Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Justice Department Is Weighing Civil Suit Against Angelo Mozilo

dealbook.nytimes.com | November 24, 2014

By Matthew Goldstein

Federal prosecutors are wrestling with whether to file a civil fraud lawsuit against Angelo R. Mozilo, the former chief executive of Countrywide Financial, which was at the center of the subprime mortgage boom and bust, people briefed on the matter say.

This summer, the United States attorney’s office in Los Angeles was said to be close to filing a lawsuit against Mr. Mozilo over his role in Countrywide’s sale of millions of mortgages to home buyers with questionable credit histories. Prosecutors there were planning to move forward with a civil fraud lawsuit nearly three years after it had abandoned a criminal investigation of Countrywide and Mr. Mozilo, the firm’s co-founder.

But Stephanie Yonekura, the acting United States attorney for the Central District of California, which includes Los Angeles, has had lingering questions about the litigation because of arguments raised by lawyers for Mr. Mozilo and other potential defendants, said the people briefed on the matter, who were not authorized to speak publicly about a current investigation.

One argument raised by lawyers for Mr. Mozilo and some of the other defendants is that a civil fraud lawsuit would duplicate the efforts of the Securities and Exchange Commission, which sued Mr. Mozilo and two other former Countrywide executives in 2009. On the eve of the trial in 2010, Mr. Mozilo and the other defendants reached a settlement with the agency that required the mortgage financier to pay $67.5 million in fines and restitution. In settling that securities fraud and insider trading case, Mr. Mozilo and the two other former Countrywide officials, David Sambol and Eric Sieracki, neither admitted nor denied liability.

In criminal law, a person generally cannot be charged with the same crime twice. There is nothing comparable in civil law, but the people briefed on the matter said lawyers for the defendants had claimed it would be unjust for two government agencies to bring two similar civil enforcement actions so many years apart.

David Siegel, Mr. Mozilo’s lawyer, said he would not comment on the investigations, “but we do hope that they will consider all of the circumstances.”

Mr. Mozilo did not return telephone calls to his home in California. But in an interview with Bloomberg News in September, he said he did not understand why the federal government was still pursuing him. “We didn’t do anything wrong,” he said.

Leon W. Weidman, the federal prosecutor who heads the civil division for the United States attorney’s office in Los Angeles and is overseeing the investigation of Mr. Mozilo, did not return telephone calls seeking comment.

Over the last several months, federal prosecutors in Los Angeles have met several times with lawyers for Mr. Mozilo and more than half a dozen other potential defendants from Countrywide to discuss the lawsuit, said the people briefed on the matter. The identities of the other defendants could not be determined.

Still, some defense lawyers left those meetings expecting a lawsuit to have been filed by now, the people briefed on the matter said.

Lawyers for the former Countrywide officials under scrutiny have told prosecutors that their clients have no intention of settling with the government, and a lawsuit is likely to drag on for years, these people said.

And Mr. Mozilo, who will turn 76 in December, has said he has health issues, although that is not believed to be a major consideration for prosecutors.

Now it appears that a decision about suing the onetime mortgage titan will not be made until early next year. A decision to file a lawsuit would ultimately require the approval of the Justice Department in Washington. It could become one of the first orders of business for Loretta E. Lynch, the United States attorney for Brooklyn, if she is confirmed by the Senate as the next United States attorney general.

Daniel C. Richman, a professor of criminal law at Columbia University, said that Mr. Mozilo’s settlement with the S.E.C. should not deter federal prosecutors from pursuing their own civil case if the facts warrant it.

“Settling with the S.E.C. in and of itself doesn’t necessarily guarantee peace from the government at large,” Mr. Richman said. “If Mr. Mozilo had wanted to have other government agencies brought into a global settlement at that time, I think they would have agreed.”

The decision by prosecutors in Los Angeles to close their criminal investigation of Mr. Mozilo — who for many became the public face of Wall Street’s excesses in the mortgage market — helped fuel some of the populist anger over the absence of criminal prosecutions of bankers related to the financial crisis.

But prosecutors in Los Angeles took a fresh look at Mr. Mozilo, weighing whether to use a 25-year-old federal statute, the Financial Institutions Reform, Recovery and Enforcement Act, or Firrea, which permits authorities to file civil actions against individuals for criminal violations.

In a 2010 essay discussing Firrea, Mr. Weidman urged his colleagues to use the civil statute and its lower burden of proof for “cases that have been declined by your criminal division because of insufficient evidence to prove a violation beyond a reasonable doubt.”

Since then, federal prosecutors in Washington and across the country have used the law to extract more than $36 billion in settlement dollars from Wall Street banks that played a part in selling faulty mortgage-backed securities in the run-up to the financial crisis.

Mr. Weidman and his fellow prosecutors in the Los Angeles office had a hand in helping negotiate the Justice Department’s $16.65 billion settlement of a Firrea case against Bank of America, which acquired Countrywide in 2008 and assumed its liabilities.

The news of the possible Firrea lawsuit against Mr. Mozilo was first reported by Bloomberg on the eve of the government’s settlement with Bank of America, which was announced by the Justice Department on Aug. 21.

Until now, the Justice Department has used the potential of filing a lawsuit against Mr. Mozilo as the basis for denying Freedom of Information Act requests seeking information about the decision by Los Angeles prosecutors to drop their criminal investigation into Countrywide and Mr. Mozilo.

In September, Citizens for Responsibility and Ethics in Washington, a public interest organization, voluntarily dismissed a lawsuit it had filed seeking to compel the Justice Department to comply with its FOIA request for all records related to the decision not to file criminal charges. The group dismissed the suit after it received a letter from Mr. Weidman that stated the records sought were of “critical importance” to an “ongoing law enforcement investigation.”

The Justice Department offered a similar rationale on Oct. 2 for denying a FOIA request submitted by The New York Times.

 

Back to November 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:




 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2016 Certified Forensic Loan Auditors ™ All rights reserved