Meet Criminal Ebrahim Shabudin Costs Taxpayers Millions

Securities and Exchange Commission v. Thomas S. Wu, Ebrahim Shabudin, and Thomas T. Yu 

Exec at center of first TARP bank failure gets 8 years in prison

Fraud scheme cost taxpayers more than $300 million

More from Drew Harwell at the Washington Post: In 2009, less than a year after its $300 million taxpayer-funded rescue, the United Commercial Bank burned through the cash to become America’s first bailout-boosted bank to fail during the financial meltdown.

But this week, one of the imploded bank’s former senior executives was sentenced to eight years in prison for covering up its collapsing loans, becoming one of the few high-ranking bankers to face punishment for crisis-era crimes.

Ebrahim Shabudin, a former chief credit officer for the San Francisco-based bank, falsified records to hide major loan losses from auditors and investors in what prosecutors called a “delay-and-pray” scheme, even as the bank sought and pocketed cash from the Troubled Asset Relief Program, or TARP.

The bank, which once managed nearly $11 billion in assets and ran more than 50 branches across the United States, China and Taiwan, became the ninth largest to fail since 2007 even with help from the multitrillion-dollar bailout. Its dramatic failure cost the federal fund that insures Americans’ deposits more than $675 million.

The bailout’s chief watchdog called the years-long investigation into Shabudin “one of the most significant prosecutions” for crimes in the shadow of the financial meltdown. In March, after a six-week trial, a federal jury convicted Shabudin, 66, of seven counts of conspiracy and corporate fraud, making him one of the rare high-level bankers to head to court due to crisis-era crimes.

“Shabudin had every opportunity to do the right thing, but he was motivated instead to preserve the bank’s reputation at all costs, even if it meant committing a crime,” said Christy Goldsmith Romero, the special inspector general for TARP. “He was essentially gambling with taxpayers’ bailout dollars, and it was taxpayers who ultimately lost.”

But his sentencing may do little to quiet criticism that few big fraudsters have been punished in the meltdown’s long aftermath. The watchdog has secured convictions against 200 bank officers and other officials, but most were involved in smaller community banks, not Wall Street titans like those that used taxpayer money to pave over bad bets or dole out big bonuses.

Originally specializing in lending to Chinese Americans, the bank grew aggressively through commercial real-estate loans, becoming the first U.S. financial institution to buy a Chinese bank.

Its high-risk lending nearly doubled the bank’s loan portfolio between 2004 and 2007, to more than $8 billion, and made a rising star of chief executive Thomas Shiu-Kit (“Tommy”) Wu, who in 2006 was named auditing giant Ernst & Young’s financial-services Entrepreneur of the Year.

But as the bank’s river of risky loans began to fail, Shabudin and Wu held off on downgrading loans they knew were falling apart, ordered subordinates to understate the bank’s losses by at least $65 million, and blasted out false information in press releases, earning calls and annual reports.

Federal watchdogs including from the Federal Reserve, the Consumer Financial Protection Bureau and the FBI joined the case, making Shabudin and bank senior vice president Thomas Yu the first senior bank officials charged with fraud at a bailout-boosted financial institution.

Shabudin was the bank’s third officer to be criminally convicted, after Yu and chief financial officer Craig S. On pleaded guilty to conspiracy charges late last year. An outstanding warrant is in place for Wu, the chief executive, who has not yet been apprehended.

[SIGTARP proves that some bankers aren’t too big to jail]

Though credited with helping stabilize the wobbling economy, the bailout is remembered by many for its corporate largesse, including the hundreds of millions of dollars in bonuses paid to the heads of failing banks rescued by taxpayer cash.

Yet many of SIGTARP’s cases have focused on brazen acts of accounting fraud and smaller banks’ misspent millions. In one case, the executive of Mainstreet Bank, a community bank in Missouri, used nearly $400,000 of the bank’s $1 million bailout to buy a waterfront Florida condo.

The first person convicted of stealing bailout funds, Charles Antonucci, pleaded guilty in 2010 to bribes, fraud and embezzlement while serving as president of the Manhattan-based Park Avenue Bank. He was sentenced last month to 30 months in prison, down from a potential maximum of 135 years, because prosecutors said he cooperated with the bank probe.

