I'm afraid that this is the motto on the door of our Justice department, just as it's been for a long time. During the height of the war on drugs, it was always easier to get the street corner seller than the king pin who was running the show. From this article In Prison for Taking a Liar Loan in the New York Times, it seems this is the pattern for the largest most extensive conspiracy ever, the real estate balloon of 2000-2008.
There have been commodity bubbles throughout history, from Tulip Mania in the Netherlands in the 17th century to the Dot Com bubble only a decade ago. But never was the commodity the focal point of community, of family life, the house of the people who were the "investors." When these bubbles collapsed the collateral damage, while it may have extended to the larger economy, was most directly felt by those who chose to participate.
The housing bubble was different. Investors, by and large, were not in it to get rich quick, although that could have been the motivation for some. They saw the opportunity to have a dream house, and there were plenty of facilitators to make it seem a deal not to be missed.
Here's a partial list: Those wall street "masters of the universe" who created the secularized aggregations of mortgages, the Federal reserve, from chairman Greenspan to N.Y. head Tim Geithner, who simply looked the other way. Then there were the banks and mortgage lenders, their sales people, mortgage brokers, Security rating agencies, right down to real estate agents who knew darn well that those people taking out those mortgages could never continue to pay for them.
But who is our Justice department prosecuting? From the article by reporter Joe Nocera:
A few weeks ago, when the Justice Department decided not to prosecute Angelo Mozilo, the former chief executive of Countrywide, I wrote a column lamenting the fact that none of the big fish were likely to go to prison for their roles in the financial crisis.
-snip-
Mr. Mozilo’s company made billions in profit, some of it on liar loans that he acknowledged at the time were likely to be fraudulent and which did untold damage to the economy. And he personally was paid hundreds of millions of dollars. Though he agreed last year to a $67.5 million fine to settle fraud charges brought by the Securities and Exchange Commission, it was a small fraction of what he earned. Otherwise, he walked.
No, it's not one of the key figures in orchestrating this criminal conspiracy who will be prosecuted. But, one of his customers, at the very bottom of the chain of conspirators, was indicted, tried and convicted.
No. Charlie Engle wasn't a seller of bad mortgages. He was a borrower. And the “mortgage fraud” for which he was prosecuted was something that literally millions of Americans did during the subprime bubble. Supposedly, he lied on two liar loans.
Read the article for more details of how the U.S. Attorney went to extraordinary efforts to reel in this man, building a case that must have taken a great diversion of public funds to pursue. But, not as much as it would have cost to have gone against Mozillo, who would have had the best legal talent and for the trial and for appeals.
Engle doesn't have the money for lawyers or P.R. So he will just serve his time. The message to those moguls who have this opportunity in the future is if you are going to subvert the American economic-justice system for self gain--you better do it right and come away with billions. And if you do, even when it's discovered, you will be immune from the legal consequences.
Too big to fail also means to big to prosecute.