If this one doesn't make your blood boil, there's something wrong with you.
I would love to tell you that Angelo Mozillo is going to do some time behind all the sub-prime chicanery that Countrywide pulled, but I can't. You see, prosecuting a guy that rich and powerful is just too hard, the SEC whines. Likewise, we'll probably never see a TBTF bank CEO do the perp walk, despite demonstrable evidence of fraud in dozens of cases.
But all is not lost. You can sleep a little easier tonight knowing that someone has been punished for the sub-prime mess, and that someone is Charlie Engle. What? You've never heard of Charlie Engle? That's because he's not a bank CEO or a crooked loan originator. Charlie Engle's a long distance runner.
Wait...what?
You see, Charlie's crime was doing what millions of other people were doing in the mid-2000's. He speculated in real estate and made some money on the bubble. Specifically, he took out two stated income "Liar Loans" in 2005 and 2006 respectively.
In 2008, Matt Damon released a movie about Charlie. But the movie wasn't about Charlie's real estate investing acumen, it was about Charlie's odyssey of becoming the first man to run across the Sahara Desert. For Charlie's participation in the movie he was paid $30,000.
The movie caught the attention of IRS special agent Robert Nordlander, who wondered to himself how one goes about training for such a thing with a full time job. Because IRS special agents have nothing better to do than wonder about such things.
The film, “Running the Sahara,” was released in the fall of 2008. Eventually, it caught the attention of Robert W. Nordlander, a special agent for the Internal Revenue Service. As Mr. Nordlander later told the grand jury, “Being the special agent that I am, I was wondering, how does a guy train for this because most people have to work from nine to five and it’s very difficult to train for this part-time.” (He also told the grand jurors that sometimes, when he sees somebody driving a Ferrari, he’ll check to see if they make enough money to afford it. When I called Mr. Nordlander and others at the I.R.S. to ask whether this was an appropriate way to choose subjects for criminal tax investigations, my questions were met with a stone wall of silence.)
Nordlander was convinced Charlie was a tax cheat, so he put him under surveillance. He even dug through Charlie's garbage. When that turned up nothing more than the fact that Charlie lived within his means, Nordlander went to his superiors to get a "honey trap" authorized.
An attractive female IRS agent targeted Charlie, who eventually told her he'd had a couple liar loans on properties he owned and that helped finance his training years before. She was wearing a wire. And now Charlie's doing 21 months for mortgage fraud.
As if that's not bad enough, it appears Charlie didn't even lie on his liar's loans. He claimed he made $15,000 a month on the first loan when in fact he'd earned $180,000 in the previous tax year. So he did make $15,000 a month - just not from an employer and not on a weekly paycheck.
The second loan showed his income at $32,500 a month, and Charlie claims to have never even seen - and certainly never signed - those loan documents. Court ordered handwriting analysis determined that the docs were probably forged (by the originator, no doubt).
Mr. Engle claims that he never saw that $32,500 claim and never signed the papers. Indeed, a handwriting analysis conducted by the government raised the distinct possibility that Mr. Engle’s signature and his initials in several places in the mortgage documents had been forged. As it happens, Mr. Engle’s broker for that loan, John J. Hellman, recently pleaded guilty to mortgage fraud for playing fast and loose with a number of mortgage applications. Mr. Hellman testified in court that Mr. Engle had signed the mortgage application. Early this week, Mr. Hellman received a reduced sentence of 10 months, less than half of Mr. Engle’s sentence, in no small part because of his willingness to testify against Mr. Engle.
This is a case of predatory IRS prosecution, cut and dried. And it just goes to show you, if you're rich and powerful you don't have to answer for your crimes. But if you make yourself an easy target, or some pencilneck in an IRS office somewhere decides to make you an easy target, you're going down.
This is a true miscarriage of justice, and I hope all those involved get what's coming to them.
Oh my god that's infuriating. Court-ordered evidence proved that the handwriting didn't match and he's still going to jail? Absurd.
Isn't this the point of a jury system? So that a group of 12 people can say to the judge, "fuck that, we're not sending this guy to jail." This is also why I am opposed to voir dire - it guarantees docile juries that follow the judge's instructions and come back with stupid verdicts like this (not to mention that it is unconstitutional). And yes, i know juries can be a double edged sword biased against the defendant as easily as against the prosecution, but it'd be nice if someone capable of intelligent thought and who actually read the news were allowed on from time to time.
So he has to pay the bank that forged his signature on the mortgage application? What bullshit. I would be willing to donate to a defense fund so he can get a good lawyer.