William K. Black, a former bank regulator and University of Missouri associate professor specializing in white-collar crime, said Shabudin’s role in only the ninth-largest bank failure highlights the failure of regulators to combat larger frauds.

The Justice Department has still “prosecuted no banking leader for leading the three epidemics of fraud that hyper-inflated the bubble, drove the financial crisis, and caused the Great Recession,” referring to appraisal, loan and secondary-market fraud.

“Thousands of elite bankers reported pathetically inadequate” estimates of their bad debts similar to this bank’s, “and they face no investigations, much less prosecutions,” Black said. “The larger bank frauds were all bailed out this time around.”

More than Half of Immigrants on Welfare

Contrary to declaration from the White House:

How do immigrants strengthen the U.S. economy? Below is our top 10 list for ways immigrants help to grow the American economy.

  1. Immigrants start businesses. According to the Small Business Administration, immigrants are 30 percent more likely to start a business in the United States than non-immigrants, and 18 percent of all small business owners in the United States are immigrants.
  2. Immigrant-owned businesses create jobs for American workers. According to the Fiscal Policy Institute, small businesses owned by immigrants employed an estimated 4.7 million people in 2007, and according to the latest estimates, these small businesses generated more than $776 billion annually.
  3. Immigrants are also more likely to create their own jobs. According the U.S. Department of Labor, 7.5 percent of the foreign born are self-employed compared to 6.6 percent among the native-born.
  4. Immigrants develop cutting-edge technologies and companies.  According to the National Venture Capital Association, immigrants have started 25 percent of public U.S. companies that were backed by venture capital investors. This list includes Google, eBay, Yahoo!, Sun Microsystems, and Intel.
  5. Immigrants are our engineers, scientists, and innovators. According to the Census Bureau, despite making up only 16 percent of the resident population holding a bachelor’s degree or higher, immigrants represent 33 percent of engineers, 27 percent of mathematicians, statisticians, and computer scientist, and 24 percent of physical scientists. Additionally, according to the Partnership for a New American Economy, in 2011, foreign-born inventors were credited with contributing to more than 75 percent of patents issued to the top 10 patent-producing universities.
  6. Immigration boosts earnings for American workers. Increased immigration to the United States has increased the earnings of Americans with more than a high school degree. Between 1990 and 2004, increased immigration was correlated with increasing earnings of Americans by 0.7 percent and is expected to contribute to an increase of 1.8 percent over the long-term, according to a study by the University of California at Davis.
  7. Immigrants boost demand for local consumer goods. The Immigration Policy Center estimates that the purchasing power of Latinos and Asians, many of whom are immigrants, alone will reach $1.5 trillion and $775 billion, respectively, by 2015.
  8. Immigration reform legislation like the DREAM Act reduces the deficit.  According to the nonpartisan Congressional Budget Office, under the 2010 House-passed version of the DREAM Act, the federal deficit would be reduced by $2.2 billion over ten years because of increased tax revenues.
  9. Comprehensive immigration reform would create jobs. Comprehensive immigration reform could support and create up to 900,000 new jobs within three years of reform from the increase in consumer spending, according to the Center for American Progress.
  10. Comprehensive immigration reform would increase America’s GDP.The nonpartisan Congressional Budget Office found that even under low investment assumptions, comprehensive immigration reform would increase GDP by between 0.8 percent and 1.3 percent from 2012 to 2016.

Report: More than half of immigrants on welfare

USA Today: More than half of the nation’s immigrants receive some kind of government welfare, a figure that’s far higher than the native-born population’s, according to a report to be released Wednesday.

About 51% of immigrant-led households receive at least one kind of welfare benefit, including Medicaid, food stamps, school lunches and housing assistance, compared to 30% for native-led households, according to the report from the Center for Immigration Studies, a group that advocates for lower levels of immigration.

Those numbers increase for households with children, with 76% of immigrant-led households receiving welfare, compared to 52% for the native-born.

The findings are sure to fuel debate on the presidential campaign trail as Republican candidates focus on changing the nation’s immigration laws, from calls for mass deportations to ending birthright citizenship.

