Econintersect: Federal prosecutors have decided that Angelo Mozilo, former CEO of Countrywide Financial (now a part of Bank of America), did not commit any criminal wrongdoing. Mozilo is considered to be one of the leaders in advancing the issuance of subprime and other risky mortgage loans that contributed to the housing bubble an subsequent economic collapse. Not only have prosecutors backed off on Mozilo, they will not pursue indictments against anyone at his former company.
A summary from the Associated Press appearing in the Miami Herald stated:
Mozilo has made settlements on civil charges. From The Los Angeles Times:
A federal grand jury in Los Angeles began probing Mozilo in 2008, and four months ago he agreed to pay a $22.5-million fine and to repay $45 million in what the government said were ill-gotten gains to former Countrywide shareholders. The payments settled a civil action by the Securities and Exchange Commission.
“Sometimes the public thinks all you have to do is to indict someone and that’s it,” one of the federal sources said. “But you have to be able to prove your case, and it can be worse losing a case than not bringing one at all.”
The 72-year-old Mozilo hung up the phone when contacted for comment at his home in the Lake Sherwood golf community of Ventura County.
The criminal investigation into Mozilo was never announced publicly, and as a rule federal prosecutors make no formal announcement when such cases are closed.
One defense attorney, however, said the government would probably keep a close watch on civil litigation by Countrywide shareholders against Mozilo and could still decide to bring charges depending on what develops in those cases.
Editor’s note: If someone is forced to make restitution and pay fines for “ill-gotten gains” (words used in an LA Times article, why is there no criminal action involved? Is it because prosecutors look the other way, or is it because the laws do not make “ill-gotten gains” illegal?