Terrorism Task Force

Background and analysis: Why do the banks continue to use low paid clerical workers to sign affidavits and other documents for which they obviously lack authority or knowledge? Why won’t a true executive with true authority and actual personal knowledge based upon his or her own actual observation, investigation and analysis to make sure the foreclosure is proper as to the property, the persons, the balance due and the existence of a default — especially with reference to the actual creditor’s books of account?

Convenience doesn’t cover it. With legal costs topping $100 Billion it would be impossible to pass the giggle test on any explanation of convenience when it comes to the paperwork. My conclusion is that it is worth getting embarrassed in court as long as the number of times is small enough that the overall scheme is not toppled. The use of clerical personnel to sign and approve documents relating to foreclosure is akin to allowing teller’s decide whether you can have a loan on that new car or new house. It doesn’t happen. If it doesn’t happen when the “loan” goes out, then it is fair to assume that the same standards would apply when the loan turns bad and comes back in.

Think about it. The Banks are reporting record profits. U. S. Bank reported $42 Billion in just one quarter. They are attributing their profits to proprietary trading — something I have attributed to laundering the illicit retention of funds that should have been used to pay investors the principal and accrued interest that was due on the promise of investment banks when they issued bogus mortgage bonds. That money was received by the Banks as agents for the investors and therefore, whether paid or not, is a credit against the account receivable owned by the investors.

The Glaski appellate attorneys gratuitously admitted that the true owner of the debts will never be known. Yet the true relationship between the homeowners and the lenders is regarded as known and enforceable. In short, the position of the Banks is that we don’t know who this money belongs to but it must belong to someone so we are going to collect it and foreclose. We’ll get back to you later on what we did with the money. The Banks are required to take that idiotic position because (a) it is still working in court and (b) they get to avoid liability to investors, guarantors, insurers, borrowers and government agencies that could exceed $10 trillion. So $100 Billion in legal expenses is only 1% of their exposure. It is easy to see how the Math works. If the legal expenses were a far more significant portion of the money the Banks were holding then they would find another way to deal with it. 

If the false trading and laundering of money was properly entered on the books as merely repatriating money that was hidden, the investors would be spared the losses that threaten our pensions and cities. It would also alleviate or eliminate the corresponding account payable due from homeowners, city budgets and other “borrowers” who were the unwitting pawns in a scheme to defraud investors. The collateral damage to all citizens, all taxpayers, all consumers, all workers and all homeowners has been obvious since 2007.

The extraordinary story is aggravated by the knowledge that the legal expenses of the Banks has now topped $100 Billion. Like I said, think about it. Nobody spends $100 Billion unless it is worth it. It is worth the price because of the amount of liability they are avoiding, and the amount of money they stole that went offshore. The amount of the theft can be estimated in a variety of ways, and the results are always the same. They siphoned trillions of dollars from many countries. In the U.S. alone it appears that the total was in excess of $17 Trillion, which is $3 Trillion MORE than the total amount of lending on residential “loans.” Extrapolating the most recent profit report from U. S. Bank from a quarter (three months) to a year, that one Bank is reporting annual earnings from “proprietary” trading in excess of $160 Billion per year. That is one of 18 Banks that were involved in this crime against humanity. Do the math.

So the Banks retain money that they never legally earned at the expense of deceived investors, Cities and sovereign wealth funds AND at the expense of the “borrowers” in the “underlying” deals. And by not crediting the lenders, the corresponding reduction of the account payable from “Borrowers” is also absent. No consent for principal reduction is required because the balance has also been reduced or extinguished by payment. Follow the money trail and the results was astonish you. This is like organized crime with all the trimmings of governmental complicity.

Now I am reporting that based upon a pattern of conduct that appears particularly egregious in Arizona, this unholy alliance between the people who committed the wrongs and government is becoming apparent. Who would have imagined indictments and “investigations” of people litigating their cases against the Banks after the scale the crime became apparent in 2008-2009?

