America's Debt Complex: FBI Finally Cracks Down on Mortgage Crime Wave

By Danny Schechter, AlterNet. Posted June 24, 2008.

Stephen Colbert has a popular feature in his Comedy Channel rants of the day. He calls it "The Word" (rappers used to just say "word"), and he explains how language can have different meanings. Consider the word "predator."

My online dictionary offers two meanings, one for the animal world and one for ours.

predator: noun -- an animal that naturally preys on others. Wolves are major predators of rodents. figurative -- a rapacious, exploitative person or group. Her wealth made her vulnerable to predators. (Note: poverty also can make one vulnerable.)

In popular usage there are two others. One references companies and scammers who engage in predatory lending. They are behind the subprime loans that took advantage of so many people resulting in the collapse of our markets and a threat to the global economy. Despite its pervasive presence, this type of predatory behavior does not find its way into the news much because of its connotation of criminality.

The other use is associated with men who use the internet to lure young people into sex. No one really knows how pervasive the practice is -- most of the figures have been hyped and exaggerated. Yet, because of its salaciousness, it has been the subject of a popular prime time TV segment, NBC's "To Catch a Predator," which has made parents fearful that legions of perverts are lurking online to solicit their kids. Yet, when the Columbia Journalism Review analyzed the show, it found it to be exploitative, factually inaccurate and a disservice. CJR showed how the show inflated a problem for the sake of entertainment, as opposed to reporting one as news.

This is an example of how TV news organizations sensationalize to generate ratings while ignoring a far more pervasive reality by the same name confronting many more people who are losing their homes and their hope.

Now that the Justice Department and the FBI are indicting and rounding up this type of predator, the criminal nature of this problem has finally been validated. Last week, two former hedge fund managers at Bear Stearns were busted for defrauding investors to the tune of a billion dollars. Another 400 scammers were arrested in "Operation Malicious Mortgage," an FBI-run investigation staffed by 180 agents serving 40 task forces working more than 1,200 cases.

So far, no TV network has announced a special series on these corporate predators, but the New York Times business section has become a subcrime scene with pictures of the perps. There have been reports about an executive for a Swiss bank that encouraged Americans to violate the law by moving money illicitly into offshore accounts, as well as a profile of another hedge fund crook, now on the run, chased by U.S. marshals as he tries to escape a jail sentence. The Times even published a Wanted poster.

The investigation of this white-collar crime wave is a bit late since trillions have already been lost. Legal experts say the top dogs may walk because of the difficulties of proving that what they did was a crime.

Historian Carolyn Baker, who follows the economic crisis for her Speaking Truth to Power website, states: "History will prove that the number of people busted for this is only a drop in the bucket compared to the number involved in nationwide blatant fraud and theft which created the largest mortgage meltdown in the history of the world. A few bad apples? Get a clue! The scam was rampant and epidemic."

See more stories tagged with: predatory lending, fbi, mortgage industry, white collar crime, credit and debt complex, debt

Danny Schechter writes a blog for MediaChannel.org. He is the author of Plunder, a forthcoming book on our financial crisis.

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