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Wells Fargo admits deception in $1.2 billion U.S. mortgage accord

BY JONATHAN STEMPEL

Wells Fargo & Co (WFC.N) admitted to deceiving the U.S. government into insuring thousands of risky mortgages, as it formally reached a record $1.2 billion settlement of a U.S. Department of Justice lawsuit.

The settlement with Wells Fargo, the largest U.S. mortgage lender and third-largest U.S. bank by assets, was filed on Friday in Manhattan federal court. It also resolves claims against Kurt Lofrano, a former Wells Fargo vice president.

According to the settlement, Wells Fargo “admits, acknowledges, and accepts responsibility” for having from 2001 to 2008 falsely certified that many of its home loans qualified for Federal Housing Administration insurance.

The San Francisco-based lender also admitted to having from 2002 to 2010 failed to file timely reports on several thousand loans that had material defects or were badly underwritten, a process that Lofrano was responsible for supervising.

According to the Justice Department, the shortfalls led to substantial losses for taxpayers when the FHA was forced to pay insurance claims as defective loans soured.

Several lenders, including Bank of America Corp (BAC.N), Citigroup Inc (C.N), Deutsche Bank AG (DBKGn.DE) and JPMorgan Chase & Co (JPM.N), previously settled similar federal lawsuits.

But Wells Fargo held out, and its payment is the largest in FHA history over loan origination violations.

Friday’s settlement is a reproach for “years of reckless underwriting” at Wells Fargo, U.S. Attorney Preet Bharara in Manhattan said in a statement.

“While Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust,” Bharara added.

The accord also resolved a probe by federal prosecutors in California of alleged false loan certifications by American Mortgage Network LLC, which Wells Fargo bought in 2009.

No one has been criminally charged in the probes, and the Justice Department reserved the right to pursue criminal charges if it wishes, according to the settlement.

Franklin Codel, president of Wells Fargo Home Lending, in a statement said the settlement “allows us to put the legal process behind us, and to focus our resources and energy on what we do best — serving the needs of the nation’s homeowners.”

Lewis Liman, a lawyer for Lofrano, did not immediately respond to requests for comment.

Wells Fargo on Feb. 3 said the settlement would reduce its previously reported 2015 profit by $134 million, to account for extra legal expenses.

The case is U.S. v. Wells Fargo Bank NA, U.S. District Court, Southern District of New York, No. 12-07527.

(Reporting by Jonathan Stempel and Nate Raymond in New York; Editing by Dan Grebler)

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Federal prosecutor reviews possible use of RICO law for Altoona-Johnstown

By Peter Smith / Pittsburgh Post-Gazette

U.S. Attorney David Hickton said his office is looking into whether a federal civil law on organized crime can be applied to the Roman Catholic Diocese of Altoona-Johnstown in the wake of a state grand jury report that said it had a history of clergy sexual abuse and coverup.

The report found that much of the abuse by diocesan priests dated back several decades, and neither the abuse nor any alleged coverup could be prosecuted under the statute of limitations.

But federal laws allow U.S. prosecutors to bring a civil case against an organization and seek an injunction or a consent decree to shape its future behavior, and such cases do not have a statute of limitations, he said.

Mr. Hickton said his office is looking into the case because it prosecuted one Altoona-Johnstown priest, Joseph Maurizio, who last month was sentenced to 17 years in federal prison for sexually abusing boys at a Honduras orphanage between 2004 and 2009.

U.S. Attorney David Hickton said his office is looking into whether a federal civil law on organized crime can be applied to the Roman Catholic Diocese of Altoona-Johnstown in the wake of a state grand jury report that said it had a history of clergy sexual abuse and coverup.

The report found that much of the abuse by diocesan priests dated back several decades, and neither the abuse nor any alleged coverup could be prosecuted under the statute of limitations.

But federal laws allow U.S. prosecutors to bring a civil case against an organization and seek an injunction or a consent decree to shape its future behavior, and such cases do not have a statute of limitations, he said.

