Why Are Bitcoiners Going to Jail for Money Laundering While Big Banks Walk?

By Cathy Reisenwitz

BitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, the firm paid a fine of $1.9 billion. Authories made no arrests, and HSBC still turned a $13.5 billion profit that year.

Rolling Stone’s Matt Taibbi detailed the crimes HSBC helped fund, including “tens of thousands of murders” and laundering money for Al Qaeda and Hezbollah. By contrast, Silk Road users have only been shown to have bought and sold drugs. (The six murders-for-hire commissioned by alleged former Silk Road head Ross Ulbricht were never carried out.) In fact, by moving transactions online, Silk Road likely decreased the violence associated with the drug trade.

Again, no individual associate with HSBC paid any money or spent a day in jail. Shrem is currently in custody. Why is there such a disparity? Clearly the size, scope, violence or effect of the crime can’t justify the discrepancy in response. The Justice Department explained it by saying that HSBC is, in essence, Too Big to Jail.

"Had the US authorities decided to press criminal charges," said Assistant Attorney General Lanny Breuer during the announcement of the HSBC settlement. "HSBC would almost certainly have lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilized."

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Top 12 states with healthiest foreclosure markets

Eric McWhinnie, Wall St. Cheat Sheet6:30 a.m. EST February 2, 2014

2013 was a transitional year for residential property in the USA as the housing market recovery gains steam.

Millions of homeowners are still dealing with the side effects of the housing bubble and credit meltdown of yesteryear, but the home foreclosure market is slowly showing signs of progress.

The number of completed foreclosures dropped to 45,000 units in December, representing a 14% decline from 52,000 units a year earlier, according to a new analysis by CoreLogic. However, completed foreclosures averaged only 21,000 per month nationwide between 2000 and 2006. Since the beginning of the financial crisis in September 2008, approximately 4.8 million foreclosures have been completed.

"Clearly, 2013 was a transitional year for residential property in the United States. Higher home prices and lower shadow inventory levels, together with a slowly improving economy, are hopeful signals that we are turning a long-awaited corner," explains Anand Nallathambi, president and chief executive officer of CoreLogic, in a press release. "The housing market should continue to heal in 2014, but we expect progress to remain very slow."

The national foreclosure inventory — which contains homes in some stage of the foreclosure process — plunged 31% year over year to about 837,000 units in December. In fact, foreclosure inventory has declined for 12 consecutive months by at least 20% on a year-over-year basis. Florida, New Jersey, and New York have the highest foreclosure inventory as a percentage of mortgaged homes, but 36 states have an inventory level below the national rate.

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Bill would require refunds of overpaid foreclosure costs in Colorado

By David Migoya
The Denver Post

Lawyers who pass on to homeowners the court costs of filing a foreclosure lawsuit against them would have to prove they incurred the expenses, under a legislative bill — but only if someone asks.

Additionally, foreclosure lawyers would be required under the bill proposed by Rep. Beth McCann, D-Denver, to keep receipts and other proof that the expenses they say a homeowner must pay to end the foreclosure process are real.

The legislation, HB-1130, unanimously passed a House subcommittee Wednesday and will be heard by the entire assembly. If it passes the House, it will move to the Senate for hearings.

"It's really a common-sense bill," said McCann, who has failed several times to bring legislative changes to the state's foreclosure process.

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Several Hedge Funds to Sue Big Banks for Role in Tom Petters Ponzi Scheme

By Albert Samaha Wed., Feb. 5 2014 at 7:00 AM

Six hedge funds are seeking to sue JP Morgan Chase, Bank of America, Wells Fargo, and other banks for their role in a $3.65 billion Ponzi scheme.

The hedge funds claim that they lost a combined $177 million to Tom Petters, the Minnesota-based CEO who was convicted for the fraud and sentenced to 50-years in prison in 2010. The banks, the hedge funds allege, aided and abetted Petters's crimes by allowing him to establish "suspicious accounts." UBS, the CIT Group, and PNC Bank are also among the defendants.

According to the complaint, filed in New York County Supreme Court and first reported on Tuesday by Courthouse News Service, Petters repaid the banks' loans with money from his scheme's victims even after the banks "knew that Petters and his entities, including Polaroid, were insolvent and/or not able to pay their debts."

Petters ran his Ponzi scheme from 1998 to 2008. His investors, including the hedge funds, believed they were funding a wholesale retail business, mainly electronics that Petters Company Inc. supposedly resold to big-box stores like Costco and Sam's Club. But Petters had been faking the product orders.

Federal agents arrested him in September 2008. The following December a jury found him guilty of 20 counts of money laundering, mail fraud, wire fraud, and conspiracy.

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