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Attorney General Tom Miller Reneges on Promise to Prosecute Mortgage Fraud (Updated)

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I’m not exactly surprised at the bait and switch by Iowa’s Attorney General Tom Miller, who is leading the 50 state investigation by state attorney generals into mortgage abuses. Less than a month ago promised that he would “put people in jail” Now he’s apparently decided to adopt a “move along, nothing to see here” posture. Per Bloomberg (hat tip reader Duncan B, who also sent a copy of a stinging e-mail to his state AG):

The five largest loan servicers, including Bank of America Corp. and JPMorgan Chase & Co., may be the first to settle with the 50 state attorneys general probing foreclosure practices, Iowa Attorney General Tom Miller said…..The group isn’t pursuing a criminal investigation, Miller said. “Our focus is to reform the servicing process and that’s inherently civil, not criminal,” he said.

That’s funny, reader and former bankruptcy litigator Fractal thinks it would not take a lot of effort to come up with criminal charges. His message was directed at the activities of the foreclosure mills, but since they were operating as the arms and legs of servicers, many of these theories would presumably apply to them as well, since the communication between those law firms and their clients was frequent and ongoing. And he also points out why civil actions (or the threat of mere civil actions, since the AGs are on their way to sweeping these abuses under the rug) are inadequate:

You should not waste precious web space on anything less than actual criminal investigations. If the AGs office wants to investigate any entity for fraud or other crimes, it can investigate any alleged crime regardless of whether the alleged defendant is a “trade or business” or a gang, criminal enterprise, racket or any other kind of entity or form of association. Criminal investigative jurisdiction is not limited in the ways that “regulation of commerce” inquiries may be.

The scale & scope of the fraud by the foreclosure mills means they could be investigated by state or federal grand juries, such as the grand jury already convened in Jacksonville. I don’t recall whether the Jacksonville GJ is state or federal. A federal grand jury would have parallel jurisdiction under federal criminal law. The frauds committed by the foreclosure mills are so extensive, so intertwined with interstate communications, and so entangled with national banks, that wire fraud & mail fraud are obvious hooks for the FBI to commence wiretaps, mail covers, surveillance and to use cooperating witnesses to record conversations with targets.

The essential point is that the law firms are entirely exposed to criminal liability & investigation; law firms, their partners & associates, their banks & their accounting firms do NOT have immunity from investigation or prosecution if there is probable cause to believe they engaged in, or aided & abetted, or concealed, or obstructed investigation of, fraud. The best recent example is what happened to the Ft. Lauderdale law firm Rothstein Rosenfeldt Adler, its partners & associates, its accounting firms, and the banks & hedge funds which enabled & participated in name partner Scott Rothstein’s Ponzi scheme which fleeced thousands of investors of more than a billion dollars.

And as we’ve written, attorneys representing homeowners have found evidence of widespread, and what appears to be systematic violations of contracts and Federal law in how servicers apply payments and charge fees to borrowers, with the net result in more than a few cases that homeowners lose their house due to the pyramiding junk fees rather than bona fide delinquency (as in any arrearage was minor and ex the abuses, could in many cases have been remedied). These attorneys are not able to do a systematic investigation; the state AGs could (and a pattern and practice of fraud would lend itself to criminal charges). But their rush to wrap this up says they indeed have not intent of cleaning up servicing, their pious claims to the contrary.

But the die was apparently cast with Miller from the get go. I was troubled in his testimony before the Senate Banking Committee when he went out of his way to lavish praise on Michael Barr of the lapdog Treasury Department. And this December e-mail gives some insight into Miller’s thinking:

I was w/ a European documentary maker this weekend who spoke to Miller a few days ago and said Miller relayed the fraud isn’t so bad, everything will be worked out .. the standard line; he’s already made up his mind. He doesn’t want those European governments demanding their money back.

