Foreclosure Watch: DOJ Decision Not to Prosecute Goldman Sachs Draws Criticism

The decision by prosecutors with the U.S. Department of Justice’s not to criminally prosecute Goldman Sachs for its deceit of investors or its activities in the subprime mortgage market has roiled more than a few people. balance.jpg

Our Miami foreclosure defense attorneys can’t say we’re necessarily surprised, but it’s infuriating given the fact that a 2011 report by the Senate’s Permanent Subcommittee on Investigations indicated that the economic crisis we find ourselves in was largely a result of Goldman Sachs’ shady practices.

Particularly vocal about the Justice Department’s lack of action is Matt Taibbi, Contributing Editor for Rolling Stone Magazine. An article he published just after the decision blasts both Goldman executives, as well as U.S. Attorney General Eric Holder and his staff for “playing softball” with the firm when it’s clear crimes on a massive scale were committed against the American people – many of whom have lost their homes to foreclosure or are on the brink.

The Justice Department has said there is not enough evidence at this time to prove any criminal misconduct. But as Taibbi points out, the evidence is vast, and the decision not to press forward with even a single charge against even one executive indicates the decision was driven by politics rather than justice.

Just one example of the fraud perpetuated by the corporate leaders was outlined in the so-called Abacas lawsuit, in which the Securities and Exchange Commission had alleged that the company didn’t inform investors of the role played by a hedge fund in betting against the securities.

Then there was the now-infamous “Hudson Transaction,” involving a collateralized debt obligation (or CDO) that involved some $2 billion in subprime mortgage-backed securities. While Goldman was selecting assets in the deal, it was also the only investor to purchase credit protection against it as well – a clear conflict of interest.

Taibbi points slams the Justice Department by saying the only cases they will move forward in prosecuting are those that are an absolute “slam-dunk” – where the case essentially shows up gift-wrapped – confession and all – at their door step.

But of course the corporate executives aren’t going to admit wrongdoing. Still, it doesn’t make their actions any less wrong – or the lack of accountability any less egregious. There is in fact ample evidence that a number of crimes were committed, including: perjury, tax evasion, theft and fraud. The only difference between these actions and those committed by lower-tier offenders is that the paper trail is millions of miles long and the offenders are billionaires.

Although the SEC has filed a civil complaint against Goldman, the lack of any criminal prosecution sends a clear message to these executives and their companies that they can perpetuate any greedy crime they want – so long as they hire enough lawyers to cover their tails.

And that’s essentially what’s happened in a number of cases involving these corporations. They act first and then hire an army of attorneys to make it appear legal. Given the vastly negative impact of those actions not only on homeowners but on our entire economy, Taibbi posits that the Justice Department should approach the criminal prosecution with that same dedication and ferocity.

If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.

Additional Resources:
Matt Tabbi: DOJ ‘playing softball’ with Wall Street firms, By Eric W. Dolan, The Raw Story

More Blog Entries:
Report: Bank Foreclosure Sanctions Curbed by Politics, Aug. 10, 2012, Miami Foreclosure Lawyer Blog