Barack Obama wants to crush an investigation that’s getting too close to him and some really close friends:
Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal
Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.
In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.
But here’s where it gets interesting:
Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.
If allowed to be completed, this investigation would pull the scab off the grave wound inflicted on this country by Bill Clinton, Robert Rubin, and Andrew Cuomo with the assistance of Penny Pritzker and Obama’s good friends at Goldman Sachs.
The involvement of Clinton, Rubin and Cuomo in creating the housing/financial crisis has been written about extensively in FA.
Penny Pritzker, not so much.
Pritzker is the financial genius who took a solvent bank and helped destroy it.
Chicago’s billionaire Pritzker family and their partners bought Lyons Savings for a quite reasonable $42.5 million, but were also given $645 million in tax credits. The kicker was that the buyers only had to come up with $1 million in cash, and got access to the $645 million, and all the bank’s deposits insured by the Federal Savings and Loan Insurance Corporation (FSLIC).
The Pritzker family’s Superior Bank “started life with enormous tax benefits and a substantial amount of FSLIC-guaranteed assets under a FSLIC assistance agreement,” said financial consultant Bert Ely in a Oct. 16, 2001, statement before the U.S. Senate Committee on Banking, Housing and Urban Affairs.
Penny Pritzker is known as the “Queen of the Subprime Mortgage” and for good reason.
Ms. Pritzker served as Superior chairman until 1994. During that period, Superior “embarked on a business strategy of significant growth into subprime home mortgages,” which were then packaged into securities and sold to investors, according to a 2002 report by the Treasury Department’s Inspector General.
Subprime mortgages were the Pritzkers’ junk bonds
“The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages,” Timothy J. Anderson, a whistleblower on financial and bank fraud, told me in an interview.
“The sub-prime mortgages,” Anderson said, “were provided to Merrill Lynch, by a nation-wide Pritzker origination system, using Superior as the cash cow, with many millions in FDIC insured deposits. Superior’s owners were to sub-prime lending, what Michael Milken was to junk bonds.”
The Pritzkers needed a vehicle to ride those mortgages:
Ely stated, “Superior’s trick, or business plan” under Penny Pritzker’s leadership was apparently “to concentrate on sub-prime lending, principally on home mortgages, but for a while in sub-prime auto lending, too.” In December 1992, the Pritzkers acquired Alliance Funding, a wholesale mortgage organization.
She championed subprime mortgages until Superior Bank was seized by regulators in 2001. She never admitted any wrongdoing though her family paid out $460 million to defray the cost of the bank collapse.
1400 families lost their life savings.
This is also a story about how the Pritzkers made enormous amounts of money while shafting thousands of Americans:
Wanting to avoid a lawsuit, the secretive Pritzkers quickly agreed to what the FDIC hailed in December as the biggest settlement they had ever negotiated. The Pritzkers would pay $100 million immediately, then $360 million over 15 years. But there were lots of little provisions in the agreement that benefit the Pritzkers. First, as former bank consultant and longtime thrift watchdog Tim Anderson notes, the $100 million doesn’t even quite pay back all of the unpaid loans made to the owners. The Pritzkers also pay no interest on the $360 million, and since it is paid over many years, the real cost to the Pritzkers may be only around $250 million. As of September 2002, according to FDIC figures, the insurance fund was still out $440 million after this settlement.
But it gets even sweeter for the Pritzkers. The FDIC also agreed to pay the Pritzkers 25 percent of any claim won in a lawsuit against Ernst & Young. Since the FDIC is now suing for $548 million, the Pritzker share could be $137 million. On top of that, the agreement stated that the Pritzkers get half of any civil penalties from such a lawsuit (after certain agency expenses). The FDIC is asking for triple damages, or $1.64 billion; the Pritzker share could be over $800 million.
Even taking into account the “record” settlement they made with the FDIC, the Pritzkers could make more than $700 million in additional profit for running a financial institution into the ground. They had already profited handsomely, sharing in the more than $200 million in dividends to the owners in the ’90s. They accomplished all this with an investment of about $21 million for each partner—though the Pritzkers had also already benefited from $645 million in tax credits.
via Karl
The Pritzkers made vast fortunes on subprime mortgages and raised boatloads of cash for Obama, and he has guarded their interests.
It all stems from the questionable practices of Penny Pritzker and the Superior Bank of Chicago. Prtizker, by the way, is a major bundler for the Obama campaign. Indeed, the scion of one of Chicago’s wealthiest families has raised between $200,000 and $500,000 for Barack Obama’s Presidential bid. Her family also donated over $40,000 to Obama’s 2004 Senate campaign. Now wonder why Obama is opposed to interest rate freezes and a moratorium on sub prime mortgages: most of his campaign cash is from those who have shamelessly profited from our current economic collapse.
So what does one do with a grifter? Give her a high level position.
Penny Pritzker was Barack Obama’s 2008 Campaign Finance Chairman
During the time Penny Pritzker was hawking subprime mortgages, Jim Johnson, President of Fannie Mae, was buying them as Andrew Cuomo pushed Fannie into buying 51% subprimes. Eager to sell subprime mortgages to Fannie, private institutions (think Countrywide) found predatory lending a windfall once Cuomo declared that the YSP was “not illegal, per se.”
Enter Goldman Sachs.
Goldman Sachs, interesting in duping taking advantage of meeting the needs of investors seeking greater returns, started buying those mortgages from Fannie. After all, once Fannie bought those mortgages became backed by the full faith and credit of the United States.
To accomplish this, Goldman exploits the RMBS, or MBS.
Goldman buys up subprime mortgages, bundles them as MBS’s and sells them to investors.
In selling them, Goldman mislead investors.
Even though the MBS’s contained risky subprime loans and second loans, under rules set by Moody’s and S&P Goldman was allowed to rate them “AAA.” After all, they were guaranteed by the US Treasury. They weren’t worth a damn but Goldman failed to disclose that little detail.
Worst of all? Goldman shorted all those sales. They knew that those securities weren’t worth squat and they bet that they would fail. Again, without disclosing it to investors.