So the same pattern continues: we’ll trash the rule of law and throw homeowners under the bus to save bank balance sheets. As reader Duncan put it:

So TBTF banks win yet again and the powerless taxpayers (what’s left of us) get stuck with he bill and screwed yet again. And the AG’s office is considered “law enforcement”, a sad joke on Americans.

What is just as sad, is “we” know this goes beyond “Robo-Signers”, but apparently the AG’s offices across the country have thrown in the towel yet again. The banks and their servicers have done wrong, harm and injustices upon the American people, with this “settlement” it sends a strong message to financial institutions that they are now in fact, untouchable.

Thanks for not having courage when it is needed most by far too many Americans.

Update 3:15 PM: An article by Abagail Field in DailyFinance shows how a federal circuit judge allows plaintiffs in a suit against debt collectors to include RICO claims. So pray tell what excuse does Miller and his cohorts have, exactly?

From DailyFinance:

Federal Circuit Court Judge Denny Chin just issued an opinion in a consumer class action case that should send chills down the spines of debt collectors, perhaps including foreclosure-mill law firms and their process servers, nationwide.

Judge Chin decided that plaintiffs alleged enough information about the debt collectors in this case — a law firm, a process-serving company and a debt-buying company — to sue them for being a criminal enterprise under the Racketeer Influenced Corrupt Organization (RICO) law…

Well, Monique Sykes and the other plaintiffs claim that the defendants’ business model is as follows:

Buy debt with little documentation that the debt is accurate.
File lawsuits claiming personal knowledge of the debt but using robo-signed affidavits instead.
Deliberately fail to tell the “debtor” that the lawsuit is pending (a practice called “sewer service”).
Get a “default” judgment against the debtor when she fails to show up in court to defend herself.
Enforce the judgment, including by freezing the debtor’s bank account.

And remember, JPMorgan Chase (JPM) whistle-blower Linda Almonte said Chase’s records about its customers’ debts were often false, and that executives routinely robo-signed debt-related documents. Also, the The New York Times has more generally reported that inaccurate debt records and robo-signed documents are common. Similarly, sewer service is a common enough practice to have a name. So it’s hard to imagine that the three businesses at the center of this case are the only ones that have this business model and thus are vulnerable to RICO charges.

You can read the opinion here.

The only difference I see between the debt collectors’ approach and that of the services is that the servicers are less frequent users of “sewer service” but instead in HAMP and other mods tell customers to ignore foreclosure notices, and they take the house rather than garnishing wages or attaching bank accounts.

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73 comments

  1. readerOfTeaLeaves

    Disastrous judgment on Miller/AGs part.
    This seems likely, IMVHO, to pour gasoline on the Tea Party fire and give weight to conspiracy theorists.

    1. monday1929

      “Theorists”? Do you think we have “accidental” Fascism?

      Now, there is no reason not to follow ones own Law. I will.

  2. Ron

    If you are running a business and discover that your customers are crooks and should be in jail would you turn them in if it meant that your business would fail and you would face BK and ruin?

    Nobody in power wants to be the one to turn off or down the financial sector power switch as it would mean the end of cheap credit bringing to a close the days of easy money in America.

    1. Francois T

      Nobody in power wants to be the one to turn off or down the financial sector power switch as it would mean the end of cheap credit bringing to a close the days of easy money in America.

      This statement is an Everest-size, steaming pile of grade-AAA, enzyme-free bovine digestive remains, otherwise known in vernacular American English as “pure bullshit”.

      A cleanup of the immense corruption of the financial system would bring back solid and sane credit activities in America. As we go down the path of repeatedly screwing the rule of law, we are guaranteeing ourselves much higher cost of credit for a very simple and fundamental reason: nobody shall trust us if the powers that be can’t clean this Augean Stable that the US FIRE sector has morphed into.

      1. psychohistorian

        Unfortunately it stretches far beyond the FIRE sector. It has been going on in the military industrial complex for decades.

