A few weeks ago, when the Justice Department decided not to prosecute Angelo Mozilo, the former chief executive of Countrywide, I wrote a column lamenting the fact that none of the big fish were likely to go to prison for their roles in the financial crisis. Soon after that column ran, I received an e-mail from a man named Richard Engle, who informed me that I was wrong. There was, in fact, someone behind bars for what he’d supposedly done during the subprime bubble. It was his 48-year-old son, Charlie.
On Valentine’s Day, the elder Mr. Engle said, his son had entered a minimum-security prison in Beaver, W.Va., to begin serving a 21-month sentence for mortgage fraud. He then proceeded to tell me the tale of how federal agents nabbed his son — a tale he backed up with reams of documents and records that suggest, if nothing else, that when the federal government is truly motivated, there is no mountain it won’t move to prosecute someone it wants to nail. And it was definitely motivated to nail Charlie Engle.
Mr. Engle’s is a tale worth telling for a number of reasons, not the least of which is its punch line. Was Mr. Engle convicted of running a crooked subprime company? Was he a mortgage broker who trafficked in predatory loans? A Wall Street huckster who sold toxic assets?
No. Charlie Engle wasn’t a seller of bad mortgages. He was a borrower. And the “mortgage fraud” for which he was prosecuted was something that literally millions of Americans did during the subprime bubble. Supposedly, he lied on two liar loans.
Nocera goes on to describe--in sordid details--the extraordinary lengths that government stooges went to in order to prosecute Engle, a reformed drug addict who had turned his life around to become one of the world's best ultra-marathoners.
I really can't do the story justice either in excerpts or in paraphrasing, so you'll really have to read the whole article (trust me, it's worth it). Even the staunchest supporter of government regulation would be disturbed by the Stasi-like tactics employed by the investigators on the case, and how far they went to prosecute an individual while letting the corporations on the other side of the coin get away scot-free.
The approach taken in this case--described by Barry Ritholtz as "Prosecute Guppie; Let the Sharks Roam Free" is exactly the same wrong-headed approach that has led our "War on Drugs" to be such an epic failure. Untold millions of dollars have been wasted trying to criminalize and discourage consumption and small-time criminals, with a comparatively small amount of effort spent tackling organized crime and the drug-pushers who enable and encourage the behavior we are trying to eradicate.
Unfortunately, government doesn't seem to have learned its lesson, either in the War on Drugs or in its application of strategies in other scenarios like the "liar loan" case written about here. Our government is supposed to be of the people, by the people, for the people, but increasingly it is becoming one of the corporation, by the corporation and for the corporation. There's simply no other reasonable explanation for this troubling double standard. Free Charlie Engle.
[New York Times]
No comments:
Post a Comment