Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Former Bear Stearns managers to face criminal charges

June 16, 2008; Page A1

Federal prosecutors, capping a yearlong investigation, are preparing to file criminal charges against managers of two Bear Stearns Cos. hedge funds whose collapse helped mark the start of the credit crisis.

The U.S. Attorney's office in Brooklyn is slated to complete interviews of witnesses and other key people in the case this week, and has indicated to lawyers with interest in the case that indictments could be imminent, according to people familiar with the matter.


The former Bear Stearns managers, Ralph Cioffi and Matthew Tannin, managed two high-profile bond portfolios for the securities firm's asset-management unit. They could be charged with securities fraud within the next week, says one of the people familiar with the matter, though evidence could emerge that would change that.


At issue is whether the managers intentionally misled investors by presenting a rosy picture of the funds at a time when they were privately communicating with colleagues about their worries over how the investment vehicles would ride out weakness in the mortgage market. Any indictments would be the first criminal charges against Wall Street executives arising from the credit crisis that swept the financial world last year.


A spokesman for the U.S. Attorney for New York's Eastern District declined to comment, as did a lawyer for Mr. Tannin, 46 years old. A lawyer for Mr. Cioffi, 52, didn't return a call for comment. During the investigation, Mr. Cioffi has told people that he and Mr. Tannin were grappling with the fast-changing dynamics in mortgage markets just as the rest of the financial world was, and didn't mislead anyone.


There has been no indication that broader charges are being contemplated against Bear Stearns, now part of J.P. Morgan Chase & Co., or its executives. But any indictments over the two hedge funds could set a chilling precedent for other companies and executives now under investigation for alleged criminal missteps related to the mortgage-market meltdown.


Bear Stearns Hedge Fund Managers
Feds poised to charge ex-Bear managers

Managers of Failed Bear Hedge Funds May Face Criminal Indictments (And Why Not Bear?)  


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Ex-Fund Managers at Bear Stearns Face Indictment

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Day to Day, June 18, 2008 · A New York City grand jury is expected to return sealed indictments Wednesday against two former Bear Stearns hedge fund managers in connection with the mortgage crisis, officials close to the investigation told NPR.

Ralph Cioffi and Matthew Tannin are expected to be charged with securities fraud in indictments that are scheduled to be unsealed Thursday. They are the highest level Wall Street executives to be charged in connection with the mortgage crisis so far.

As first reported by NPR, prosecutors allege the men told investors that two of their funds were in good shape, while privately telling colleagues they were worried about the funds' prospects.

The funds had a high level of exposure to bonds backed by subprime mortgages and both eventually collapsed. Investors lost about $1.6 billion.

The collapse of the hedge funds in June 2007 — coupled with questions about Bear Stearns management and oversight — lead to a run on the firm, which was eventually rescued by J.P. Morgan Chase.The firm underwent a severe liquidity crisis and was absorbed into JPMC at firesale prices. It also led investors to question how big firms were valuing their mortgage-backed securities.

The U.S. Attorney's office in New York declined to comment on the case, as did the FBI and defense attorneys for Cioffi and Tannin. Cioffi and Tannin are expected to either surrender to the FBI or be arrested Thursday.

Zoinks !!!!  Bear funds loaded w/ subprime imploded due to over confidence in BS and other IB's mortgage servicing fraud abilities.  Secure in this insider knowledge they placed highly leveraged rigged bets that ABX would decline but ABX made an unscheduled recovery and margin calls began to fly.  Tough luck investors! .............err......NOT SO FAST guys!  Let's just hope prosecutors are sharp enough to grasp the big picture.
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MSNBC News at 8:05 AM Central time:

Two Bear Stearns employees surrender to face criminal charges in NY

By TOM HAYS, Associated Press Writer
25 minutes ago

NEW YORK - Two former Bear Stearns managers have surrendered to face criminal charges linked to the collapse of a hedge fund that bet heavily into subprime mortgages before the market collapsed, federal authorities said Thursday.
Authorities in Brooklyn are expected to give details later Thursday on the case against Ralph Cioffi and Matthew Tanin, who would become the first executives to be charged criminally in the wake of the subprime market debacle.

A law enforcement official told The Associated Press on Wednesday that an indictment naming the men was the result of a yearlong federal securities fraud investigation.

The former executives are suspected of misleading investors about the risky subprime mortgage market, the official said, speaking on condition of anonymity because the outcome of the investigation is pending.

Attorneys for Tannin and Cioffi declined comment on Thursday and the U.S. attorney's office did not return a call for comment.

The fallout from defaults on U.S. mortgages has rattled the global economy and the American housing market.

Subprime mortgages, those issued to people with shaky credit, were repackaged as securities and sold across the globe.

The implosion of the hedge funds foreshadowed Bear Stearns' own demise, with the Federal Reserve having to intervene earlier this year to bail out the beleaguered bank. Their collapse revealed how much damage had been done to the companies that bought, repackaged and sold the loans.

Despite positive assessments by Cioffi and Tannin, the Bear Stearns hedge funds failed in June 2007. The funds had more than $20 billion in assets before crashing.

Cioffi, 52, and Tannin, 46, already have been named in lawsuits brought last year by hedge fund investors, including Barclays Bank PLC, who allege they were purposely misled.

Barclays accused Bear Stearns of knowing for months that certain assets in the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund were worth "far less" than their stated values.

The bank alleged Bear Stearns managers "hatched a plan to make more money for themselves and further to use the Enhanced Fund as a repository for risky, poor-quality investments."

The complaint said Bear Stearns told Barclays that the enhanced fund was up almost 6 percent through June 2007 — when "in reality, the portfolio's asset values were plummeting."

Last month, Bear Stearns shareholders approved JPMorgan Chase & Co.'s $2.2 billion buyout at about $10 a share. Back in January 2007, before mortgage defaults began clobbering banks and draining demand from the debt markets, Bear Stearns had traded at $171 a share."

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I intend to further contact the authorities regarding arch mortgage fraud criminal Greg Fedler of EMC with my well documented examples of his and EMC's criminal acts.


Respectfully submitted by

Ed Cage

1804 Cross Bend

Plano Texas 75023

(972) 596-4363


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4 justice now


FBI agents arrested two former Bear Stearns hedge fund managers at their homes yesterday, the first Wall Street executives to be formally charged by the US Government in relation to the credit crunch.

Within hours of arresting Ralph Cioffi and Matthew Tannin, the Justice Department announced that it had charged more than 400 people, including 50 in the previous two days, in a three-month sting operation relating to cases of mortgage fraud that have collectively cost the victims an estimated $1 billion (£507 million).

Mr Cioffi and Mr Tannin were led in handcuffs from their homes respectively in Tenafly, New Jersey, and Manhattan, processed in the FBI's New York office and taken across the East River to a Brooklyn federal court.

Each faces nine counts of conspiracy, securities fraud and wire fraud for allegedly misleading investors over the true health of two Bear Stearns hedge funds they managed. The funds collapsed last summer under the weight of loss-making sub-prime mortgage investments, losing about $1.6 billion of their investors' money.
The FBI uses some interesting logic, I must say:
Defrauded Investors = Victims
Defrauded Homeowners = Dead beats or over extended borrowers
It's just the tip of a extremely large iceberg that's melting rapidly.



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