The IRS has attractive female secret agents who spy on guys allegedly committing fraud? I'm in.
Great post Eddie. Mr Nordlander needs to be fired and the judge should be removed from the bench for allowing such a travesty to occur in his court. How the judge doesn't throw out that case when it is evident that there is no wrong doing is beyond me.
How does a jury of 12 other Americans convict this guy?
this shit is ridiculous. And 21 months seems a ridiculously long time as well.
He didn't know she was an agent, right? She went undercover, right?
Yeah. Evidently he thought he was just chatting up some random in a bar or something.
That's what I figured... and let me say wow, what bullshit. For the most part, the public sector is such a joke....
So now the IRS has found a way to turn our sex drives against us.
This is sad shit. But it's more icing. Brad Birkenfeld was the cake. Anybody who thinks Wall Street's not a part of the government complex after that one is chugging the Kool Aid.
Seems like while everyone is borderline ape-shit over the "waste of tax dollars" this chuckleheaded Boardwalk Empire wannabe IRS agent contributed to, only Midas mentions the real story, the one that emerges between the lines.
Shit like this happens everyday people in the justicesystem. Yes it is unjustifiable, but even more so is, as presciently pointed out by Midas, that the "Wall St. industrial complex" does not leave room for those with actual culpability to be held accountable. Honestly fuck the $.01 x-10^15 in tax expenditure, what you should be more concerned about is that the Wall St. / Pennsylvania Ave love affair that so zealously fawns over the "free market" bullshit some of the kool aid drinking, Kudlow look alike, "liquidity providers" (ha), can't stop yacking about, are serving ends far beyond those you anticipate, and no (D) or (R) gonna change a thing about that my Teabagging friends.
Takes a massive amount of balls to do what Birkenfeld did - not ashamed to say I wouldn't dare follow suit after what happened to him. And if I may slander my own environment for a moment, that is royally fucked up system we've got going for ourselves here.
What a waste of tax dollars. The IRS didn't recover a dime of revenue.
I'm furious after reading this story. It speaks volumes about the existing (and growing) problems with our government.
The fact that an agent can open an investigation just for the fuck of it and then burn through the taxpayers' resources because someone's car is shiny and fast is absurd. And who is he to decide if someone can afford XYZ asset in the first place?
In a perfect world, the agent would lose his job for abusing his power like this.
On a side note, I'd be interested to see a psychological profile of the type of person who chooses to become an IRS agent. My guess would be someone who was bullied as a child, last picked for pickup bball games, etc...
"He also told the grand jurors that sometimes, when he sees somebody driving a Ferrari, he’ll check to see if they make enough money to afford it."
WTF?
Whatever...I'm never giving up my used Honda.
All the future analysts in the $60k car thread better take notice!
As a side, maybe it's early, but I don't exactly follow - the $15k/month loan turned out to be true because he had made $180k in the previous year, just not on a monthly basis (is the discrepancy here claiming monthly income when it was annual?) and the other loan turned out to be a forgery. So he did nothing wrong, apparently, but he admitted to taking out "liar loans?"
Either way, it's always lame when somebody is caught like this ("special" agent has nothing better to do than be jealous of somebody's ability to train for a super marathon, decides to investigate [sidebar: doesn't the 4th amendment protect against this?]) but if he broke the law then he broke the law...
^^^ Yeah I agree. People who take jobs like that are losery self-righteous assholes on power trips.
This is why people are terrified of the IRS. Even when you try to do things right they can screw you over royally over the tiniest things.
I read this article in the NYT last week, and it just made me ask "...why?". Who is better off now that this guy is behind bars?
Nobody was harmed here. No party is seeking vengeance. This man is clearly not a danger to society; he was running for charity for gods sake. The state did not stand to make any money from prosecuting him. For that matter, the state didn't lose money in the first place: he was reporting his income to the IRS accurately. And now we are paying to feed and cloth him for 21 months.
We need a sanity check somewhere in the justice system. This reminds me of In banking, if your model says a company is worth 2 trillion, you know you messed up some formula. A rational person would go back and catch their error. But the government not only plowed ahead, but successfully pitched and executed a transaction based on that valuation.
Juries theoretically serve this purpose, but can be to easily swayed by overzealous prosecutors. Look at http://en.wikipedia.org/wiki/Cameron_Willingham . Sentenced to death, despite all evidence pointing to innocence. The problem almost comes down to incentives for prosecutors. Incentivize convictions, and you get this. Don't implement incentives, you get unmotivated bureaucrats. Maybe a conviction bonus, but severe penalties if the conviction is overturned on appeal? I am no lawyer, so I can't really say.
