welcome to the kaiser report i'm max keiser you know what's wrong with this economy it's all built on a foundation of saying yes the united states is an empire led by a teleprompter it is an empire of debt spanning the globe the bloody culmination of forty years of a pushing spoof trading shadow banking system collateralized by a combination of liar loans and temp workers consuming genetically modified food like products and for this yellow cake baking talcum powder shaking perpetual war making balloon boy chasing fake it to make it economy we're all the heroes of fake girlfriends and steroids and ants picture is we have a new rock star for a time raul you stacey. yes max this is rob university rob you his real name is robber weenie and he faces.

the winning. he faces thirty years i'm for isn't for defrauding some banks front man for l.a. ben charged with six million dollar loan fraud so over a two year period max this guy went to comb america which is a regional bank based out of dallas and managed to secure six million dollars in loans based on the fact that he looked like a rock star and he had one you tube video which had one point four million views and for this they gave him six million dollars over the years beginning in august two thousand and three mile when he sought and obtained four loans from comarca totaling about six point two million dollars according to court documents he provided statements that claimed he had nearly eight million in assets but it turned out his account had only about ten thousand dollars right well i guess this is interesting because the bank they're claiming they have no responsibility

whatsoever in making these loans and i think this is an interesting story because it really gets to the nettle of why this global economy is blowing up because banks just make loans without any due diligence whatsoever and if there's a problem then they get the government to bail them out so that the banks actually nobody works at the bank they have robots that look at the numbers and the paperwork and then they just issue loans no human looks at this the paperwork the people run the bank the c.e.o.'s just collect the fees and if there's a problem they threaten the government either bail us out or will crash the economy . and note that this started in august two thousand and eight the crisis was already well underway you would have thought that you know these banks would have been bend a little bit more responsible and this is even a regional bank that they said are even more responsible than this too big to fail banks right well having a year that is being viewed by

a million times this is no more or less collateral than let's say goldman sachs or j.p. morgan when they go to the market to sell some of their own bonds short term bonds to refinance their banks i say what's the collateral that you're putting up well look at our balance sheet ok we will know you have a negative equity of five hundred to six hundred billion dollars ok yeah and that's why we want to sell some more bonds of the marketplace putting up as collateral negative equity to sustain to finance this loan so this gentleman rob university is no less no more solvent or insolvent then the four big banks in the u.k. or the big banks in the u.s. or any big bank and he used the money to buy a tour bus for seven hundred fifty thousand dollars he lived in a luxury apartment in downtown l.a. and he also spent it all on vacationing in the caribbean europe and africa but he did go by the name rob university as somebody on this article points out if that

means rob you so he went in there and said i'm robbing you and i thought that you know this is at least two thousand advertising he wasn't really hiding the fact that he was robbing you and i thought you know if we started naming credit default swaps should say rob you. collateralized debt obligations rob you must truck should investment vehicle rob you. emulating as heroes the banking fraudsters of our of our era but i thought i guess you thought it would be to help him get a loan if he admitted upfront that he was jimmying fraud if you go to the bank right now you say i'm a fraudster i'm a criminal i'm a rack of terror the bank will give make you a loan because i know that that's what you valued in this economy now really the most important bit about the story is the comments from the average person out there in america and it shows you the problem. with not enforcing the law here are some of them are reading you

a few james says stupid banks serves them right to get taken after they have swindled the public out of billions starr says comerica did not do a good background check on him whose fault is it that they lent him so much money politically correctional says what idiot would loan money to an unknown musician and chris says up to thirty years in prison for making a false statement on a loan application are you kidding me convicted murderers get less time this country is insane remember liar loans that were the basis of the subprime market the banks created a form for people to submit that they were forced to lie they were called liar loans when they had no income no assets the bank still made loans to them but they got bailed out as part of a structured ponzi scheme. well you are right there because here this guy is facing thirty years in prison and remember barack obama provided a blanket immunity to the banks for basically exactly this process of those liar

loans encouraging people to liar loans all the robo signing which is fraud ok they were they were fake signatures on all these documents you know well i am a big fan of alec shaffer's work in los angeles he has these paintings of banks being burned down i believe that the policy should be scorched earth and if the government won't burn down these institutions then the people need to burn them down scorched earth get rid of the cancer obliterate them move now so the next headline is their response to this sort of emerging popular discontent senators question u.s. penalties against wall street banks as too lenient a bipartisan pair of lawmakers on tuesday questioned the justice department's prosecutions a large financial institutions raising concerns that recent settlements have fallen short of holding wall street accountable for wrongdoing these are senators sherrod brown democrat from ohio and charles grassley republican from iowa and they sent