Mr. Hickton said his office is looking into the case because it prosecuted one Altoona-Johnstown priest, Joseph Maurizio, who last month was sentenced to 17 years in federal prison for sexually abusing boys at a Honduras orphanage between 2004 and 2009.

Sourced From – http://www.post-gazette.com/news/state/2016/04/02/Federal-prosecutor-reviews-possible-use-of-RICO-law-for-Altoona-Johnstown/stories/201604020025

Blog, Criminal, International, Legal News, Organized Crime

Anti-mafia campaigner in Sicily arrested on mafia-charges

An anti-mafia campaigner once hailed as a hero for blowing the whistle on organised crime has been arrested in Sicily on mafia-related charges.

Cement supplier Vincenzo Artale, 64, had publicly denounced efforts by local mobsters to extract protection money and had even helped founded an anti-mafia association a decade ago in Alcamo, the town between Palermo and Trapani where he had a small business.

But in the decade that followed, prosecutors allege Artale began using his anti-mafia façade as a cover for keeping shady local deals quiet, while doing business with some of Sicily’s biggest mafia bosses on the side.

“Yet again wiretappings have revealed that pretending to be anti-mafia is the perfect shield to mask businesses operating in the shadow of the mafia,” Teresa Principato, one of the prosecutors working on the case, told La Repubblica.

In 2006, Artale was lauded for his courage after he reported local Mafiosi who he said had tried to extort protection money from him. He was compensated  €250,000 from a state-run victim’s solidarity fund and founded a local anti-racket association.

But not long afterwards, prosecutors say Artale began working for a local mobster thought to be one of the key associates of the fugitive Cosa Nostra leader who is Italy’s most wanted man: Mattia Messina Denaro.

According to Italian reports, the gangsters struck a deal with Artale – he would shield them from exposure and in return they would force local construction companies to buy his cement.

His cement business boomed.  But Artale’s sudden wealth triggered suspicion among the townsfolk and soon his anti-mafia double agent game was up. Local builders joined forces to denounce that they were being intimidated to buy his cement, triggering the two-year-long investigation that led to his arrest Wednesday.

He is the latest of several high-profile Sicilian businessmen caught privately working with the mafia while publicly decrying organised crime.

Last year, the head of the Palermo chamber of commerce Roberto Helg, who had publicly denounced the mafia’s extortion practices, was secretly filmed taking a €100,000 bribe in exchange for a pastry shop’s retail space in the airport.

Sourced From  – http://www.telegraph.co.uk/news/2016/03/31/anti-mafia-campaigner-in-sicily-arrested-on-mafia-charges/

Blog, Criminal, International, Legal News, Military Laws, Organized Crime

The Mafia Runs Guns for ISIS in Europe

The mobsters have the weapons, and they’re making a killing selling them off to Islamic radicals.

CASTEL VOLTURNO, Italy — By the time Aziz Ehsan, a 46-year-old Iraqi, was arrested near Naples on Tuesday, local anti-mafia police had already been trailing him for days to determine just why he was in the heartland of the Camorra crime syndicate’s territory. He was well known by both the French and Belgian secret services, which list him as a suspected ISIS contact. The Neapolitan cops were also aware of an international arrest warrant for him in Switzerland, where he was wanted in connection with a variety of offenses, including forgery, assault, and possession of illegal weapons.

He was apparently just the type of person Italian authorities thought might provide a valuable clue as they work to piece together the details of the complex relationshipbetween Jihadist fighters and Italy’s various mobs.

But when the attacks took place in Brussels, the authorities decided it was time to move in and get him. He was arrested as he slept in a car with Italian license plates registered to a deceased man on Tuesday and is awaiting extradition to Switzerland, France, or Belgium.

He claimed that he was in the area to scout out luxury hotels for rich Iraqi tourists, but the police didn’t buy it; he appeared to have been living in the car for days. They also pointed to an absence of notebooks, a laptop, or tablet—items you’d think to bring on a research trip. His no-frills, no contract “burner” cellphone, like the kind favored by Western jihadis, was another sign that Ehsan wasn’t in the region to see which five-star hotels offered the best glass of Limoncello.