In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.
Goldman’s sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation’s premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.
Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.
Wall St. was eventually bailed out by the Bush administration. The plan was devised by then-Treasury Secretary Hank Paulson.
Paulson’s Wall St. bailout has been labeled a “panic.” It might have been worse than that.
Goldman was saved by Paulson’s bailout plan. AIG was saved by Paulson. Lehman was allowed to fail.
Paulson is a former CEO of Goldman Sachs. Lehman was a competitor. If you were wondering why AIG was saved, this might be something to consider:
The firm benefited when Paulson elected not to save rival Lehman Brothers from collapse, and when he organized a massive rescue of tottering global insurer American International Group while in constant telephone contact with Goldman chief Blankfein. With the Federal Reserve Board’s blessing, AIG later used $12.9 billion in taxpayers’ dollars to pay off every penny it owed Goldman.
Goldman Sachs was the second largest contributor to Barack Obama’s Presidential Campaign, right after a state school.
It’s no wonder Barack Obama wants this investigation killed. It could get really messy for him and all involved.
UPDATE:
Schneiderman has been removed from the investigation.
DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education.
DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed.
Except for liberals being foolish.
The only shocker here is, why are the republicans not raising hell about this and every other crime committed by Obama and his regime?
Isn’t it Hank Paulson?
Removed from the investigation by “whom”?? And yes, why AREN’T the republicans raising HELL about this…. sounds like more Democrat Corruption on an immensely large scale….I would like to see the truth come out….I am tired of Bush and Republicans taking the ‘heat’ for all this BS and con games… Sounds like many all too “Wealthy” Liberal con artists were getting squirmy with the NY Attorney General’s “Investigation” eh?
@johngalt: It is. I meant to fix it.
Most likely the reason the republican party has not said anything in my opinion is there is something against them as well. Or just pure simple laziness.
@DrJohn…. done, drj
Dr.John,
Nice job of getting at some of the roots of the Political and “Wall Street” corruption that went on without anyone caring until the meltdown occurred, and the idiots (Paulson et al.) panicked.
Few AGs will have the guts to do what is right, but if NY’s AG goes to the wall on this, the most powerful Democratic Senators in Congress, such as Barney Frank, Kerry, etc., may end up finally facing the music.
The shrapnel on this spreads far and wide. One little country called Iceland, for example, which went bankrupt from the weight of worthless paper Goldman Sachs sold it’s leadership, will be cheering from the sidelines.
What is truly sad, IMNSHO, is that people like Paulson, Blenheim etc., are egocentric dummies of the first order who reached positions of power, so it is assumed by the general public that they “must know what they’re doing.”
Don’t we hear the MSM sing their praises? Even their employees claim they’re smart guys after all. Wrong. I don’t doubt for a moment that most people here who follow Curt’s FA could “Drink their milkshakes” on any given afternoon.
They took the taxpayers to the cleaners, and then when other guys like W.Buffett nodded their approvals, the MSM, including CNBC went, “whew, because we weren’t really sure, so thanks for making us feel better about our pockets getting emptied.”
The public got PICKED. And, Buffett (Mr. I’m-clean-and-independent) and the likes, had a stake in the game.
Sad? Actually no, . . . it’s pathetic.
And the media covers for it’s leftist cronies. Disgusting.
Thanks for posting this, Dr. John. Karl Denninger of The Market Ticker is on the case as well today. I’ll just post the link and his conclusion:
The Fed’s Zero Interest Rate Policy combined with their debasement of the currency is absolutely killing senior citizens. It’s stealing the life savings of an entire generation – the biggest theft in living memory.
This whole scam and the intertwining of the financial players, companies, and Democratic Party bigwigs and Obama is simply too complex for the average citizen to get their arms around. Republicans trying to explain this will see their audience’s eyes glazing over.
Malice aforethought.
The paving stones were laid with the best of intentions…
Then the Con was unleashed against us all, and who has the strength to stand against such evil. Not John McCain’s little hobbits.
I worked for Drexel Burnham in the late eighties, and for Merrill through out the nineties as a low level employee. One could feel something was wrong with the mortgage department. There was an air of frenetic action, to complete the deals before the hammer came down, but it did not fall until 2007-2008.
There is a great line in Schindler’s list after the Jews are gathered into the ghetto. They are trying to reassure themselves that things can’t get worse; in fact there is some benefit to be had with their change of fortunes. “Yesterday I had a complete thought” one character observes.
In the frantic pace of life, who can distill this evil, and hunt down the mal-actors?
This calls strongly to mind the artist who mapped out all the connections in the LTCM scandal/rescue on the public fisc.
He went mad and committed suicide and the FBI came around afterward to take in his map.
http://www.housepricecrash.co.uk/wiki/Financial_Crisis
In one neat place.
Cue the crickets…
@John Cooper: #10,
“The Fed’s Zero Interest Rate Policy combined with their debasement of the currency is absolutely killing senior citizens. It’s stealing the life savings of an entire generation – the biggest theft in living memory.”
Absolutely right on that one, J.C. The 0% policy has also decimated the motivation for “savings” and energized the stampede toward debt, that is now flying The herd over the precipice. I see nothing bringing it back or hauling back onto the plateau. Only powerful leadership can do that and there is None.
Furthermore, this completely stupid and destructive policy, has forced everyone with 2 nickels to Risk their cash, since that has been the only way to attempt some sort of return on those nickels.
“Wall Street” and Washington have done their best to kill the greatest sociology-economic system in history.
@MataHarley: Thanks, Mata
@James Raider:
And they have done so without regard to their own futures. What good is having millions of dollars when you cannot get basic items for subsistence because you kill off the people that provide those?
I read a piece the other day, and I forget where, that likened DC, Wall Street, and people like Buffet to parasites, all living off the host, with the host being the great multitude of middle-class workers in America providing the subsistence for the parasites. And the only difference between actual, living parasites, and those analogized to them, is that in life, most parasites take no more than they need to and rarely kill the host, and never on purpose. The parasites in DC and Wall St., though, are intent on killing the host, and they do not care if they do so. To them, it is not about their future. It is all about the here and now, or, as I like to call it, short-term thinking.