CAVEAT: The agents in the Blomberg interview insist they were acting in their official capacity and I take them at their word. My problem with that assumption is that it means the system is susceptible of manipulation by attorneys who have no problem playing dirty tricks to gain a civil advantage. Or, worse, it means that there are high level people in the system who are willing to look the other way when this behavior pops up.

By this point in the savings and loan scandal in the 1980’s more than 800 bank presidents and loan officers, along with mortgage brokers and originators had been convicted by a jury and were serving their sentences. This time the tally is zero. But the reverse is not true. Mortgage brokers and originators and investors who played the system against itself have been investigated, prosecuted and sentenced to prison. And even homeowners have been accused of crimes that were identical to the crimes committed by Banks on a much larger scale. Steal a million, go to jail. Steal a Trillion and get immunity because the finance system might not survive removing the criminals from our society. No longer a nation of laws we have become a nation of men, corrupt men, who continue to accumulate wealth and power as they channel their illicit gains into reported Bank “profits” and control over world natural resources.

For about three years I have been investigating an unholy alliance between a law firm, McCarthy Holthus and Levine, Bank of America, U.S. Bank and law enforcement. It appears as though they have some special influence and that local, state and Federal law enforcement agents are acting as collectors and intimidators outside the boundaries of the law. Prosecutors have followed this line of attack against those pro se litigants who are getting close to the truth that the foreclosures — all of them — were bogus, if they were based upon mortgages and deeds of trust carrying claims of securitization, arising from Assignment and Assumption Agreements, Pooling and Servicing Agreements, and false prospectuses to investors.

The attached report from Darrel Blomberg, a person of unparalleled integrity, tells the story of agents from the FBI who (whether they realized it or not) are clearly acting at the behest and for the benefit of Bank of America, who was represented by McCarthy Holthus and Levine. In the past week, the agents have been visiting at least two people based upon a “harassment” allegation. The agents declared themselves to be part of a joint terrorism task force. The act of harassment was a request for confirmation of address and confirmation of address that ended up both in the offices of Bank of America and the office of McCarthy Holthus and Levine. It was addressed to the U.S. Postmaster who apologized for gaffes in processing the requests and even refunded money to Blomberg. No investigation has been threatened by the U.S. Postal inspector against either the Bank or the law firm. And none has been threatened against Blomberg.

Having a few pages of the attempt to get address of a robo signor whose signature appears to have been forged, these agents have interviewed two people in Arizona that have been known to provide factual assistance to other homeowners and whose own cases have been spread out over many years as the Bank continues to fail in its attempt to claim ownership or verify the balance of the debt. These agents identified themselves as having been dispatched from the FBI, Homeland security and the joint task force. Whether they were merely moonlighting or were in fact dispatched by their superiors, it is clear that no criminal matter was under investigation, and that their purpose was to intimidate two people who fortunately are not easily intimidated. Based upon my investigation it appears as though that law Firm, McCarthy, Holthus and Levine who is frequently replaced by Bryan Cave, has been doing dirty work for the banks through contacts in law enforcement.

It is happening and this should be stopped before it becomes a commonplace act throughout the country.

In the final analysis the issue of ownership of the loan is going to unravel this mess because it is only then that we can look at the books of account and see what money is owed on the original account receivable for the creditor/investor/REMIC.

The analysis of ownership does not merely look to the agreements the parties entered into because the label parties give to a transaction does not determine its character. See Helvering v. Lazarus & Co. 308 U.S. 252, 255 (1939). The analysis must examine the underlying economics and the attendant facts and circumstances to determine who owns the mortgage notes for tax purposes. See id. The court in In re Kemp documents in painful detail how Countrywide failed to transfer possession of a note to the pool backing a Mortgage Backed Security (MBS) so that Countrywide failed to comply with the requirements necessary for the mortgage to comply with the REMIC rules. See In re Kemp, 440 F.R. 624 (Bkrtcy D.N.J. 2010). Defendant in this case has done exactly what was adjudicated in Kemp, failure to sufficiently show a timely transfer that complied with the strict language of the trusts’ Agreements.