        A fish rots from the head. Who owns the Fed, the banks and all the corporations? Their socio-political control is absolute and I think we are about to see some shock and awe of that control as they bring the EU and the US to their knees.

  3. kravitz

    Is it possible, that to be better able to charge outright fraud, that the AGs need to establish a set of clearly laid out terms and boundaries first. I’m thinking of that New York case Yano-Haroski, where the judge’s ruling was overturned because the bank claimed it didn’t know how badly it could be punished. In this case, could it be that Miller wants to make the rules plain, because they’ll provide a better way to prosecute?

  4. Mike M

    But, but, are all of the AGs somehow bound at the wrists and ankles suddenly? What’s to prevent the maverick loner to just proceed with indictments? Are they all that bought?

  5. steelhead23

    When law enforcement fails, the mob rules.

    Let me be perfectly clear, just as a dude running a meth lab would far rather have the police knock down his door than a rival gang, the banksters may one day wish they had been prosecuted. Lounging in a cell beats swinging from the lamppost.

    1. WTFactory

      My thoughts exactly. If justice is not served by the government, vigilantism eventually takes over. If that were to happen in the US, the financial markets not to mention the economy will be shattered. If the AGs are trying to avoid the certain financial chaos that would occur when grifting banksters are put in jail as they rightly deserve, what do they think will happen if these same bansters are roasted over piles of burning tires by angry mobs?

    2. Francois T

      “Lounging in a cell beats swinging from the lamppost.”

      Perhaps, but lounging for years on end in a cell, “sleeping” between Jamal and Dominique can redefine Hell of Earth, while swinging from a lamppost is mercifully quick.

    1. attempter

      So long as we keep looking upward for “heroes” (or looking to them for “courage”, as in one of the cited comments), nothing will change.

      That’s the real problem, in ourselves. Because we refuse to accept once and for all that all elites are nothing but enemies, representative democracy is a scam, and that nothing will ever be done except what we do for ourselves.

      There will be no courage except our own. There will be no heroes except we ourselves.

      1. rafael bolero

        Well, I am not an attorney general, but he is, so the fault is in him, not me. And a grievous fault it is, and grievously have we paid for it–but surely they are all honorable men….
        People are supposed to do their jobs, not stab their people in the back….

        1. monday1929

          You will soon realize that he is doing his job, when you realize who he works for.

          Fascism is Here.

  6. Lyle

    It may very well be that the ability to prove criminal behavior beyond a reasonable doubt is not clear. Recall that the government got its head handed to it in the Bear Stearns Hedge fund case. The Attorneys General may well have felt that after the challenges to the jury pool, they could not expect to get 12 votes to convict. Note the mention of violation of contract law, in no sense is that ever a crime in general. It for example requires that the contract be to commit what is clearly a crime to make the contract a criminal offense, such as a contract for a hit. Clearly there was a lot of slipshod work involved but the AGs may have found that trying to prove a crime to be to high of a bar.

    1. ScottS

      After the Citizens United decision and the unions are crushed, I wouldn’t be surprised to see D’s do anything to make up the gap in FIRE bribes (campaign contributions) between D’s and R’s. Expect some shocking stuff to come out of this year’s race to the bottom, especially from the “left.”

  7. Michael H

    Miller is just another lying scumbag like the rest of them.

    “Remove me from this land of slaves, Where all are fools, and all are knaves, Where every knave and fool is bought, Yet kindly sells himself for nought” – Jonathan Swift

  8. Edwardo

    “Let me be perfectly clear, just as a dude running a meth lab would far rather have the police knock down his door than a rival gang.”

    Let me be perfectly clear, the police are the rival gang.

      1. craazyman

        being a Magonian, I think you both are poster children of crown chakra energy blockages.

