21 January 2012

Corzine, MF Execs and JPM Named in RICO Lawsuit

Privately sponsored RICO lawsuits have a difficult time obtaining the types of information that are required to make a conspiracy case unless they get lucky in the discovery process or find a willing whistleblower. The defendants generally lawyer up and stonewall, using the types of court maneuvers that prove so effective in mortgage fraud cases, theft of customer funds, and mass foreclosures based on forged documents.

The chances of an Obama Administration investigation with teeth seems unlikely. Their Justice Department has strong ties to the big banks and mortgage companies and a very poor record of prosecuting fraud cases.

Of course there is little reason to hope for anything different from any Republican administration. Ron Paul would be honest enough, but it is hard to tell which laws he would choose to enforce and which ones would be considered an intrusion on free markets.

It might be more effective for the public to demand the appointment of a special prosecutor with a proven record of effective investigation of the big banks. Too bad Eliot Spitzer was taken out of the picture in a bank sponsored 'investigation' into his sex life by the Bush Justice Department.

Corzine Sued for RICO Violation by MF Global Customers
By Linda Sandler
January 20, 2012, 6:42 PM EST

Jan. 20 (Bloomberg) -- Jon Corzine, MF Global Holdings Ltd.’s former chief executive officer, was sued under U.S. racketeering law by commodity customers alleging he and other executives “unlawfully” took money from their accounts and failed to segregate their money as the law requires.

The suit alleges that hundreds of millions of dollars were transferred from customers’ accounts to other MF Global units, at a time when the company was short of cash and faced calls for collateral as its risky Eurobond and other investments fell in value.

Named in the suit, JPMorgan Chase & Co., the company’s banker, should have noticed the “depletion” of customer money, and should have investigated, according to the plaintiff. The customers are seeking unspecified restitution and damages.

The suit, filed in federal court in Manhattan today on behalf of Robert Marcin and other MF Global segregated account holders by Grant & Eisenhofer PA of New York, is one of at least 10 against Corzine and other MF Global executives. Plaintiffs including the Virginia Retirement System have been competing to lead a consolidated lawsuit seeking so-called class-action status....

Read the rest here.