“We executed a European arrest warrant near Naples and arrested an Iraqi citizen known to the Belgian and French secret service,” Italy’s interior minister Angelino Alfano declared after his arrest. “He was in contact with terrorists.”

Ehsan’s presence in Italy very likely posed no imminent threat to anyone in this country, but it may be extremely significant in Europe’s losing battle against ISIS-motivated terrorism. Authorities now want to know if Ehsan was here on business, especially if he was working with the Camorra to secure false documents or illegal arms—both big moneymakers for the Neapolitan clans.

Since the Charlie Hebdo attacks in Paris in January 2015, Italian anti-mafia and anti-terrorism officials have been unraveling long-standing connections between Jihadi fighters and the Camorra in Naples. They have also uncovered ties to the Sicilian Cosa Nostra Mafia and the Calabrese ‘Ndrangheta gang, tracing weapons being trafficked in from the former Yugoslavia and several African nations which allegedly arrive easily in Neapolitan ports.

Italian anti-mafia police have made three major arrests in the last 12 months, during which they have confiscated major weapons arsenals that included Kalashnikov rifles, submachine guns, body armor, and hundreds of rounds of ammunition that were ready to be sold to terrorist connections. They even found a price list for a wide variety of weapons available for prices ranging from €250 to €3,000 that was printed in Arabic, French, and Italian.

“Naples has been, for many years, a central logistics base for the Middle East. The Camorra is also active in the world of Jihadist terrorism that passes through Naples,” Franco Roberti, a prominent anti-mafia prosecutor, told The Daily Beast before the Brussels attacks. “Naples lends itself to this type of activity. In the past there have been contacts between Jihadi militants and the Camorra clans.”

He says that Italy’s mafia-fighting forces have “thwarted plots and synergies” between the terrorists and the mobsters. What’s not known, of course, is how many plots they’ve missed.

It is certainly a well-known fact that the Camorra runs a highly successful enterprise in the lawless Neapolitan hinterland running drugs, illegal arms and forged documents that make it especially easy for anyone entering Europe illegally to pass through even the tightest borders. It is just as well-known that the main client base has never been strictly Italian.

“We have evidence that groups of the Camorra are implicated in an exchange of weapons for drugs with terrorist groups,” Pierluigi Vigna, Italy’s national anti-mafia prosecutor, said before he passed away in 2012.

Vigna’s words were quoted in a variety of Wikileaks cables that imply that the United States government has been well aware of the terrorist-mafia connection for some time. “Criminal interaction between Italian organized crime and Islamic extremist groups provides potential terrorists with access to funding and logistical support from criminal organizations with established smuggling routes and an entrenched presence in the United States,” according to one cable on Italy penned by the FBI.

Investigators say logistics help in moving Jihadi fighters through Europe is one of the hardest rackets to crack. Last summer, Salah Abdeslam, who, until last week, was the most wanted man in Europe for his role in the deadly terrorist attacks in Paris, traveled freely through Italy with the help of a network of what could be referred to as mafia-sponsored terrorism travel agents.

Authorities in Italy say he boarded a ferry in Bari headed for Greece last August, and that he used a pre-paid Italian debit card until the Paris attacks. Authorities say he used his real name tied to fake Italian documents in both instances.

The idea of Europe’s most wanted man running free is concerning enough. But what is at least as worrying is that the weapons being trafficked into Italy will end up being used in European capitals. Michele del Prete, an Italian counter-terrorism official who has been focusing on the links between organized crime and violent jihadists, warns that the two forces of evil have found a comfortable partnership. “It is established and proven that the lawless climate in Naples has often created favorable conditions for logistical support, exchange of weapons, and false documents,” he said. “There are specialized groups we have tracked in various municipalities and prefectures that we know are facilitating terrorism.”

