Tag Archives: Bank Whistleblowers United

Steven Krystofiak Warned the Fed 12 Years Ago

By William K. Black
August 6, 2018     Bloomington, MN

Steven Krystofiak formed the Mortgage Brokers Association for Responsible Lending, a professional association dedicated to fighting mortgage fraud and predation.  On August 1, 2006.  He tried to save our Nation by issuing one of the most prescient warnings about the epidemic of mortgage fraud and predation and the crisis it would so cause.

The context was Congress’ effort to empower and convince the Federal Reserve to take action against what the mortgage lending industry called, behind closed doors, “liar’s” loans.  A liar’s loan is a loan in which the lender does not verify (at least) the borrower’s actual income.  The industry knew that the failure to verify inherently led to endemic fraud.  George Akerlof and Paul Romer’s 1993 article on “Looting” by financial CEOs explicitly cited the failure to verify the borrower’s income as an example of a lending practice that only fraudulent lenders would use on a widespread basis.

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By Bank Whistleblowers United
June 25, 2017

Bank Whistleblowers United (BWU) makes its non-coveted Lemon award to the United Kingdom (UK) for actions harming whistleblowers and the world.  BWU’s three principals are highly experienced financial experts with combined practical and academic experience of over 120 years.  We are each unemployable in finance because we warned internally at are places of work and then externally about grave misconduct by the most senior financial and regulatory leaders that would (and did) produce terrible losses.

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By William K. Black

We could, of course, retire the Bank Whistleblowers United’s Lemons title – for ignoring or trivializing elite fraud – by awarding it permanently to the Department of Justice (DOJ).  The current award is particularly close to our hearts because it involves DOJ ignoring the sworn testimony of one our founders, Richard Bowen.  DOJ did not ignore Bowen’s testimony because it was discredited, but because it was proven accurate – and should have led to the indictment of Citigroup’s top leadership team.

Two recent revelations prompt the timing our Lemon award to DOJ.  First, it is five years since the release of the Financial Crisis Inquiry Commission (FCIC) report, so the criminal referrals that FCIC made were revealed.   Citigroup’s senior managers were the subject of two, separate criminal referrals by FCIC.  One of those two referrals was based on Bowen’s testimony.  (Bowen’s explosive interview by FCIC’s staff was also made public.)   The mainstream press has ignored the referral based on Bowen’s testimony.

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April 3, 2016

Chairman Jason Chaffetz
House Committee on Oversight and Government Reform
2157 Rayburn House Office Building
Washington, DC 20515

Ranking Member Elijah Cummings
House Committee on Oversight and Government Reform
2471 Rayburn House Office Building
Washington, D.C. 20515

Dear Chairman Chaffetz and Ranking Member Cummings:

We, the founding members of Bank Whistleblowers United (BWU), write to express our support for the “Whistleblower Augmented Reward and Nonretaliation (WARN) Act of 2016,” introduced by Ranking Member Cummings and Senator Tammy Baldwin. We are co-signatories of the joint letter of support with the Bill of Rights Defense Committee/Defending Dissent Foundation, the Government Accountability Project, OpenTheGovernment.org, the Project On Government Oversight, and Public Citizen.

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Bill appears on the latest podcast from the Tax Justice Network discussing banking, regulations and the Bank Whistleblowers United 60 day plan.

By William K. Black
March 3, 2016

The Bank Whistleblowers United’s third weekly lemons award is made jointly to the Federal Housing Finance Agency (FHFA) and Fannie Mae (with a dishonorable mention to the federal judiciary).  The award goes for these entities’ indifference and even hostility to whistleblowers.  On September 6, 2008, the FHFA placed Fannie and Freddie into conservatorship in conjunction with the largest public bailout in global history.  Fannie and Freddie failed in an orgy of fraudulent mortgage loans.

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William K. Black
February 15, 2016     Bloomington, MN

The Bank Whistleblowers United announce an early winner of our second Financial Fraud Lemons of the Week award, and it relates to our inaugural winner, the Department of Justice (DOJ) for its lies about the latest humiliating settlement with Morgan Stanley.  If DOJ had actually prosecuted the elite Morgan Stanley bankers that led its mortgage fraud epidemic the new winner of our lemons award could not have said what he did about that settlement with a straight face.

Our second financial fraud lemons of the week award goes to Dr. Ben Carson, candidate for the Republican nomination for President in the latest GOP debate.  The Wall Street Journal’s Kimberly Strassel asked the following questions of Carson and received this wondrous response.

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