@James Raider:
Exactly so. America used to be the country of Capitalism, but Wall St. and Washington have stolen all the capital. You’re probably old enough to remember when banks actually needed savers to deposit their capital before they could lend it out to businesses. No more. Banks don’t need depositors these days; They just borrow printed “money” from the fed at 0% interest and loan out ten times as much at 12%.
Although the “money” didn’t exist until the fed printed it and the bank loaned it out, the bank gets to keep the interest (which adds to the money supply and causes inflation). Banks are no longer facilitators of capitalism – they’ve become government-sponsored agents of theft.
@Bill Henslee: #11,
B.H., the Republicans have great difficulty getting Ahead of the message. They too often look like deer (or moose), in Skook’s headlights.
Throughout my meanderings over the past thirty some years through the byways of Wall Street and corporate America, most of the very wealthiest people I have known, including billionaires, were Democrats. These were not socialists of the Obama kind, and they were tight with their money, however, they knew that Dem politicians could be either bought or flummoxed. I’m not suggesting that some Reps I’ve known weren’t also looking for influence with Pols, but they were more ready to help financially and anonymously where they saw need.
So, I get a chuckle reading some of the comments deposited on FA by fly-by trolls who accuse the rich of owning the Republicans, or Republicans being shills for the rich, or blaming the rich for whatever ails them. They seem to sprout like infectious rashes, spreading ideological stupidities that were blended into the cool aid.
@Katherine: Great link! I’d never read the full, sordid story of LTCM before.
#15,
johngalt,
” And the only difference between actual, living parasites, and those analogized to them, is that in life, most parasites take no more than they need to and rarely kill the host, and never on purpose.”
As you know, California has been descimated financially, morally, and educationally with little light evident on the road ahead. From San Francisco to Los Gatos, there is staggering wealth concentrated in hands which are both powerful financially, and influential politically. And yet, those hands have historically refused to invest, really invest, in education, . . . for example. I’ve personally known a great many of those “hands” and can attest to the fact that they are Democrat supporters. There is also an overabundance of holier-than-thou sanctimonious detachment from the “lower class” portion of the society that has so willingly drunk the cool aid.
Yeah, it’s more than a little horrifying to see it all gathered in one place.
It is like each con was a dress rehearsal for the next con, “How much can we drain the public fisc before they figure out what were doing?”
The rest of us are so busy just trying to have our lives and tend our children we can not combat this.
And they’ve taken the lead investigator off the case.
http://www.huffingtonpost.com/2011/08/23/new-york-attorney-general-eric-schneiderman_n_934517.html
When TARP was going down, I was writing/calling every congress person I could.
My father taught me long ago, “If someone asks you for a lot of money, quick and don’t question the reason, put your hand on your wallet and run, you are being ripped off.”
Dreams from my father indeed.
Because the GOP is afraid that their dirty laundry would wind up in public too.
Well, the development this morning that Schneiderman, who intended to do his job on behalf of New York citizens, was summarily kicked off the 50-state panel by the head of the commission just about says it all. Obama, Geithner and Holder will never let anyone get close enough to indict Barry.
Thank you, Dr. John, for your informative post, which I intend to ciruclate. The truth is stranger than fiction.
Obama has his hands in the public cookiejar
January 22, 2013
Revised
I. LARGEST DATA THEFT, COMPUTER HACKING, SECURITIES FRAUD AND INTELLECTUAL PROPERTY THEFT IN HISTORY
In 2000, Cliff Mortensen contacted Bruce MacLeod of Hennigan, Bennett and Dorman (now McKool, Smith, Hennigan) in Los Angeles, CA to represent him in a wire fraud and data theft and computer hacking federal lawsuit against Trans Union LLC, 555 W. Adams, Chicago, IL and Acxiom Corporation (ACXM) 601 E. 3rd Street, Little Rock, AR 72201. Trans Union was represented by Michael O’Neil of DLA Piper of Chicago and Acxiom was represented by Amy Stewart of the Rose law firm of Little Rock, AR. Acxiom and Trans Union had been secretly stealing and highjacking billions of dollars worth of data from Cliff Mortensen and his companies Credit Bureau of Carmel and Pebble Beach, Inc., Credit Research, Inc. and many other independent Trans Union credit bureau franchisees across the country for at least ten years. Trans Union and Acxiom called it “data mining”; Cliff Mortensen’s lawyers called it “theft”. It is the largest data theft and hacking and wire fraud crime in United States’ history. Trans Union during this period was controlled by attorneys Penny Pritzker and Robert Pritzker (d.) of Chicago, IL. Trans Union’s address is 555 West Adams Street, Chicago, IL 60661. The case number was 00 C 3885 Northern District of Illinois, Judge James B. Moran (d.). This was a peremptory filing by Trans Union for venue choice and position. Mortensen was a defendant and a counter plaintiff in this SLAPP (Strategic Lawsuit Against Public Participation) suit.
The data hacking/hijacking occurred on IBM super computers at Trans Union facilities in
Chicago, IL and Fullerton, CA as well as Acxiom facilities in Westlake, CA and Little Rock, AR during routine daily database maintenance and “batch processing”. This data theft occurred in terabyte quantities at nanosecond speeds. Acxiom managed data files on the Trans Union Cronus Database at these and other Trans Union locations. Acxiom was granted unlimited access to hundreds of millions of data files many of which were not the property of Trans Union or Acxiom. These files were the information root of millions of Trans Union and Acxiom target marketing lists and credit reports which were sold to most banks and financial institutions. These privately owned credit files were subject to the copyright laws of the United States of America. They were the intellectual property of the individual credit bureau owners and were subject to royalty payments per contract. Acxiom paid Trans Union for this stolen data with hundreds of millions of dollars worth of stock warrants (ACXM). Trans Union did not redistribute this revenue with the lawful owners of this data, the independent Trans Union affiliated credit bureau owners across the United States. It appears that the management of Trans Union and Acxiom believed that if the data theft, computer hacking and wire fraud were conducted on IBM super computers at speeds faster than the eye could see, it wasn’t really provable “theft”. Data theft leaves no evidentiary “footprint” no matter how often the data is copied or illegally accessed (stolen) and Trans Union and Acxiom knew it. It was the “perfect burglary”. The Pritzkers got their money the “old fashioned way”-they stole it!