a letter to the u.s. attorney general eric holder regarding the relatively small settlements to like h.s.b.c. for major crimes of money laundering for terrorists and for drug cartels and asking why they're only giving them small fines they said quote the nature of these settlements has fostered concerns that too big to fail wall street banks and joy favored status in statute and enforcement policy the senators wrote in the letter this perception undermines the public's confidence in our institutions and the principle that the law is applied equally in all cases and the law is not applied equally it's a double standard and i think america's got to decide whether they embrace acts of terrorism as a necessary economic stimulus you know america is looking for economic stimulus. terrorism using the broken window keynesian theory is a is a stimulus the banks like h.s.b.c. have been are willing to underwrite terrorism they've been caught underwriting

terrorism that's an economic stimulus so the american congress need to go on t.v. and say we embrace terrorism don't be selective about it and say we want to certain terrorism but we don't like these terrorists that that's the recipe for economic malaise embrace your inner terrorist chuck senator wellesley what does that grassley grassley embrace terrorism your terrorism you want to see happen right in your neighborhood you want to be terrorized because that's an economic stimulus in place it improves your air charisse your duplicitous. now here in the u.k. of course it's not no different f.s.a. it's easier to take on the little guy f.s.a. financial services authority head of enforcement tracy mcdermott has admitted it is easier to go after the little guy rather than take on the big banks with dermot said there are three off sickles that taking on senior bankers including the fact that many decisions are made by a committee so finding responsibility can be difficult complex structures mean it

is difficult to find out who is in charge and f.s.a. rules mean there's a high evidence threshold to punish individuals now max you've said for many years now we should use rico the rackets anti racketeering legislation passed in america that giuliani used against to take down the whole mafia in new york for the same reason that you never get the top guy the jamie dimon lloyd blankfein saying commit the fraud so you've got to infiltrate the organization why don't you send one of these you know banks to loving d.o.j. guys to pose as a bank so they already look like one go in there and pretend to be a banker and get them all committing the crimes well they're all invested in fraud but this reminds me of the frank quattrone defense if you remember at credit suisse he was caught doing laddering in the i.p.o. market committing fraud and the jury said well you're crimes are too complicated so we're going to let you get a walk so the lesson is if you're going to be a criminal make sure your crimes are too complicated for the average drug addled

moron jury in america to understand if you just omit don't it you know get free and say it's too complicated the crimes are complicated you can understand it i have another have another sedative and i'll finally along this you know why it's important to prosecute these guys how apples fall hit bondholders to imagine your broker says you just bought apple stock for more than seven hundred dollars a share even though this week's collapse drove the price below four hundred forty dollars now imagine being told you got this bum deal through the back door by purchasing debt issued by an entirely different company probably your brokers. securities firm for many investors max wall street journal says this isn't a bizarre fantasy like the rest of the economy it's reality they've been sold a complex investment equity linked structured products tied to the price of apple shares investors who had fat yield and seemingly safe short term debt soon will find out that they have been handed huge losses while the firms that sold them have profited the firms are j.p. morgan chase morgan stanley u.b.s.

and barclays. i've sold many of these myself basically if the hedge of owning apple is packaged with. a fantasy security paying five or six or eight percent and then you sell that to some idiot pension fund manager on the basis of a yield and then it quickly goes to zero and then of course they're fired but the investor gets nothing back this is a repeat repeat of a scam that i've seen hundreds of times of so many myself which is bread and butter business for wall street. well a lot of americans are think they're bondholders and in fact their shareholders now apple shares at a twenty five percent loss that they didn't know about but they got good yield eight to ten percent in this case for a couple of weeks and then they got zero zero and of course they can't sue anybody because the arbitration panels are stacked by brokers. ok stay sober thank so much for being on the concert thank you don't go away stay right there i'll be speaking with former scotland yard fraud squad detective rowan boss with davies right after

this. morning news today is once again flared up. these are the images. from the streets of canada. showing appreciation through the day. you know sometimes you see a story and it seems so for life you think you understand it and then you glimpse something else and you hear or see some other part of it and realize that everything you thought you knew you don't know i'm tom harpur welcome to the big picture.

here is mitt romney trying to figure out the name of that thing that we americans call a donor. i'm sorry i missed the guy who cares an awful lot about my country music stars are you know what kind of cells in your neighborhood all want to give us a defeat terrorism be on the lip all the christian. kids are good about it because the. you know the corporate media distracts us from what you and i should care about because they're profit driven industry that sells us and facials that garbage he calls it breaking news i'm abby martin and we're going to break that.