Steven Camarota, director of research at the center and author of the report, said that’s a much-needed conversation to make the country’s immigration system more “selective.”

“This should not be understood as some kind of defect or moral failing on the part of immigrants,” Camarota said about the findings. “Rather, what it represents is a system that allows a lot of less-educated immigrants to settle in the country, who then earn modest wages and are eligible for a very generous welfare system.”

Linda Chavez agrees with Camarota that the country’s welfare system is too large and too costly. But Chavez, a self-professed conservative who worked in President Reagan’s administration, said it’s irresponsible to say immigrants are taking advantage of the country’s welfare system any more than native-born Americans.

Chavez said today’s immigrants, like all other immigrant waves in the country’s history, start off poorer and have lower levels of education, making it unfair to compare their welfare use to the long-established native-born population. She said immigrants have larger households, making it more likely that one person in that household will receive some kind of welfare benefit. And she said many benefits counted in the study are going to U.S.-born children of immigrants, skewing the findings even more.

“When you take all of those issues into account, (the report) is less worrisome,” she said.

Chavez, president of the Becoming American Institute, a conservative group that advocates for higher levels of legal immigration to reduce illegal immigration, said politicians should be careful about using the data. Rather than focus on the fact that immigrants are initially more dependent on welfare than the U.S.-born, she said they should focus on studies that show what happens to the children of those immigrants.

“These kids who get subsidized school lunches today will go on to graduate high school … will go on to college and move up to the middle class of America,” Chavez said. “Every time we have a nativist backlash in our history, we forget that we see immigrants change very rapidly in the second generation.”

The center’s report is based on 2012 data from the Census Bureau’s Survey of Income and Program Participation. It includes immigrants who have become naturalized citizens, legal permanent residents, those on short-term visas and undocumented immigrants.

Camarota said one of the most shocking findings from the report was the high number of native-born Americans also on welfare. About 76% of immigrant households with children are on welfare, but so are 52% of native-born households with children.

“Most people have a sense that if you were to work for $10 an hour, 40 hours a week, you couldn’t be receiving welfare, could you? You couldn’t be living in public housing, could you?” he said. “The answer is yes, you can. That’s one of the most surprising things about this study.”

Other findings in the report:

  • Immigrants are more likely to be working than their native-born neighbors. The report found that 87% of immigrant households had at least one worker, compared to 76% for native households.
  • The majority of immigrants using welfare come from Central America, Mexico and the Caribbean. The use of welfare is lower for immigrants from East Asia (32%), Europe (26%) and South Asia (17%).
  • Immigrants who have been in the U.S. more than 20 years use welfare less often, but their rates remain higher than native-born households.
  • If you need some immigration advice, contact a team of immigration lawyers who will help you out.

 

Truth of the Iran Lobby

All Republicans in the Senate are ‘NO’ votes on the Iran deal and there is an estimated 12 Democrats so far that are staying with a NO vote, the rest of the Democrats have declared they will vote with the White House, when not one Senator has had any access to the side deals.

The White House has declared they don’t need any part of Congress to approve the deal, it is done. Further, the Iran deal is non-binding which is to say Iran does not need to comply with any part of the JPOA.

Meanwhile, you may be interested to know who the Iran Lobby is in Washington DC and the influence they have with legislators and the White House. Simply, money votes.

The text below is the perfect model for how all politics work in Washington DC. Chilling but true.

Meet the Iran Lobby

In the fight over sanctions and the nuclear deal, how did the supposedly all-powerful pro-Israel lobby lose to the slick operatives of the National Iranian American Council?

Russian Connection with Julian Assange, WikiLeaks and OPM?

Pvt. Bradley Manning describes as noted by Gawker in part:

The story begins with Manning’s own disillusionment with U.S. foreign policy and its wars, sparked by his wide-ranging research as an analyst. “I began to become depressed with the situation that we found ourselves increasingly mired in year after year,” he said. He wanted to give the public access to some of the same information he had seen, so they might come to a similar conclusion. Manning said he leaked a massive database of incident reports from Iraq and Afghanistan because he believed they might “spark a domestic debate on the role of the military and our foreign policy in general as it relates to Iraq and Afghanistan.” He hoped people who saw the dramatic video of a 2007 Apache helicopter strike in Iraq he leaked would be outraged by the “delightful bloodlust” of the pilots. The U.S. State Department cables he gave to Wikileaks detailed shady deals and backroom intimidation and were “a prime example of a need for a more open diplomacy.” 