This data theft began to occur after Allen J. Flitcraft (formerly with IBM), resigned as president of Trans Union. Charles Morgan was president of Acxiom Corporation and Harry Gambill was president of Trans Union during this period of wire fraud and data theft cybercrimes. Charles Morgan was abruptly replaced in 2007 after 30 years at Acxiom Corporation and settling Cliff Mortensen’s lawsuit for data theft. 2007 was the year Trans Union and Acxiom settled with Cliff Mortensen. Harry Gambill has also been replaced at Trans Union LLC and is no longer on the board of directors at Acxiom Corporation. Robert Pritzker prior to his death was replaced at the Acxiom board of directors. Most all of senior management at Trans Union LLC and Acxiom Corporation have been replaced after this period of data theft.
II. RECIPIENTS OF STOLEN DATA IDENTIFIED
AND REPORTED
Trans Union has been a major stockholder in Acxiom and they had interlocking directorates. Trans Union was the primary source for the very current database at Acxiom.
The major national banks, financial institutions and large credit data users and data brokers including the United States government which unknowingly purchased the hacked and stolen data from Trans Union and Acxiom Corporation were Chase, Citibank, Bank of America, Wells-Fargo, HSBC, Capital One, Bank One, American Express, U. S. Bank, Discover Card, LexisNexis, and most banks which issued credit cards including First National Bank of Omaha (FNBO). FNBO received a $23,000,000.00 court award against Trans Union for data theft during breach of contract in 1997, case number 8:95CV-57 United States District Court District of Nebraska-Allen Rugg, Esq. of Powell Goldstein for the plaintiff. Roger Longtin, DLA Piper, for the defense. Trans Union has a bountiful history of data theft in the building of their database. The data theft was discovered during a “sting operation”.
For ten years, Trans Union and Acxiom Corporation shared the ill gotten proceeds without paying the rightful owners of the data, the hundred or so local Trans Union franchisees across the United States including the bureau owned by Cliff Mortensen. This wire fraud, conversion and data theft continued for at least ten years before Trans Union admitted to it during settlement of one of the many federal cases against Trans Union. Trans Union admitted to their criminal activity and they wanted all settlements to be secret.
Eric Holder, (appointed by Barack Obama), of the Department of Justice, Andrew Cuomo (Attorney General and now governor of New York), Kamala Harris (Attorney General of California) and the F.B.I. have failed to prosecute these crimes by these Pritzker owned entities.
Penny Pritzker is part of the Pritzker family of Chicago (Hyatt Hotels, Trans Union Credit, Trans Union Healthcare and the Marmon Group). Penny Pritzker is a graduate of Harvard University and Stanford University Law School. She was the finance chair for President Obama in 2008 and was considered for but not offered the cabinet position of Commerce Secretary in 2009 due to her colorful past. In 2002 Penny Pritzker was a defendant in a RICO (Racketeering Influenced Corrupt Organizations) lawsuit filed against her in the Superior Bank (Chicago) collapse. Mortensen asked Bruce MacLeod (now with Mc Kool Smith Hennigan. In Los Angeles,CA to file a RICO action against the Pritzkers for wire fraud, extortion and anti-trust crimes. Bruce MacLeod refused to file on several occasions.
III. CONFLICTED WORKING RELATIONSHIPS
OF LAW FIRMS
Mr. MacLeod was referred to Cliff Mortensen by his attorney Ralph Wegis, a pioneer in SLAPP lawsuits, of Bakersfield, CA. Bruce MacLeod evaluated the case for twelve months before he decided to accept it. This was a major delay that benefitted Trans Union and Acxiom. Mr. MacLeod had a prior working relationship with opposing counsel, DLA Piper of Chicago. Both firms worked together successfully on the 1994 bankruptcy of Orange County, CA and later (without Mortensen’s knowledge) worked together representing John Hancock Life Insurance Company (v. Bank of America) on the international Parmalat (Italy) bankruptcy case. Both firms have represented the Catholic Church in the United States. Michael Hennigan and Bruce MacLeod had mutual friends at DLA Piper. Mortensen was not informed of this ongoing conflicted friendship and dual working relationship until August 15, 2012. Mortensen would have never permitted it and would have terminated Bruce MacLeod and Michael Hennigan had he known.
IV. ABUSE OF PROCESS
Initially, Michael O’Neil of DLA Piper sued Cliff Mortensen in a SLAPP (Strategic Lawsuit Against Public Participation) lawsuit to quell Mortensen’s impending lawsuit for data theft, fraud and breach of contract. This was an attempt by DLA Piper to bankrupt Cliff Mortensen. This was abuse of the court process. The $1,000,000.00 cost to defend this suit was paid for by Cliff Mortensen’s insurance carrier, State Farm. Cliff Mortensen was represented by Steve Baron of Mandell Menkes of Chicago. This case settled for $17,000.00. There was no SLAPP Back or malicious prosecution lawsuit filed on Mortensen’s behalf. Steve Baron, of Mandell Menkes, did not attend the settlement conference.
V. CASE VALUATION
On the first discovery trip to Chicago, the home of Trans Union, Bruce MacLeod mentioned to Cliff Mortensen that if his case were only worth $4,000,000.00 his firm would not be interested in representing him. He then excused himself for a lunch meeting with his old pals at DLA. Bruce MacLeod later indicated the case was worth in excess of $100,000,000.00 per appraisal by Monica Ip of HemmingMorse due to contract breach and fraud.