        Seriously, Dump, keep up the good work. Love your post at 5:55. :-)

  9. Dirk

    The problem is probably that the courts, esp the current Supreme Court seem to think that there is no such thing as white collar crime. Roberts has already come out in favor of outright bribery by corporations (what else is Citizens United other than an endoresment of bribery) and the decsisions limiting “honest services” prosecutions make it extremely difficult to get convictions in white collar cases. Of course keep in mind that these defendants are not going to be represented by some poor overworked PD like a real live person would be if prosecuted for a crime, corporate “persons” always have the best representation that money can buy.

    1. scraping_by

      This is the result of the Repub’s judicial selection policy for the last forty years. And the Dem’s passive acceptance of it.

      Read Cass Sunstein’s Radicals in Robes: Why Extreme Right-Wing Courts Are Wrong for America. Ever since Nixon, a far right viewpoint has been the first step of the selection process. The fact that laws are enforced as opinions, not facts, is obvious to any non-lawyer who reads a brief. This means the judge’s slant will become the final decision, dressed up as impassive inquiry.

      Miller and fellow lawyers might be giving up before they begin, knowing any verdict would be brought before one of Bush II’s corruption champions. Or they might be bought.

      1. Geoff

        Wow. You think courts have been leaning RIGHTWARD for the last 40 years? Jane, you ignorant slut…

        1. Patriot

          And in your view, law-and-economics is a leftist movement? Please provide support for your claim.

    2. Dirk

      Hey, I thought I was “Dirk”! But then it’s only four letters and there are six billion people in this world. Okay, I’m now Dirk77.

  10. Guy Baker

    Since most of the people writing comments here admit that while they HOPED for more, they are NOT surprised, I invite them to discuss it’s significance in terms of what will happen NEXT regarding the following:

    1) Will the sellout AG agreement include some type of massive loan modification deal, IN EXCHANGE for the promise not to press criminal charges, etc?

    2) How will the problem of BofA’s insolvency and the remaining RMBS problem, and the Countrywide liability problem be solved?

    3) Will Wells Fargo, Citi, Ally Financial, Chase and BofA hang onto their mortgage servicing units? If not, who is preparing to buy them or their assets?

    4) Have Dems won more time to reform Fannie, as a return favor for the gift Fannie just gave BofA and other servicers?

    As many of you make clear, banks, regulators and politicians are colluding to produce a favorable outcome for them. If you assume that they will continue to do so, what will be the outcome of the situations I enumerate above?

    Thank you.

    1. kravitz

      Separate lawsuits coming from the AGs of some states seems part of how this ‘agreement’ could be coming together. Not all 50 AGs want to take this deal. Or, it’s structured so there’s one set of ‘general rules,’ and each state can pursue separate criminal cases based on the laws of that state. Which means not trampling on states’ rights.

    2. f247

      1) That includes principal reduction? Unlikely, if this is the progression. Would need to apply A LOT more heat before something as scathing as principal mods would feel like relief.

      2) BofA’s insolvency is a non-issue if you regard it as a ward of the state. It’s not surprising to see BofA reach a GSE-putback settlement so soon after Ally. Explicit/Implicit.

      3) Isn’t the Ally/GMAC/ResCap servicing unit on the block? I thought that was why they settled the rest of their repurchase liability a few weeks back… In addition to the anticipated future attempt to get Ally off the govt balance sheet ASAP. (See article from last night/today about the Treasury selling some Ally TruPS soon.)

      4) Probably. The ’12 campaign will be all about how-I-got-you-out-of-this-mess with a sweet, fictitious profit taboot. Just don’t look over there. I haven’t finished cleaning there yet.

    3. DumpTheBankInfoJulian

      This site will not let me post without replying to someone’s post, so here goes.

      PLEASE HOLD UP ON YOUR RAGE!!! Just talked to Miller’s office…to the lead investigator. She hadn’t heard ANYTHING ABOUT A SETTLEMENT!!! She asked me to forward the article from BLOOMBERG (the f***ing banker’s media outlet.) She told me she would get back to me with a confirm or deny. Nothing yet.

