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Theft on a Grand Scale

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A Wall Street Journal report out this afternoon relates:

The Federal Deposit Insurance Corp. sued three former executives of the failed Washington Mutual Bank, along with two of their wives, in a lawsuit filed on Wednesday.

The FDIC is seeking $900 million in damages for alleged gross negligence and other failures by the former executives in the run up to WaMu's collapse in September 2008, the largest-ever U.S. banking failure.

Gross negligence my foot.  The question is: why isn't this a criminal case?  Perhaps it will be in time.  On the other hand, the Holder Justice Department doesn't seem to be cooking with a lot of gas; if my most prominent recent case had ended with 284 not guilty verdicts out of 285 counts, I too might be mumbling instead of acting.

I did a number of white collar cases in my days in the USAO, and the defense was always that it was a poor, but not crooked, business decision, combined with bad luck and "sloppy bookkeeping."  I was always skeptical then, and I confess I remain skeptical now, that people manage to enrich themselves by hundreds of millions of dollars by being "sloppy."

2 Comments

My favorite from the defense:

Your Honor: My client was trying to make everyone whole...he just ran out of time!

And wasn't it odd that they always seemed to run out of time sitting in their $4,000,000 oceanside mansion in Aruba.

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