VI. UNDERSEAL AND CASE SECRECY
Bruce MacLeod and Ralph Wegis allowed the case to be filed “under seal” with a protective order (against the strong protestations of Cliff Mortensen). Mortensen told Bruce Mac Leod on several occasions that he did not approve of this secrecy strategy, yet Bruce Mac Leod insisted on secrecy. This order only protected Trans Union, Acxiom and the Pritzker family from public exposure of their data theft, wire fraud and anti-trust crimes. Wall Street investors would have benefitted from public exposure of these crimes. Bruce MacLeod was asked on at least fifteen occasions to remove the case from protective order, to unseal the filings and to amend the complaint to include an anti-trust pleading and RICO claim against Trans Union. Bruce MacLeod always refused and would become very irritated whenever the subject was broached by Cliff Mortensen. This secrecy and failure to amend accommodated his friends’ wishes at DLA while ingratiating himself with them for amicable working relationships and ignoring the demands and best interests of his clients, Cliff and Pat Mortensen. Secrecy weakened the case and settlement position for seven years. It fortified Trans Union’s and Acxiom’s position by delays. Secrecy allowed insider trading by Trans Union to sell out their position in Acxiom securities at $40.00 per share. Acxiom stock today trades in the $18.00 range. Investors lost a fortune. If Cliff Mortensen’s theories of data theft were so misguided, as Michael O’Neil, of DLA Piper stated, why was secrecy paramount in Trans Union’s and Acxiom’s strategy? The answer is insider trading, wire fraud and securities fraud.
VII. SECURITIES FRAUD AND INSIDER TRADING
Public exposure of their securities fraud and wire fraud crimes terrified the management of Trans Union and Acxiom, a publicly traded company (NASDAQ). The secrecy and delays benefitted Trans Union and Acxiom by keeping the other franchised credit bureaus, investors, the capital markets and the Securities and Exchange Commission uninformed about their data theft, wire fraud, securities fraud and anti-trust actions. Public exposure of these crimes would have resulted in more lawsuits, sanctions, significant financial loss for Trans Union and Acxiom with subsequent erosion of investors’ value in those securities. Trans Union was paid hundreds of millions of dollars in stock warrants by Acxiom for unlimited access to the stolen data. In 2000, Trans Union cashed in their Acxiom stock warrants for hundreds of millions of dollars with an Acxiom stock price of $40.00. They had insider trading knowledge that the data was stolen. Other investors were not similarly enlightened. Today, Acxiom stock trades in the $18.00 range, a loss of over 50% of Trans Union’s unload price of $40.00 Investors have lost billions of dollars of stock equity. This is securities fraud.
Bruce MacLeod was accommodating Trans Union and Acxiom to Mortensen’s peril. Cliff Mortensen’s lawyers by their secret filings aided Trans Union and Acxiom Corporation in the theft “cover up” and securities fraud of copyright law protected credit data files and intellectual property. Even the lead Judge James B. Moran was tired of the ongoing secrecy and stated it.
VIII. SCOPE OF THE DATA THEFT AND BRUCE MAC LEOD’S FAILURE TO FILE WIRE FRAUD AND SECURITIES FRAUD
CAUSES OF ACTION
After an error filled initial filing, Bruce MacLeod finally did some intensive legal discovery work regarding Mortensen’s claims of fraud, breach of contract and data theft in a first amended complaint. He found that Trans Union and Acxiom had stolen billions of dollars worth of data from individual Trans Union credit bureau franchisees across the United States and over $100,000,000.00 from Cliff Mortensen. Mr. MacLeod called it “fraud”. He never claimed “wire fraud or securities fraud” which are felonies. Again, Mr. MacLeod was protecting his Trans Union and Acxiom. He should have been concerned with his own client and securities investors, who lost hundreds of millions of dollars. Mr. Roger Longtin of DLA Piper told one of the court reporters that Bruce MacLeod had “cracked the data theft case” but he (Roger Longtin) would deny it if queried.
MacLeod demanded to see the personal computer hard drives of Mortensen, his son and their businesses plus all of Mortensen’s personal tax and corporate tax filings. Mortensen asked Bruce MacLeod for reciprocity from the Pritzkers , Trans Union and Acxiom. Bruce MacLeod refused his request. Bruce MacLeod allowed Trans Union and Acxiom to take Mortensen’s personal videotaped deposition on ten different occasions, yet he never deposed Robert Pritzker (d.) or Penny Pritzker, the “de facto” owners of Trans Union. Charles Morgan of Acxiom stated at a deposition “Hell, if I had known the data was stolen I never would have paid for it” He was replaced at Acxiom shortly thereafter.
IX. ANTI-TRUST CYBERCRIMES
In an anti-trust move, Experian denied Experian database access to Cliff Mortensen in 2000. Trans Union, in a similar anti-trust move, denied Cliff Mortensen access to his own database in July of 2001. He was forced to terminate twenty employees. This was an extortionate, fraudulent, monopolistic and illegal attempt to force Cliff Mortensen to drop his lawsuit against Trans Union and Acxiom. Trans Union and Experian then aggressively pursued Cliff Mortensen’s customers in a blatant anti-trust, unfair competitive move. Cliff Mortensen asked Bruce MacLeod to enjoin Trans Union from denying Cliff Mortensen access to his own database. Bruce MacLeod refused as it would be “too much legal work”. There was a conspiracy between Trans Union and Experian to destroy Mortensen’s businesses. They succeeded.
X. EXTORTION
During this access denial period David Emery, Chief Financial Officer of Trans Union at that time, asked Cliff Mortensen “Are you ready to talk about signing the contract amendment now”? David Emery was clearly committing extortion. Signing the amendment would have allowed Trans Union and Acxiom Corporation to continue their data theft. Mortensen refused to sign any amendments. Alice Conlon of Trans Union was the credit bureau liaison for the independent credit bureaus and worked for Trans Union during this period. She is still employed at Trans Union. She threatened (extorted) Cliff Mortensen with the statement that “If you don’t do what Trans Union wants by amending your contract, they can do plenty to you”. They did.