      Then, I called McKenna’s office (Washington state AG.) I have been assisting the investigation. My normal contact out sick, but I talked to his assistant, WHO ALSO CONFIRMED SHE HAD HEARD NO TALK OF SETTLEMENT!!! She DID say that the AGs office can only bring civil charges. I know that the Dept of Financial Institutions has been involved with the investigation here in Washington. So, I have an inquiry into which state agency CAN bring criminal charges…and I also want to know if the investigation is being referred to those agencies…..so hang on.

      I BELIEVE WHAT WE HAVE IS A BANKING LEAK…to the media…well, well.

      1. Geoff

        Bloomberg TV will be shocked, SHOCKED to discover they were used as a tool by the banking industry. SHOCKED I say!

      2. Dirk77

        Interesting. Thanks for lowering my blood pressure. Well, I mean if I hadn’t already become a Buddhist.

        By the way, you can write a response w/o “replying” to a reader comment by going to the bottom, filling out the form, and then clicking on the submit button.

        1. monday1929

          That’s known as “Jamie Dimon’s rule”. He won a charity auction and was allowed to change one state law in that state. He is currently high bidder in several other states.
          All proceeds to charity, of course.

      3. ScottS

        Well, if Bloomberg just floated a trial balloon, it’s time to shoot it down.

        Show them we won’t stand for anything like settlement. Nail ‘em to the wall!

        1. DumpTheBankInfoJulian

          Each and every one of you bloggers need to get on the horn to your state’s AG office and tell them nothing less than criminal charges will be unacceptable!!

          Action is required.

          1. Yves Smith Post author

            I provided independent corroboration in the post of Miller’s stance and have also gotten it privately from other sources in the wake of the Bloomberg story.

            Did it not occur to you that the Miller staffer is either out of the loop or has been instructed to play dumb?

      4. Bill Kay

        It is my understanding that anyone can file a complaint with a Grand Jury (both Federal and State).

        Can someone with more knowledge on this subject matter share their wisdom?

        If the AG’s won’t file the criminal complaints, what is stopping us from doing this ourselves?

        In fact some of the brighter commenters here appear to have more “testies”… lol… than the AG?

        I’d love to share the knowledge and work together on complaints to be filed across the nation.

        Have you started drafting your Grand Jury Complaint???

        I welcome all comments at:

        providencegroup@ymail.com

  11. dejavuagain

    Judge Chin is not a Federal Circuit Judge, nor is he a Judge for any other Circuit of the United States Courts of Appeals

    He is a United States District Court Judge for the United States District Court for the Southern District of New York.

    The case is:

    Sykes v. Mel S. Harris and Associates LLC et al, Docket No. 09-cv-08246.

      1. dejavuagain

        Yup

        I should have been clearer: he was sitting by designation as US District Court Judge when he decided this last week, even though he was by then a judge on the Second Circuit.

        What he was not was a “Federal Circuit” judge – that is a descriptor reserved for a judge at the US Court of Appeals for the Federal Circuit.

        However you want to describe this, this was a decision of the District Court, not the Court of Appeals.

        It is interesting though that Judge Chin decided to stay on this case!!

  12. Noash

    Just as I expected. Everyone has bailed on the people who are hurting the most. I guess dishonesty, greed, fraud, deceit, and lies really do pay when money is involved.

    To say I am surprised would be a lie, but boy am I disappointed in the people who claim to lead America. Obviously, there is an elite that is not subject to the laws of our land. What a shame.

  13. Justicia

    All it takes is one successful RICO suit to shatter the illusion of invulnerability and there will be a pile on. Unless, the 2nd Circuit Court of Appeals (not known for great jurisprudence these days), finds some way to overturn a judgment against the servicers. Stay tuned.

  14. 60sradical

    So the question remains: In the face of institutionalized fraud, endless wars for profit, an inter-gallactic sized military budget, and the daunting presence of the “man”, how will a broad enough rsistance form? Or ,perhaps, we should ask; just how much more of this rapaciousness can we endure? The shit just inexorably flows. Sad.