As the Kemp court notes, “[f]rom the maker’s standpoint, it becomes essential to establish that the person who demands payment of a negotiable note, or to whom payment is made, is the duly qualified holder. Otherwise, the obligor is exposed to the risk of double payment, or at least to the expense of litigation incurred to prevent duplicative satisfaction of the instrument. These risks provide makers (Plaintiff in this case) with a recognizable interest in demanding proof of the chain of title” (specifically referring to the trust participants). 440 B.R. at 631 (quoting Adams v. Madison Realty & Dev., Inc., 853 F.2d 163, 168 (3d Cir. N.J. 1988). And because the originator did not comply with the legal niceties, the beneficial owner of the debt, the trustee, cannot file its proof of claim either.

Foreclosure Freeze and Modification Movement Gains Momentum

The simple reason is that the paper is worthless. The race is on. The lenders and government don’t want you to know those debts that are making your palms sweat are probably unenforceable. We have been tracking cases where the debt has been challenged on the grounds of payment, holder in due course, predatory lending practices or fraud. Not one has gone to trial. All have settled — or the Lender has simply caved and left the homeowner free to get clear title.

Everyone wants you to settle and sign something new because the dirty secret is that everyone knows or at least suspects that all the old paper is worthless. Keep up the fight — you are headed in the right direction.


Foreclosure Freeze Movement Takes on Wall Street

by Scott Sabatini, 2008-11-19

Earlier this summer, Countrywide Financial’s most famous troubled customer received an altruistic bailout that saved his home. Now months later, despite attention from the highest levels of government, hundreds of thousands of anxious homeowners are still waiting for their reprieve.

Back in August, high-profile developer Donald Trump purchased the 7,000 square-foot home of “Tonight Show” sidekick Ed McMahon. He then leased it back to the 85-year-old TV personality, allowing McMahon to avoid foreclosure. “How could this happen?” Trump asked at the time.

Not-so-famous homeowners across the country are asking the same question. Few are getting specific answers.

Foreclosures continue at a record pace, according to the latest data. Just last month, 84,000 homeowners lost their homes despite calls from Congress to freeze foreclosure activity, a $700 billion bailout that was intended to buy toxic debt and an $8.68 billion legal settlement with Countrywide Financial Corp., the country’s largest mortgage broker.

Undeterred, the grassroots Foreclosure Freeze Movement that started in San Diego, Calif. with a simple protest less than a year ago has enjoyed enough success to press on.

The progressive idea of stopping the glut of foreclosures seemed like the wishful thinking of a radical fringe that gathered in San Diego in December 2007 to protest Countrywide’s predatory lending practices. Faith Bautista, executive director of the Mahubay Alliance, organized the protest in the hope of drawing attention to victims of a coordinated plan to sell risky, high-cost loans.

“We want to send a message that it can be done here, that this pattern can be changed.” Bautista said. “The City Council has to realize that every half hour another family is losing its home and something needs to be done.”

The conservative-bent city council and mayor were less than enthusiastic supporters. But the city’s rogue city attorney, generally despised by the mayor, the conservative newspaper and the business organizations, enthusiastically joined the effort.

Aguirre, a Democrat, became the first city attorney to sue a major lender when he sued Countrywide along with attorneys general from Illinois and California. Many other states soon filed suits of their own.

A string of victories followed for “The Movement,” as Aguirre and others like to call it. States like Massachusetts and California approved legislation restricting lenders from foreclosing on homes without taking steps to mitigate the loss.

California Attorney General Jerry Brown then released “shocking new details” that outlined the extent of Countrywide’s fraudulent and institutionalized predatory lending practices.

Emboldened by the high-profile attention, The Greenlining Institute and The California Reinvestment Coalition dashed off a letter to Brown and to Bank of America Chief Executive Ken Lewis demanding a temporary moratorium on Countrywide foreclosures.

Though both Brown and Lewis spoke with The Greenlining Institute’s General Counsel Robert Gnaizda, neither supported a freeze on foreclosures.