Trans Union and Acxiom are corrupt organizations which have used extortion, theft, wire fraud, securities fraud, computer hacking and perjury to achieve their profit goals and revenue streams by stealing billions of credit records from individual credit bureaus. This clearly qualified as a RICO (Racketeering Influenced Corrupt Organizations) action. This is the largest data theft and wire fraud in history. Trans Union would file false computer printout reports (wire fraud) with Cliff Mortensen’s credit bureau offices on a daily basis for fifteen years. They did not disclose to the Securities and Exchange Commission their stock manipulation and securities fraud.
Mr. Hennigan belittled the value of the case on many occasions. He stated the case was “only worth $400,000.00”. When queried, Bruce MacLeod did not have an explanation why one of the Pritzker companies, Conwood Smokeless Tobacco, prevailed in a similar unfair competition and anti-trust lawsuit against United States Tobacco for 3 billion dollars including punitive damages (Upheld at U.S. Supreme Court and satisfied ). United States Tobacco was forced to issue stock to fund this upheld award. Conwood Tobacco v. U.S. Tobacco was an anti-trust case as was Mortensen’s. Bruce MacLeod and Michael Hennigan refused on several occasions to include an anti-trust, RICO or criminal pleading in his case. Again, their lack of action protected Trans Union and Acxiom. Cliff Mortensen was so disappointed in his legal representation at this point that he contacted the law firm of Boies, Schiller and Flexner, LLP for representation. Mr. Boies refused Mortensen’s case for “a variety of reasons”.
In 2006, John Blenke, chief counsel at Trans Union offered Mortensen $7,000,000.00 to settle with secrecy. Mortensen rejected that offer. This offer was made in the presence of Ralph Wegis and Bruce MacLeod. John Blenke closed the meeting with the statement to Cliff Mortensen “Cliff, you can call me at any time to discuss settlement”! Cliff Mortensen was taken aback. He thought he had his own legal counsel. What were Bruce Mac Leod and Ralph Wegis being paid for? This was unethical for John Blenke to address Cliff Mortensen as he did. It was equally unethical for Bruce MacLeod and Ralph Wegis not to object and say nothing.
Since Mortensen’s case was under seal, Trans Union and Acxiom had no motivation to “true up” with Cliff Mortensen and settle for their data theft and wire fraud. They did not admit to their theft and wire fraud until seven years later at settlement. Then they wanted a secret settlement as their admission of wire fraud crimes would “be embarrassing to Penny Pritzker and the Trans Union organization”. It also would have exposed securities fraud. Bruce MacLeod and Michael Hennigan were always willing to oblige DLA Piper’s secrecy wishes.
The case was progressing very slowly through the courts. Mortensen had large financial obligations and he informed Bruce MacLeod of his dire financial condition for years, yet Bruce MacLeod still kept the case progression slow and under seal. He suggested that Mortensen borrow $200,000.00 from Ralph Wegis to help his financial position. That money only lasted six months. Bruce MacLeod suggested that Cliff Mortensen allow all of his real estate investments to go into foreclosure. He was insolvent by 2007 and forced into a weak settlement position. On settlement day, Mortensen was in debt approximately $5,000,000.00 and had already liquidated about $3,000,000.00 of his personal assets. Bruce MacLeod had copies of Cliff Mortensen’s tax returns. MacLeod has extensive accounting expertise and he understood Cliff Mortensen’s untenable financial and emotional position. Bruce MacLeod’s actions had “broken” Mortensen emotionally and financially. He set him up for minimal settlement. Five years before settlement, MacLeod had Mortensen petition the Court to explain his insolvency.
XI. DUAL REPRESENTATION
Incredibly, prior to settlement, Bruce MacLeod suggested that he (Bruce MacLeod) “become employed by opposing counsel, DLA Piper or Trans Union to facilitate settlement”. His stated theory was that “it would entice Trans Union to settle” as Bruce Mac Leod would then be barred from accepting any new cases against Trans Union or Acxiom. He told Cliff Mortensen he did not want to go against Trans Union or Acxiom again. He stated that it would be illegal for him to decline other similar cases unless he was employed by opposing counsel.
Cliff Mortensen was flabbergasted! He believed Bruce MacLeod was either breaking the law or at least violating California State Bar ethics. He could not believe what Bruce MacLeod was saying. Cliff Mortensen told him “absolutely not”! Mortensen felt this would be legal malpractice and certainly not in his best interest. He no longer had any trust in Bruce MacLeod, Michael Hennigan or their law firm. He began to believe that the fraternal relationship with DLA Piper was even cozier than suspected. On August 15, 2012, Mortensen discovered that both firms had been working together for the John Hancock Insurance Company on the Parmalat (Italy) bankruptcy case and Catholic Church litigation for years. Had Mortensen known this, he would have terminated Hennigan, Bennett and Dorman post haste.
XII. LACK OF TRIAL PREPARATION
Mortensen was forced into a weak settlement position particularly when Bruce said “Don’t start believing your own bullshit” (not very encouraging). Still, there were no “trial ready” motions or “at issue memoranda” filed on Mortensen’s behalf. Bruce MacLeod never demanded a “true up” of what was owed to Mortensen. The delays accommodating Trans Union and Acxiom Corporation continued. The case was not positioned for serious settlement negotiations. Cliff Mortensen was financially broke and emotionally broken and unable to continue with the stalled litigation.
Cliff Mortensen’s hacked and stolen data was valued in excess of $100,000,000.00 (per contract breach) by forensic accountant and appraiser Monica Ip of HemmingMorse, San Francisco, CA. There were at least one hundred other Trans Union franchised bureaus in similar situations.