  15. eric anderson

    As a Tea Party sympathizer and an Iowan, I am doubly outraged.

    This deserves at least a letter to the editor, and another to Miller’s office. I haven’t followed this particular story as closely as I might, though. Could readers here help me out by suggesting the most powerful examples I might use in such letters? (With a link to media sources, please.) I know there are many posts on Naked Capitalism which probably contain the information I need. But I’m asking you experts to pick out the most egregious examples. I want to be as effective as possible.

    Thanks.

    1. DumpTheBankInfoJulian

      The most egregious violations of servicers IMHO would be the foreclosures whereby the house has been paid for, break-ins to houses prior to the foreclosure sale (this happened in Washington state and the media has denied reporting it), and outright forgeries in our land records. You can google all these instances and be pointed to articles that support them.

      I called Miller’s office yesterday….and today. I am still waiting for a “confirm” or “deny” of the story. The lead investigator did not have any information regarding this proposed settlement…so we are not sure if it is not entirely a bank leak to Bloomberg or not.

  16. Runedge

    Lots of great comments here. There are so many pieces to this puzzle. NJ Supreme Court has demanded the large servicers come before them this month to explain why foreclosures should not be stopped. Let’s just assume a deal is hammered out among the AG’s, what happens to this example with the NJ Supreme Court or other judicial rulings? To hammer out a deal with all parties seems almost impossible but I must admit my legal background is nil.

    1. Lyle

      This raises an interesting point in judicial foreclosure states potentially the courts can go for contempt of court, without needing any help. Robo Signing etc. are clearly contempt of court. There was perjury, the question is did anyone directly and explicitly encourage it, or was it just you must produce x filing per day? If the latter there was no subornation of perjury, even if the quotas meant that a person needed to work 48 hours a day to meet the goals.

  17. Francois T

    SUing big banks cost an awful lot of taxpayer money, since those rich assholes have access to the corporate treasury to defend themselves to the hilt.

    Much better and “clean” to settle (“Between gentlemen, you know wattam sayin’?”) while filling up the state coffers with fines money.

    Plus, it pretty much leaves all doors open to “future considerations” for the public servants looking for potential career moves.

    Such a wonderful life!

  18. Steve Roberts

    This doesn’t shock me. Does it really shock you?

    I spoke with a client 3 months ago about this mortgage mess and he had the correct prediction – nothing will come of it. People will talk about how horrible it is but the government at every level has a financial incentive to make sure this gets swept under the rug. The banking industry requires continued massive financial assistance to keep them afloat and the Fed is providing it, does anyone really believe if the government fines them it isn’t just a PR stunt? Nothing of significance will EVER come out of the mortgage mess upon which Yves keeps reporting. In 2013 there will be a congressional investigation and that will be that.

  19. Elliot X

    Off topic, though related to the broader issue of corruption in politics: incoming Senator Mike Lee (R-UT) who ran as a tea party candidate, and said he would change how business is done in Washington, has hired an energy lobbyist as his Chief of Staff.

    He said that he was not “scared off by (hiring a lobbyist)….because they….”share a common vision”….

    http://climateprogress.org/2011/01/03/new-sen-mike-lee-r-ut-defends-hiring-energy-lobbyist-as-chief-of-staff/

    Yeah, I’ll bet they share a common vision.

    Rather than thinking of politicians as individuals, possessing some kind of moral autonomy, wouldn’t it be more accurate to see all of them as front men indistinguishable from the corporations they work for? Aren’t their actions as opposed to their words, *always* in line with whatever corporations they’ve accepted money from?

    If we know which corporations a politician has taken money from then we know what they are going to do, and can disregard their statements.