download the official publication to your cell phone choose your language stream quality and enjoy your favorites from alzheimer's if you're away from your television or it just doesn't work so now with your mobile device you can watch on t.v. anytime anywhere. welcome back to the guys. report by max kaiser time now to turn to rohan is worth davies a former fraud squad detective with scotland yard wrote welcome back to the kaiser reports great. first quick question ok you were a fraud squad detective covered white collar crime in the city has the overall level of fraud in the past few years stayed about the same or is it gone up. it's

gone up it's increased right and it seems to me that in fact. things have kind of flip flopped and that instead of really going after fraud there seems to be a tacit approval by the government enough by saying effectively that fraud is the business model that without fraud the city would collapse without the fraud our g.d.p. would even be worse than it is your thoughts well i mean obviously they're going to put it like that and that's why they i think tacitly they realize it and recognize it because there is just so much criminal money coming into london at the moment that the government really doesn't want to do anything to stop it coming in because they want to keep that free flow of money coming in but of course it possesses it carries a great deal of baggage with it and so what tends to happen like for example in the p.p.i. for awards what they do instead of telling the rest for a second ok p.p.i.

this is the selling to customers in blood specifically large banks of personal insurance policies that are designed so such a so-called protect them in the event that they become unable to work in order to protect the payments on a loan that they may have taken from a bank so it's designed if it's the the idea is that it's designed to protect the customer and thereby protect the bank the problem was the policies they were selling didn't protect the customers it's whole they never tell the customers this they made a huge amount of money out of it and it was institutionalized through what by any description but once once the scandal broke and the government realized what an enormous level of fraud had been committed they suddenly realized they couldn't admit to the rest of the world actually we've been committing this you know billions and billions of pounds worth of fraud upon our customers so instead of doing that they gave it another name they called it miss sally because they called

it misselling that sounds ok because that sounds like oh dear the guy just made a mistake he's not to be blamed on ok it's a sad. i will recompense the customer and everybody thinks that's all right actually the problem is what ordinary men and women in the street doesn't realize is that by calling it misselling they are completely dumbing down the whole context if you told the man and woman in the street every single high street bank isn't it defrauding you every time you go in and they try to sell you this rubbish it would send them a completely different message so it's a way of covering up the level of fruit that's actually taking place by renaming it it's very clever it's deliberate it's a policy it's also a bit of a fraud ponzi scheme and what i mean by that is that the the retail fraud with the misselling scandal feeds a certain cash flow to a bank and then the bank of course is engaged with selling us a credit to fall swaps to larger size corporations and companies for protection

against interest rate moves we've found out now that's completely riddled with fraud and then you have that level of fraud which is feeding into the relationship between the banks and the bank of england and they're engaged in quantitative easing which is yet another layer of fraud you could say because they are simply printing money out of thin air this completely on collateralized and they're hoping that this money somehow stimulates growth but in fact is just to me letting more fraud but let me go to some tidbits in the news there tracy mcdermott head of the enforcement of the f.s.a. says it's easier to take on the little guy than go after the big banks so she's saying the financial securities authority that well we would go after the big fraudsters but that's too much work so we try to go after the little guys i guess just for show and because they're lazy your thoughts well obviously the f.s.a. have got to they've you know like everybody else they're measured they're measured by objectives they're measured by results so they've got to go to try and show that

they're doing something and it just becomes easier to go off to the small institutions where the you know the chain of evidence is. much shorter but it does to go up against the big institutions but the problem with the with susan i don't think i'm not blaming this mcdermott's i mean but the fact is she and her team just on sufficiently qualified to be able to understand how you go up against a major mainstream organization ok it was behaving like brits behaving like organized criminals if you are behaving one who wants criminals in this thing you have to bring in men and women who are actually knew how to do with dangerous organized criminals and tracy would seem we don't have those skills right well a couple of points first of all the fact that she is really not qualified to do this job at the essay. an essay is not by accident we find whether it's in the u.k. or the u.s. the regulatory bodies are purposely downsized or the funding is pulled from them

because the banks who are really overseeing these regulatory agencies don't want robust regulators looking at them so that this is not it's not an x. and number two you know she's basically a civil servant who at the end of the day is not really interested in. an unbiased look at what's going on but you mentioned something about a criminal organization or at what point does does the fraud office simply say you know this is in fact a racket and has to be approached under what the in the u.s. they call anti racketeering laws or rico laws it is your experience as a serious fraud office this is in fact a racket correct because you've got now the i see the four big accounting agencies are giving testimony today we know that they're implicated in the racket we know that they when i've worked with them myself the same names that are being on the

being giving testimony today they came to me with a way to cookbooks and five or six different ways that i was running a company in california that's their debts that they do their fraud they keep b.m.g. ernst and young and yet the other two majors they say they're part of the racket they peddle fraud. but they say here's their defense that technically they're not they're not breaking the law. now there's a bit of history there right big talk about that well yeah i mean they would say that when they it was meant to rise david said the point is that when you when you when you move into a level of institutionalized business such as exists in the upper echelons of the city of london all the big institutions the banks the law firms the big accounting firms the recruitment consultants in this together you know david cameron got it right we're all in this together and they they sure are and so consequently everybody has an in an incentive to keep the ball rolling nobody has an incentive