But Manning’s ideas and actions did not develop in a vacuum. In walking us through the genesis of and rationale behind each leak, Manning’s statement emphasizes they were not hit-and-run jobs. Wikileaks plays a pivotal role in this story, and not just as a passive leaking “platform.” As Manning tells it, his relationship with Wikileaks was not unlike the relationship between a traditional journalist and their source. Manning said he was originally drawn to Wikileaks after their release in 2009 of half a million pager messages from 9/11. In January, 2010, Manning joined a chatroom linked on Wikileaks’ official site out of curiosity. He wanted to know how Wikileaks got the pager messages. “I am the type of person who likes to know how things work,” he said in his statement. “And, as an analyst, this means I always want to figure out the truth.”

Over the years I’ve periodically visited that same, now-defunct chatroom to try to figure out how Wikileaks works. Whenever I dropped by it seemed pretty dead, a few Wikileaks fanboys idling during the work day. But in early 2010 Manning found a lively collection of geeks discussing stimulating topics.

Later the official investigation and charges were brought against Bradley Manning. The charge sheet is here describing his full actions.

As noted in this blog yesterday, the Chinese and the Russians are in fact cultivating and applying the stolen data (hacked) and are working against the West.

Enter Julian Assange and the Russians.

Hat tip to John:

Wikileaks is a Front for Russian Intelligence

The part played by Wikileaks in the Edward Snowden saga is an important one. The pivotal role of Julian Assange and other leading members of Wikileaks in getting Snowden from Hawaii to Moscow, from NSA employment to FSB protection, in the late spring of 2013 is a matter of record.

For years there have been questions about just what Wikileaks actually is. I know because I’ve been among those asking. Over two years ago, little more than two weeks after Snowden landed in Moscow, I explained my concerns about Wikileaks based on my background in counterintelligence. Specifically, the role of the Russian anti-Semite weirdo Israel Shamir, a close friend of Assange, in the Wikileaks circle merited attention, and to anyone trained in the right clues, the Assange group gave the impression of having a relationship with Russian intelligence. As I summed up my position in July 2013, based on what we knew so far:

It’s especially important given the fact that Wikileaks is playing a leading role in the Snowden case, to the dismay of some of Ed’s admirers and even members of his family. Not to mention that Snowden, as of this writing, is still in Moscow. One need not be a counterintelligence guru to have serious questions about Shamir and Wikileaks here. It may be a much bigger part of the story than it appears to the naked eye.

Evidence that Wikileaks is not what it seems to be has mounted over the years. Assange’s RT show didn’t help matters, neither did the fact that, despite having claimed to possess secret Russian intelligence files, Wikileaks has never exposed anything sensitive, as they have done with the purloined files of many other countries. To say nothing of Assange & Co. taking unmistakably pro-Russian positions on a host of controversial issues. Questions logically followed.

Now answers are appearing. It’s long been known that Wikileaks, by their own admission, counseled Ed Snowden in June 2013 to leave Hong Kong and head to Moscow. Contrary to the countless lies propagated by Snowden Operation activists, Snowden’s arrival in Russia was his choice; it had nothing to do with  canceled passports in Washington, DC.

An important gap has been filled this week by Julian Assange, who admitted that Snowden going to Moscow was his idea. Ed wanted to head to Latin America, Julian asserted, especially Ecuador, whose London embassy Assange has been hiding out in for years on the lam from rape changes in Sweden. As Assange explained, “He preferred Latin America, but my advice was that he should take asylum in Russia despite the negative PR consequences, because my assessment is that he had a significant risk he could be kidnapped from Latin America on CIA orders. Kidnapped or possibly killed.”

Only in Russia would Ed be safe, Julian counseled, because there he would be protected by Vladimir Putin and his secret services, notably the FSB. One might think that seeking the shelter of the FSB — one of the world’s nastiest secret police forces that spies on millions without warrant and murders opponents freely — might be an odd choice for a “privacy organization.” But Wikileaks is no ordinary NGO.