XIII. MEDIATION
At the suggestion of Michael Hennigan, mediation took place at the law offices of Antonio Piazza of Gregorio, Haldeman and Piazza in San Francisco. This was the first time Mortensen had ever met Michael Hennigan. During mediation, Cliff Mortensen stated to his lawyers that he wanted Trans Union to offer a settlement figure before he did. They all said “no” that Cliff Mortensen “would have to come up with a figure first”. Mortensen felt this would be bidding against himself and not good strategy. His lawyers gave no guidance in developing a settlement strategy or case settlement value during or prior to mediation. Mr. Wegis said Mortensen had “fought the good fight” but it was “time to settle”. Mortensen’s lawyers were silent during the Anthony Piazza meeting. Cliff Mortensen felt he had been set up and railroaded into settlement. Bruce MacLeod, Michael Hennigan, and Ralph Wegis offered no counsel or guidance during the mediation. Mortensen was forced to fend for himself with three of his high powered attorneys present and silent as lambs. Mortensen’s State Farm Insurance paid ($1,000,000.00+) to attorney, Steve Baron of Mandell Menkes, Chicago, IL, who was absent as was Amy Stewart of the Rose Law Firm representing Acxiom Corporation.
XIV. SETTLEMENT
Eventually, during the mediation, Cliff Mortensen proposed a settlement figure of $15,000,000.00. Anthony Piazza said “No” he “would not present the offer to Trans Union”. This refusal violated the negotiation protocol. Anthony Piazza said the figure was “too high” but he did not say on what he based his conclusion. He just pulled a number out of the air with no consideration to the professional appraisal of Monica Ip at HemmingMorse. Attorney Anthony Piazza was supposed to be a neutral mediator. His bias toward Trans Union and Acxiom and his lack of neutrality cost Mortensen a fortune. He then beat Cliff Mortensen down to $10,000,000.00. Cliff Mortensen’s lawyers were silent and did not advocate his position at all. The smirk on Michael O’Neil’s face revealed the incongruity of the settlement. Bruce MacLeod did not inform Cliff Mortensen of the massive similar cyber crimes litigation in which Trans Union was involved.
The case settled on October 31, 2007 for $11,000,000.00. The settlement called for forgiveness of all transgressions “known or unknown” and global settlement with a non-disclosure clause and a $500,000.00 penalty for breach clause. Mortensen received $6,000,000.00 and his lawyers received $5,000,000.00. From Mortensen’s proceeds he repaid Mr. Wegis the $200,000.00 loan from his retirement fund plus interest. He also paid Wood & Porter Attorneys (referred by Bruce MacLeod) $125,000.00 for tax advice since Michael Hennigan said during the mediation that his firm did not dispense tax advice. Bruce MacLeod cautioned Cliff Mortensen to be very conservative with any settlement money as it may be needed it to pay federal taxes. Bruce MacLeod and Michael Hennigan knew it was a “net negative” settlement. Yet, they remained silent.
So much for Super Lawyers!
Nowhere has this settlement of data theft been publicly acknowledged in required 8-K, 10-K and S-1 filings for Trans Union LLC and Acxiom or elsewhere. This violated Security and Exchange Rules and kept the investors uninformed of this data theft litigation. John Blenke, chief counsel for Trans Union, initially offered Cliff Mortensen $7,000,000.00 in 2006 to settle secretly. This should have been public information. His signature is on the 8-K, 10-K and S-1 filings for Trans Union. Acxiom Corporation had similar filing requirements. Trans Union benefitted from insider knowledge and insider trading of Acxiom stock. Trans Union was not forthright in disclosing their data theft and fraud lawsuit and settlement in their initial public offering of Trans Union stock.
The day Cliff Mortensen settled for $6,000,000.00 net, he was bankrupt by three million dollars and Bruce MacLeod knew it. He, Ralph Wegis and Michael Hennigan settled Cliff Mortensen into bankruptcy. Bruce Mac Leod had earlier petitioned the Court on Mortensen’s insolvency yet he denied knowledge of Mortensen’s finances when he was queried recently by Mr. Eli Morgenstern of the California State Bar. This was not Mortensen’s plan for successful prosecution of the case. Cliff Mortensen subsequently defaulted on seventeen real estate loans (government insured) totaling millions of dollars. He felt he was forced to settle as his lawyers had no plans to take his case to trial and the opposition knew it. Cliff Mortensen was not “made whole” and the subject was never mentioned by Bruce MacLeod, Ralph Wegis , Michael Hennigan, Antonio Piazza, Michael O’Neil or Steve Baron.
Two weeks after the mediation and prior to final settlement Cliff Mortensen asked Bruce MacLeod if the mediation was binding. Cliff Mortensen wanted to cancel it. Bruce MacLeod stated that the mediation was indeed binding and could not be cancelled. This was not true. Cliff Mortensen relied on Bruce MacLeod’s false statement. This is malpractice.
XV. DESTRUCTION OF RECORDS
There was a confidentiality agreement on the settlement with a $500,000.00 penalty clause if Cliff Mortensen breached it. DLA Piper demanded that Cliff Mortensen destroy all personal court records, documents and digital records of the legal proceedings. Cliff Mortensen did not destroy them. Bruce MacLeod maintained all of his legal records and case log history on his computer. He has that digital record today. Two years after settlement Ralph Wegis returned to Cliff Mortensen all legal documents in his possession. Bruce MacLeod refused to do the same when requested. He destroyed them against Cliff Mortensen’s wishes.
XVI. INITIAL PUBLIC OFFERING CANCELLATION
In April of 2011, Cliff Mortensen posted the details of the case on Yahoo! Finance. Within 72 hours he received a disturbing telephone call from an irate Bruce MacLeod, McKool Smith Hennigan, threatening Cliff Mortensen with legal repercussions from DLA Piper and demanded that he “take down” the offensive posting immediately. Mortensen informed him that he would not remove the posting. Oddly, Bruce MacLeod stated that he “did not and could not represent Mortensen any longer” and he had attorney Andrew Swartz of Spiering, Swartz and Kennedy of Monterey call him. Mr. Swartz stated that Bruce MacLeod requested that he call as Mortensen was in need of representation. Mr. Swartz was clueless about the call. Mortensen thanked him for his concern and told him he had no legal issues presently.
The next day Mortensen received another disturbing call from equally irate opposing counsel, Michael O’Neil of DLA Piper. He threatened to sue Mortensen for $500,000.00 and to enjoin him from breaching the confidentiality agreement. He demanded that Mortensen take down the Yahoo! Finance posting. Mortensen informed Mr. O’Neil that he had every legal right to discuss any crimes committed against him at anytime and anywhere he chose. Michael O’Neil of DLA Piper queried “Why now”? He followed up his request in email format at Cliff Mortensen’s request. Trans Union was in the process of an Initial Public Offering and this theft and fraud case settlement could have been an issue of concern at the Securities and Exchange Commission. It still is.
