60 Minutes Asks: 'Why Aren't We Prosecuting Wall Street?'

Big banks, bailouts, secret bailouts, the defective and even fraudulent mortgages that have already led to foreclosure on millions of American's homes; finally, a mainstream media news source is asking why none of the companies involved - or their executives - have been prosecuted.

Big banks, bailouts, and secret bailouts, the defective and even fraudulent mortgages that have already led to foreclosure on millions of American's homes; finally, a mainstream media news source is asking why none of the companies involved - or their executives - have been prosecuted.

Steve Kroft and 60 Minutes talks with two whistleblowers, Eileen Foster, a former senior executive at Countrywide Financial, and Richard Bowen, a former vice president at Citigroup.

In a script note from "60 Minutes" producer, James Jacoby, begins with "It's been three years since the financial crisis crippled the American economy, and much to the consternation of the general public and the demonstrators on Wall Street,(Emphasis mine) there has not been a single prosecution of a high-ranking Wall Street executive or major financial firm even though fraud and financial misrepresentations played a significant role in the meltdown."

A significant "win" for the Occupy Wall Street movement to be mentioned in such a groundbreaking investigative report? If nothing else, perhaps the Wall Street titans will cringe a little more with each spotting of a protest sign or "mic check."

Part one of the program begins, with the second part of the video at the bottom of the page, and a link to the final portion that's contained in the 60 Minutes Overtime report:

Steve Kroft: Do you believe that there are people at Countrywide who belong behind bars?

Eileen Foster: Yes.

Kroft: Do you want to give me their names?

Foster: No.

Kroft: Would you give their names to a grand jury if you were asked?

Foster: Yes.

But Eileen Foster has never been asked - and never spoken to the Justice Department - even though she was Countrywide's executive vice president in charge of fraud investigations. At the height of the housing bubble, Countrywide Financial was the largest mortgage lender in the country and the loans it made were among the worst, a third ending up in foreclosure or default, many because of mortgage fraud.

It was Foster's job to monitor and investigate allegations of fraud against Countrywide employees and make sure they were reported to the Board of Directors and the Treasury Department.


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Kroft: How much fraud was there at Countrywide?

Foster: From what I saw, the types of things I saw, it was-- it appeared systemic. It, it wasn't just one individual or two or three individuals, it was branches of individuals, it was regions of individuals.

Kroft: What you seem to be saying was it was just a way of doing business?

Foster: Yes.

In 2007, Foster sent a team to the Boston area to search several branch offices of Countrywide's subprime division - the division that lent to borrowers with poor credit. The investigators rummaged through the office's recycling bins and found evidence that Countrywide loan officers were forging and manipulating borrowers' income and asset statements to help them get loans they weren't qualified for and couldn't afford.

Foster: All of the-- the recycle bins, whenever we looked through those they were full of, you know, signatures that had been cut off of one document and put onto another and then photocopied, you know, or faxed and then the-- you know, the creation thrown-- thrown in the recycle bin.

Full transcript available here.

Part 2 of "Prosecuting Wall Street":

The rest of the report can be viewed on the video for 60 Minutes Overtime available online here.

About Diane Sweet

Diane Sweet's picture
Senior Editor, Lives in a gerrymandered district in Michigan.

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