The Facebook fraudster and the key to prosecuting the robosigners

Here’s what U.S. Attorney Preet Bharara said in a press release announcing Ceglia’s arrest, after claiming that he doctored, fabricated, and destroyed evidence involved with his initial lawsuit:

“Ceglia’s alleged conduct not only constitutes a massive fraud attempt, but also an attempted corruption of our legal system through the manufacture of false evidence. That is always intolerable.”

And that is where I nearly fell out of my chair.

If you simply removed Ceglia’s name in that quote and replaced it with the name of almost any bank that has serviced a mortgage in the last five years, you would have the most succinct condemnation of the robosigning crisis to come out of the mouth of a federal official.

So if one man’s attempt to defraud another man out of partial ownership of one company (albeit one as big as Facebook) constitutes massive fraud, how would you define the banks’ use of tens of thousands of fraudulent documents to bring foreclosure after foreclosure?

Ginormous? Infinite?

Servicers, through their use of Linda Green and friends , were relying on fraudulent or non-existent documents in foreclosure after foreclosure, at a time when Facebook was still in its college-dorm infancy. The only difference here is Ceglia has been charged, yet we have not seen a single Wall Street banker criminally prosecuted, let alone any financial institutions. But make no mistake, the crimes bare some startling similarities.

You might be wondering how exactly the feds are going after Ceglia. He’s charged with mail fraud and wire fraud. That is how they go after fraudsters when they have no other way to prosecute. And here is the promising thing. In this case the feds have provided Eric Schneiderman the blueprint on how to prosecute the banks.

Do you think the banks and their surrogates transferred their bogus documents using the mail or the Internet? You betcha!

If the feds started looking tomorrow through past foreclosures for cases of mail or wire fraud I think they’d have thousands of examples of mail fraud before they broke for lunch.

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