But others did. The Federal Deposit Insurance Corp., which seized California-based mortgage lender IndyMac, gave national prominence to the foreclosure freeze philosophy. FDIC Chairwoman Sheila Bair initiated a temporary moratorium on foreclosures combined with a process of revising loans. In November, Bair told Congress the program had already helped more than 3,000 homeowners avoid foreclosure.

Sensing the momentum and frustrated by Brown’s unwillingness to act, Aguirre sided with Gnaizda and sought a temporary injunction in court against Countrywide foreclosures.

“Saving neighborhoods by keeping families in their homes is a better option than foreclosure,” Aguirre said, “and a national consensus supporting that wisdom is galvanizing. We are better served if we turn off the automatic foreclosure switch.”

Illinois Attorney General Lisa Madigan also sought an injunction, a move Brown refused to do.

“It’s really easy for Aguirre to make statements and what not,” Brown said, “but we have to act in a responsible way.”

But Aguirre wasn’t done. In September, he lobbied the San Diego City Council to declare a “foreclosure crisis.” The city attorney made his pitch during a council meeting, in which activists like Gnaizda and Bautista, a representative of the FDIC and members of the state Assembly spoke in favor of the resolution.

The council sent the issue back to a committee for further review. But, despite the setback, The Movement had expanded far beyond San Diego and the state of California.

Democratic Sens. Charles Schumer, Robert Menendez, Sherrod Brown and Bob Casey requested a temporary foreclosure freeze for Fannie Mae and Freddie Mac. The moratoriums, the letter stated, would allow “time to modify loans and make them affordable for struggling homeowners.”

Brown jumped back into the fray when he Madigan negotiated an $8.68 billion settlement with Bank of America, owners of Countrywide. Brown said the deal was the largest of its kind, far surpassing the $484 million settlement with Household Financial Corp. in 2002.

“This loan-modification program provides real relief for borrowers at risk of losing their homes,” Brown said.

Aguirre even called it “a home run.”

Aguirre followed his suit against Countrywide by suing Wachovia and Washington Mutual as well. Attorneys general from more than a dozen states issued a strong statement to 16 major lenders urging them to rework all predatory loans — the threat of additional lawsuits a clear and present alternative should they resist. At one point, Gnaizda said as many as 75 to 90 percent of all looming foreclosures could be avoided if the momentum continued.

But, as could be expected, investors facing the loss of billions in revised loans met The Movement’s swift rise to prominence with fierce backlash. Lawyers representing hedge funds spoke out against loan modifications and Bank of America issued statements putting them at ease, downplaying the prominence of revising loans.

Then on Nov. 4, The Movement lost its biggest ally. Voters bounced Aguirre out of office. His successor, Republican Judge Jan Goldsmith, vowed to drop the lawsuits against the mortgage lenders.

“I was not anticipating getting the shit kicked out of me in the election,” Aguirre said. “I got it from every angle: North, South, East and West. I united people who never worked together before. Unfortunately, I united them against me.”

The fight continues in daily negotiations, court proceedings and Congressional actions. This week, Gnaizda of the Greenlining Institute, went to Washington, D.C. and met with FDIC’s Bair, Speaker of House Nancy Pelosi and Rep. Barney Frank to lobby for The Movement’s goals.

“We cannot accept the Bank of America settlement as the gold standard,” Gnaizda said he told the political leaders. “Despite what Attorney General Brown says, Bank of America only expects to address 20 percent of their troubled mortgages. They don’t have the power to address those in the hands of the investors and hedge funds.”

The Greenlining Institute wants Bair and Pelosi to push for a national temporary freeze on all foreclosure activity for a period of 120 days. Legislation to that end is expected to be introduced this week, Gnaizda said.

The Attorney General’s office dismissed concerns by Gnaizda and Aguirre, saying they distort the value of the settlement. The settlement includes language, according to California Deputy Attorney General for Consumer Law Benjamin Diehl, which assures a “substantial majority of investors” are in agreement.

“We have the investors on board,” Diehl said, “so we have a program that is going to save homes.”

Clearly Donald Trump won’t save everyone, so it’s the governments turn. How effective they are remains to be seen, but rarely has a progressive movement caught fire so rapidly and rose to such a high level of prominence.

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