Investigator Roberti takes it a step further. “Campania, especially the province of Caserta and Castel Volturno, is one of the main gateways into Europe for those who want to become a terrorist,” he said. “It has been demonstrated by numerous investigations. On this now, there are no doubts.”

Read Full Article – http://www.thedailybeast.com/articles/2016/03/24/inside-the-mafia-isis-connection.html

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What today’s Supreme Court decision means for the future of legal weed

By Christopher Ingraham March 21 at 1:50 PM

The Supreme Court’s decision today to toss out a lawsuit that could have brought Colorado’s legal marijuana boom to a screeching halt hasn’t deterred opponents of the national legalization effort.

Already, the plaintiffs and their supporters are looking to regroup. “The Court’s decision does not bar additional challenges to Colorado’s scheme in federal district court,” said Nebraska Attorney General Doug Peterson in a statement.

Oklahoma and Nebraska asked the Supreme Court to hear a challenge to Colorado’s marijuana legalization framework, saying that the state’s legalization regime was causing marijuana to flow across the borders into their own states, creating law enforcement headaches.

But by a 6-2 majority, the Supreme Court declined to hear the case, without comment.

[Supreme Court turns down case that challenges Colorado marijuana law]

In a statement, Peterson’s office said it would work with Oklahoma and other states “to determine the best next steps toward vindicating the rule of law.”

Other opponents are remaining optimistic, as well. “It’s obviously a disappointment,” said Kevin Sabet of Smart Approaches to Marijuana in an email. “But we think legalization will be defeated on its own policy merits,” he added.

They’re facing an increasingly steep uphill battle.

In the lawsuit, the plaintiffs argued that since marijuana is illegal under the federal Controlled Substances Act (CSA), it can’t be regulated at the state level. But numerous legal experts have pointed out that assumption is incorrect.

“Congress has no power to compel states to prohibit the cultivation, possession and transfer of marijuana,” according to Randy Barnett, an attorney who litigated a Supreme Court case exploring the limits of the CSA. “In the absence of such state prohibition, all such activities are completely legal under state law, notwithstanding that they are illegal under federal law,” he wrote last year.

In short, Congress can say that marijuana is illegal at the federal level. But if a state doesn’t want to enforce that prohibition itself, it doesn’t have to do so. And if it wants to go one step further and set up a market to regulate the trade in the drug, it’s free to do that as well.

“This is the result that most of us were expecting,” legal professor Sam Kamin, who was part of the task force implementing Colorado’s marijuana laws, said in an email. “This never seemed like the right case to test the power of the states to tax and regulate marijuana (everyone seems to agree that they have the right to legalize marijuana).”

The U.S. Justice Department filed a brief last December urging the Supreme Court to throw the lawsuit out. “With the federal government uninterested in bringing such a suit at the moment, this seems to take things out of the courts and into the political process for the near term,” Kamen said.

Legalization advocates say that while the decision likely won’t have any big practical effects in the near-term, it does send a signal to other states mulling their own marijuana policy in the coming years. “The Supreme Court’s rejection of this misguided effort to undo cautious and effective state-level regulation of marijuana is excellent news for the many other states looking to adopt similar reforms in 2016 and beyond,” said Tamar Todd, director of the office of legal affairs at the Drug Policy Alliance, in a statement.

Observers on both sides of the issue point out that the court’s majority did not issue any explanation of their dismissal, which is standard practice in cases like this. The justices may have objected to the lawsuit on its merits, or they may have simply felt that it wasn’t proper for them to take up the case at this time, preferring instead to let the state-level legalization experiments play out.

“Of course, everything may change with a new administration in 2017,” law professor Sam Kamin said in an email. “But with marijuana on the ballot in another big handful of states this fall, the genie may be out of the bottle by the time the next president is sworn into office.”

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Full Article Sourced From – https://www.washingtonpost.com/news/wonk/wp/2016/03/21/what-todays-supreme-court-decision-means-for-the-future-of-legal-weed/