to blow the whistle on on any wrongdoing and consequently because they because they they have an immense conflict of interests wherever you turn in these things they conflicted but it's much easier for them just to ignore the fact they conflicted and just get on making the money because this is the me this is the bottom line is goes back to your point about the nobody's taking them on the fact of the masteries the government has as you said they have dumbed down the regulatory agencies they've taken away from the police the best to get in areas they used to have they've done down the powers of investigators to be able to go up on paper they've got fantastic rules regulations but nobody's you forcing them ok so even they are powerful department of justice for the us claim that it was unable to prosecute h.s.b.c. say for money laundering for drug cartels and terrorists because to do so would

jeopardize the financial system so now you've got a class of untouchables they say we know you know that were criminals and we fund terrorism but if you try to go after us we're going to crash the system as i thought a couple of times they've got this to tear society of untouchables at h.s.b.c. . please lloyds royal bank of scotland j.p. morgan goldman sachs to you doesn't this essentially aren't they kind of thumbing their nose at the public and saying we dare you to overthrow us you know they're just tempting they're just they just saying we we know we're committing crime we know we know the economy is shrinking because of our fraud but we don't think you have the the bollix to overthrow us haha they're tempting the tempting thing it is if they're pushing the mileage in every every new product they bring out every every every new component they offer to the market they are out there pushing the motion of your own believe every time you actually write they know how they're

behaving and it goes right up to the very top of the. well there during the problem for us is because we have allowed we've allowed these institutions to push back and push back and push back in this in the the scandalous belief that somehow somewhere someday they're going to see the light and become good boys the truth mattresses if you can bring it down to basics it's like the playground bully the playground bully swaggers around the playground pushing kids overstating their lunch nicking their bowl and nobody does anything about it is he going to stop of course he's not the only way you stop these people is to is to take them at their word and say fine enough and no further and that's why i was particularly disappointed by the d.o.j. with the h.s.b.c. case because h.s.b.c. in my judgment made a deliberate business case decision to set up a bank which by the way was a component subsidiary of a bit of

a bank here in canary wharf right ninety nine point nine percent owned by banking and kerry will then tell me this was some little tichy mexican bank it was and it was h.s.b.c. who set up this bank with me with the should should knowledge that it was me it was move on to both of them to loan to mexican drug money then it was to obey the law until somebody stands up to them says right that's it you know some some of you are going to do hard jail time they're going to carry on doing it now there was a time when the s.e.c. in the d.o.j. working together in partnership were a real force to be reckoned with some years ago i mean that's been changed because you know the american regulates and it breaks my heart to say this have been watered down in the same way that we've been able to down ok the day i j it has decided this week to go hard after r.b.s. they're not going after city bank and i going after anybody else as a because the da saya british taxpayer owns this bank and it's unlikely to protect

paying the eight hundred million dollar fine so here and other situation the people of britain are so easy. the fraud and to have financially terrorize that america has got them paying for the live war scandal eight hundred million dollars to come out of r.b.s. which is owned by the public well i don't think it's first of all i don't think i don't buy into this this idea that it's somehow a big conspiracy on the behalf of the we get americans just to pick on the brits i don't buy into that it's ok the fact of the matter is that bangs deeply deeply implicated in this in this libel manipulation and the d.o.j. as i've read has got has has an intention to seek to prosecute an element of b.s. i think they're doing it because possibly they've got the best evidence against this particular institution i don't think this is about just picking on r.b.s. because it's a british patsy and the tradition of it but london is the front capital the world

and i this is commit fraud i mean regulated to totally compliant because people don't hold the regulators the feet to the fire and why not drop eight hundred million dollars of the fraud here let the poorest taxpayer deal that you know and because they've already proven themselves to be completely compliant and we can this regard well that might be a very good policy decision on and i certainly wouldn't want to argue against that but the fact of the matter is that it always about this goes back to your original point if you allow your institutions to become pariahs and if you will country gets a reputation for being a pariah state because you allow least if you money to come in and you don't seek to prevent it this is a moral dimension that eventually comes back and bites you up to the backside which says you have to take the rough with the smooth isn't downside for all is upside so if we aren't getting in the neck as a result of it we've only got ourselves to blame ok ron boswell davies right time thanks so much and it's been a joy mix and that's going to do it for this edition of the kaiser report with me

max kaiser and stacy herbert i want to thank. i guessed wrong about davy's if you'd like to contact us please tweet us at kaiser report or at facebook dot com forward slash kaiser report until next time.