It seems to me that TFG’s fraud over at least the last 10 years was evident at the time to anyone who cared enough to look. For Pete’s sake, he lied about the size of his property, not just it’s valuation — that seems to be pretty simple for a lender to check. I know for sure that when I ask for a mortgage someone looks at the house. If it is 2000 square feet and I claim it to be 6000, I don’t get the loan. Pretty simple. And that was just one of 200 lies over 10 years.
There must have been a “wink, wink, nod, nod” environment where his lenders wanted to lend to him — for profit, or influence or some other benefit. Aren’t they liable to their stockholders? If the NY AG is right, and they were defrauded out of $250 million, don’t the shareholders have a claim of negligence against those who failed in their due diligence reviews of the financial statements?
If the lenders carried his assets on their books as loan collateral, knowing they were inflated (or even if they could have / should have known) did they falsify their financial statements as well? Are they now liable for fraud of any kind? Any SEC or banking regulation liability?
For sure, Ms. James has the right defendants and they need to be prosecuted in every possible way, both civil and criminal. But his enablers were just as unethical, and possible acted illegally, and they need to be investigated as well. Like Ms. James said, white collar crime is not victimless.