On July 5, 2011, Ernst and Young filed a Consent form S-1 for Trans Union’s Initial Public Offering. John Blenke’s name was listed on that filing as EVP and Corporate Counsel for Trans Union.
The IPO was withdrawn February 17, 2012.
XVII. CHANGE OF OWNERSHIP
In 2010, Trans Union was sold to a partnership of Madison Dearborn Partners, LLC. Trans Union sold to Goldman Sachs’ GS Capital Partners and Advent International for 3.2 billion dollars in early 2012. The Marmon Group and the Pritzkers wanted distance themselves from the criminal activity at Trans Union.
“Bobby” (Siddharth) Mehta, Trans Union’s president has stepped down as well as Oscar Marquis, David Emery, Harry Gambill (former president of Trans Union) and Bill Rogers. Charles Morgan (former CEO of Acxiom Corporation) has also been replaced as well as much of upper management of Trans Union and Acxiom. Chet Wiermanski, former Global Chief Scientist at Trans Union has been replaced. He is currently at the Federal Reserve Board in Philadelphia. While at Trans Union he was responsible for the algorithmic conversions of Trans Union’s stolen database to attributes and chacteristics.
Cliff Mortensen has never heard from DLA Piper, Amy Stewart, the Rose Law Firm, Michael O’Neil, Bruce MacLeod or Michael Hennigan again.
XVIII. MALPRACTICE
1. Bruce MacLeod filed the case “under seal with a protective order” against the wishes and demands of the Cliff Mortensen.
2. Bruce Mac Leod failed to include causes of action for wire fraud, RICO, anti-trust, SLAPP Back, stock fraud or malicious prosecution lawsuits.
3. Bruce MacLeod failed to file a claim with State Farm Insurance Company for theft of data. Cliff Mortensen had business policy with State Farm Insurance Compnay.
4. Bruce MacLeod failed to disclose that both Bruce MacLeod and DLA Piper (adversary) represented John Hancock Life Insurance Company v. Bank of America in the Parmalat bankruptcy.
5. Bruce MacLeod failed to disclose that DLA Piper and Hennigan, Bennett and Dorman both represented the Catholic Church.
6. Bruce MacLeod allowed ten depositions of Cliff Mortensen (abusive) and no depositions of the Penny Pritzker or Robert Pritzker, the “de facto” owners of Trans Union and hundreds of millions of dollars worth of Acxiom securities.
7. Bruce MacLeod demanded all of Cliff Mortensen’s personal and business tax records and none from the Penny Pritzker , Robert Pritzker, Trans Union or Acxiom.
8. Bruce MacLeod failed to include extortion claims against David Emery, Chief Financial Officer of Trans Union and Alice Conlon, the credit bureau liaison for Trans Union.
9. Bruce MacLeod, Michael Hennigan and Ralph Wegis failed to advise Mortensen during mediation. Mortensen’s lawyers sat in silence.
10. Bruce MacLeod, Michael Hennigan and Rallph Wegis failed to force mediator, Anthony Piazza, to deliver Mortensen’s demand for $15,000,000.00 to Trans Union during mediation.
11. Bruce MacLeod suggested that he go to work for Trans Union so that he “could never again sue Trans Union or Acxiom”. This dual representation of both plaintiff and defendant was not in Mortensen’s best interests. Mortensen never agreed to this.
12. Bruce MacLeod, Michael Hennigan and Ralph Wegis settled Mortensen into bankruptcy. Mortensen subsequently defaulted on 17 government insured real estate loans.
13. When Mortensen wanted to cancel the settlement he asked Bruce MacLeod if it was binding, Bruce McLeod lied and stated that it could not be cancelled. This was a lie that cost Mortensen dearly.
14. MacLeod let the case languish for seven years. At the time of mediation no “at issue” or trial ready motions had been filed with the court.
15. MacLeod was ordered by Mortensen to remove the case from protective order and unseal it. He refused on ten occasions. This was a fiduciary failure that weakened the value of Mortensen’s case.
16. Cliff Mortensen informed Bruce MacLeod of his insolvency and still he let the case languish for four years. This benefitted Trans Union and Acxiom and forced Mortensen to settle the case which was a bankrupt settlement. Mortensen was not made whole.
17. Bruce MacLeod failed to notify the Securities and Exchange Commission (SEC) of insider trading worth hundreds of millions of dollars by Trans Union and Acxiom.
XIX. SUMMARY
Bruce MacLeod and Michael Hennigan placed their own professional relationships with DLA Piper above Mortensen’s interests. They deliberately stalled and cloaked the case in secrecy to Mortensen’s detriment and to Trans Union’s and Acxiom’s benefit while they were working at the same time on the huge international Parmalat bankruptcy representing John Hancock Life Insurance Company and the Roman Catholic Church cases with DLA Piper.
Their actions caused Mortensen and his family great financial and emotional harm.
The damage to Mortensen’s credit is ongoing, yet Trans Union’s credit rating is unblemished after defrauding over one hundred Trans Union credit bureau franchisees out of billions of dollars. Their actions depleted Mortensen’s substantial net worth.
Messrs. MacLeod and Hennigan can be reached presently at The Law Firm of McKool Smith and Hennigan, 865 Figueroa St., Los Angeles, CA 90017, 213.694.1200. They are partners there. Mr. Hennigan can also be reached also at Quail H Farms, 5301 Robin Avenue, Livingston, CA 95334, 209.394.8001
Certified as true and correct, January22, 2013
Cliff Mortensen
933 W. Alisal St.
Salinas, CA 93901
831.320.3565
Cliff@2020credit.com
Pat Mortensen
This complaint has been turned over to Sean MKessy, Head of theWhistleblower section of the Securities and Exchange Commission as well as the Internal Revenue Service.