Why Assange knew Russia would take in Snowden — it could be a big political hassle for Moscow — is a key question that any counterintelligence officer would want answered. Was Julian speaking on behalf of the FSB or did he just “know” Ed could obtain the sanctuary plus protection he sought?

Just as telling is the recent report on Assange’s activities in Ecuador’s London embassy, where it turns out Ecuadorian intelligence has been keeping tabs on him. Which is no surprise given the PR mess Assange has created for Ecuador with his on-going antics.

Especially interesting is the revelation that, while holed up in London, Assange “requested that he be able to chose his own Security Service inside the embassy, suggesting the use of Russian operatives.” It is, to say the least, surpassingly strange that a Western “privacy advocate” wants Russian secret police protection while hiding out in a Western country. The original Spanish is clear: Assange “habría sido la elección de su propio Servicio de Seguridad en el interior de la embajada, llegando a proponer la participación de operadores de nacionalidad rusa.”

Why Assange wants FSB bodyguards is a question every journalist who encounters Julian henceforth should ask. Until he explains that, Wikileaks should be treated as the front and cut-out for Russian intelligence that it has become, while those who get in bed with Wikileaks — many Western “privacy advocates” are in that group — should be asked their feelings about their own at least indirect ties with Putin’s spy services.

P.S. For those familiar with espionage history, there is a clear precedent for such an arrangement. In 1978 the magazine Covert Action Information Bulletin appeared to expose the secrets of US and Western intelligence. Its editor was Phil Agee, a former CIA officer who had gotten into bed with Cuban and Soviet intelligence; think of Agee as the Snowden of the pre-Internet era. CAIB was in fact founded on the direction of the KGB and for years served as a conduit for Kremlin lies and disinformation that seriously harmed Western intelligence. While CAIB presented itself as a radical truth-telling group, in actuality it was a KGB front, though few CAIB staffers beyond Agee knew who was really calling the shots. One suspects much the same is happening with WikiLeaks.

Per Hillary’s Emails, She Needs Visiting Angels

Late Monday evening, the State Department released a large volume of Hillary emails and it will take a long time to review all of them.

In case you need a sampling of her communications with various people, I am pleased to share a handful. If Hillary is this needy and inept, how can she be president?

Hillary has a cook, needs skim milk and cant figure out the TV guide, she needs Visiting Angels:

Embedded image permalink

 

Evergreen, Secret Service codename:

Embedded image permalink

Worried about server security:

Embedded image permalink

Benghazi, note the date, so no video to blame:

Embedded image permalink

Then, just how anti-Semitic is Hillary and her inner circle:

Hilary and her team are fans of Max Blumenthal, Peter Beinart, J-Street

The Hilary Clinton emails that were just released show that she and her team are far more to the left, and far more interested in promoting the leftist J-Street view of Israel, than she lets on publicly.

Hilary was thrilled with Max Blumenthal’s book “Republican Gomorrah,” writing on September 11, 2009, “I just finished the book and it is great!.”

Blumenthal’s father, Sidney, often shared Max’s articles with Hilary, including “The Great Islamophobic Crusade” where Blumenthal began his career of conflating all evils of the world to Jews and Zionists, blaming them for anti-Islamic initiatives and then moving on to pretend that all Jews in Israel support murdering Arabs for no reason. Hilary asked her staff to “Pls print for me.”

Sid also recommended to her Peter Beinart’s article, “The Failure of the American Jewish Establishment,” saying

H: I’m sure you are preoccupied with the adventures of Lula, et al. Nonetheless, the article below, just posted by the NY
Review, soon to be published, is a breakthrough piece that will have a large impact. It’s worth reading, not least for Frank
Luntz’s poll numbers. The hysterical tone of much of the Israeli leadership and US Jewish community is partly rooted in
this long-term and profound development. Sid

Sid also pushed hard the idea that American Jews are against the Israeli government, as another Sid Blumenthal memo says:

March 23, 2010
For: Hillary
From: Sid
Re: US Jewish and Israeli public opinion
Three new polls released: from AVO07 (all US), J Street (US Jews), and Ha’aretz (Israelis). I’ve
sent Lauren the whole J Street poll to print out for you; its internals are the most detailed,
relevant and suggestive. My reading of that poll is that the administration is in a pretty good spot
with US Jewish opinion and that the drag (about 10 points, I think) has less to do with the Middle
East and Israel than with the economy. Jewish opinion is far more solidly supportive of the
administration generally than the general population (except minorities). Those adamantly
opposed to the administration stance on Israel are preconceived to be against; they are
predictable, a minority of the US Jewish community and have reached their natural limits. The
institutional US Jewish position backing Bibi and against the administration does not have
majority support among Jews.