    And these corporations reward only the most compliant and the most craven, and discard as losers anyone unable or unwilling to play the game. Like a hazing process that eliminates anyone who might have started out with anything resembling moral autonomy, until what you are left with in the end is *groupthink*.

    Because isn’t the difference between the two parties a mirage, maintained by the corporate controlled media, and intended only to distract us? And as long as the people are distracted, corporations can loot the country with total impunity. Isn’t that the idea?

    In in the end, aren’t all politicians the same? Aren’t they all craven liars and criminals, who can always be counted on to do whatever their corporate masters tell them to do?

    1. Tim Goswell

      Elliot X said: “Rather than thinking of politicians as individuals….wouldn’t it be more accurate to see all of them as…front men indistinguishable from corporations..?

      Corporate interests have completely taken over the US government as well as mass propaganda (otherwise known as the media), and it’s an illusion to think otherwise. The working class has been wiped out, and the middle class is next in the line of fire.

      What we now face is completely unregulated, unfettered capitalism, and as Marx understood, this is a revolutionary force that will destroy and consume more and more human lives, until it finally destroys and consumes itself.

  20. DumpTheBankInfoJulian

    OKAY, PEOPLE. I finally heard back from Miller’s office….here is the OFFICIAL story:

    The investigation IS NOT COMPLETE! If when the investigation is concluded, and there proves to be criminal charges, the AG (who is responsible for civil charges) would be turning the information over to the appropriate FEDERAL agencies (the State AG cannot charge a FEDERAL corporation with a crime.) The Federal agency that would be responsible for a CRIMINAL matter would be the U.S. Attorney’s offices.

    So, what this all means is: we need to be calling on our Senators and also the U.S. Attorneys offices to make sure that these FORGED DOCUMENTS THAT ARE CORRUPTING OUR LAND RECORDS are prosecuted….and let me tell you there are HUNDREDS OF DOCUMENTS. I have turned over literally hundreds of forgeries from King County alone in Washington state. So, if they try to downplay the problems, I will have a problem with it.

    I also told Miller’s office that they might want to do a press release due to this information going viral on the blogosphere.

    That is the official story from Miller’s office.

  21. Jasmine

    Thanks for the update, Julian. I hope they take your advice regarding a press release. I received the following response from Miller’s office:

    Thank you for contacting the office of Attorney General Tom Miller about the national “robo-signing” investigation.

    In your e-mail you expressed concerns about news reports that the investigation is civil in nature and that criminal charges would not be filed. First, the news reports are accurate in the sense that the national multi-state investigation is a civil investigation. When states work together they enforce laws they have in common. All states have similar civil consumer fraud laws. However, like any civil investigation, if the investigation uncovers evidence of criminal conduct, that evidence will be referred to appropriate criminal enforcement authorities.

    Again, thank you for contacting our office.

    1. DumpTheBankInfoJulian

      “In a nutshell, the investigation of the state AGs is, in fact, a civil investigation in that the one law the AGs share in common in their ability to enforce is state civil consumer fraud law. While the consumer fraud laws differ a bit, they are sufficiently similar to permit us to work together and you are likely aware that state AGs often work together on civil consumer protection cases.

      Of course, if we discover evidence of criminal conduct in the context of these investigations we will pass it along to appropriate authorities, be they local or federal. Some state AGs do not have the authority to file criminal charges, and we cannot collectively file criminal charges in any event. If there is a single criminal charge for national criminal misconduct, it would have to come from a federal enforcement agency.

      The states are working closely with federal agencies in the context of the mortgage problem, generally, and certainly will not hesitate to pass along evidence of criminal conduct. And, as you say, conduct which constitutes a crime under state law can be addressed locally. In Iowa , that is done by the county attorneys, who have primary jurisdiction to file criminal charges. I do not know the situation in the state of Washington but, of course, that is a matter best addressed with local and state authorities there.”

      Bill Brauch

      William L. Brauch
      Special Assistant Attorney General
      Director-Consumer Protection Division

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