Sid also recommended that Hilary tell AIPAC that they are too right wing:

For: Hillary
From: Sid
Re: AIPAC speech
This memo does not address specific policy initiatives.
What I’ve written are options. Use what you like, or none at all. Here are some ideas:

1. Hold Bibi’s feet to the fire, remind everyone he was at Wye, his key participant event in
the peace process, and that it was successful.

2. Reassure all players of our commitment to the process and the solution (whatever the
language is).

3. Perhaps most controversial, I would argue something you should do is that, while
praising AIPAC, remind it in as subtle but also direct a way as you can that it does not
have a monopoly over American Jewish opinion.
Bibi is stage managing US Jewish
organizations (and neocons, and the religious right, and whomever else he can muster)
against the administration. AIPAC itself has become an organ of the Israeli right,
specifically Likud. By acknowledging J Street you give them legitimacy, credibility and
create room within the American Jewish community for debate supportive of the
administration’s pursuit of the peace process. Just by mentioning J Street in passing,
AIPAC becomes a point on the spectrum, not the controller of the spectrum. I suggest a
way how to do this below.

1. On US national security interest, Israel’s security and the peace process:
The reason the US has always supported Israel since the moment President Harry S. Truman
decided to recognize the State of Israel is that it is in the US national security interest and
consistent with our values. It is in our interest to support a thriving democracy in the Middle East
Only through the marketplace of ideas will sound policies to help resolve complicated and
seemingly intransigent problems be developed. This administration values everybody’s views.
They are important. You are important. We welcome views across the spectrum, from AIPAC to
J Street. All these views are legitimate and must be heard and considered.

There’s also a Martin Indyk email forwarded to Hilary that blames Bibi for not extending his 2010 settlement freeze, without a negative word about Mahmoud Abbas for refusing to negotiate:

From: Martin Indyk [mailto
Sent: Thursday, September 30, 2010 8:59 AM
To: George Mitchell; Feltman, Jeffrey D
Subject: Dealing with Netanyahu
The principle conclusion from a quick visit to Israel and Ramallah over the weekend is that Netanyahu is in a strong
position politically, with an unusually stable ruling coalition. Nobody I spoke with believed that the government would
have fallen if he had decided to extend the settlement freeze before its expiry, as a gesture to U.S. peacemaking efforts.
In their view, he could have easily garnered the support of a large majority of the people, for whom the settlers are a
marginal concern. And this would have given him leverage over his ministers to ensure their support or abstention in
the cabinet. ..

3. As his friend, paint a realistic picture of the strategic consequences of his negotiating tactics, particularly in terms of
what is likely to happen to the PA leadership if he worries only about his politics and not at all about Abu Mazen’s
politics.
4. If all else fails, avoid recriminations in favor of a “clarifying moment.” The world will of course blame Bibi. But you
should avoid any kind of finger-pointing in favor of a repeated commitment to a negotiated solution and a willingness to
engage with both sides in trying to make that happen, when they’re ready. The Israeli public and the American Jewish
Community should know how far the President was prepared to go and they should be allowed to draw their own
conclusions

Based on the relatively narrow timeframe of last night’s email dump the overall tone is that Israel is obstinate and not interested in peace, the Zionist American Jewish community must be marginalized, the Palestinians are victims and not responsible for any of their actions, and that Hilary must still publicly cultivate the AIPAC crowd while working behind the scenes to undermine it. Haaretz is liberally quoted but no conservative analysis about Israel ever reached Hilary’s eyes through her handpicked, trusted advisers.

(h/t Babylonian Hebrew)

CNN has an early summary with embedded links as well.