And the worst part? That auditor probably thinks he did a good thing. Sickening.
Knowing how driven this guy is, he will hopefully turn this into a socail commentary: the system sucks.
You're totally right: the public good is the WHOLE POINT of the public sector, and not enforcing the letter of the rules! I almost went to work for the IRS years ago when I had no idea what I wanted to do, and they are just piddly little tools that are jealous of how much money other people make. Personally, if I was this guy, I'd hunt down that agent.........[quote=The film, “Running the Sahara,” was released in the fall of 2008. Eventually, it caught the attention of Robert W. Nordlander, a special agent for the Internal Revenue Service. As Mr. Nordlander later told the grand jury, “Being the special agent that I am, I was wondering, how does a guy train for this because most people have to work from nine to five and it’s very difficult to train for this part-time.” (He also told the grand jurors that sometimes, when he sees somebody driving a Ferrari, he’ll check to see if they make enough money to afford it. .)[/quote]
Anybody else shocked that they do not have a more systematic approach to this stuff? Seems highly uneffiecient and like a complete waste of resources.
Nope. That's the nature of the beast and it shouldn't surprise anyone, in my opinion. The only reason it surprises people is because so many people have a romantic and unrealistic view of the public sector.
^^ I kinda think he did it...
PS, i was talking about WestCoastRainmaker's post..
This legitimately breaks my heart. How fucked up is our system that dudes like Angelo Mozillo are off scot-free with hundreds of millions in the bank while this shit happens?
This guy got what he deserved. I mean seriously, you ran across a fucking desert. Buy a car, you clearly make enough to afford it. He was trying to be Moses and the Lord was watching. Karma is a bitch marathon man
Silver banana for you, sir. Hilarious...
I'd refrain from believing everything on that article face value. I'd expect the father of the defendant to be somewhat biased. Or this could just be me hoping that our justice system is not beyond incompetence.
This just shows how screwed up the system is.
Does the IRS issue reports detailing the cost and manpower for this investigation? Governmnet agency work at its finest.
That is funny IRS agents read news stories like that and then looks to see if someone is paying taxes - what a miserable existence.
I wonder if they are looking into this guy. Arizona coach who was profiled in the WSJ as a human garbage can - will eat anything for a little cash. Quotes him as getting paid $2000 to eat this, $3000 to eat that - all cash of course.
http://online.wsj.com/article/SB100014240527487046047045762208333524728…
Reminds of the guy from "I Now Pronounce You Chuck & Larry" that went through Sandler & James' garbage to disprove their alleged "gay" marriage.
Sadly, having twelve of your supposed "peers" deciding your fate doesn't work too often. I served on a jury one time, slander/defamation lawsuit, where ten of the twelve jurors, my peers, wanted to give the plaintiff $15MM of tax payer dollars. Three expert witnesses testified that the plaintiff was probably owed ~$1MM for lost wages. He ended up receiving $600,000, but only because me and one other competent person were in the room to argue tooth and nail with these knuckleheads. It was like trying to talk ten people off of a ledge who were holdings hands.
FO->MO->BO->Mail Room->Sanitation Ops->IRS Agent?
That's the fucked up thing about it. Juries know that one day it could easily be them who could win the judicial lottery, so of course they're going scratch each others' backs.
I had the privilege of meeting Charlie Engle back in 2008. I was writing an article on him for my college newspaper about his Sahara run and his charity. Not to get too off topic, but it was a great organization - they taught people in Africa who don't have access to clean drinking water how to build and maintain clean water wells. Give a man a fish vs. teach a man to fish, that kind thing. I hope everything works out for him, sounds like he's making the most of his prison sentence.
I guess I will never understand why people get charged and others, who are really guilty of bigger crimes do not. I think if he did commit fraud then he should go to jail but if he never signed those papers then it would seem that there was no crime. This is just so sad.
Such a travesty... Even worse than Mozillo, guys like Kerry Killinger walk after spurning thousands of people on adjustable ARM's
“Being the special agent that I am, I was wondering, how does a guy train for this because most people have to work from nine to five and it’s very difficult to train for this part-time.”
Yeah...somehow I don't believe this "I just so happened to be on the corner of 14th and 6th when someone dropped a nickel and as I bent down to pick it up I noticed the heel of my shoe wasn't quite right so, being the special a-hole that I am, I went to the local cobbler...but the front door was locked, and I remember thinking "how strange," because the lights were on inside, so I rounded the corner and went into the alley to try to enter the store through the back...and just then a text came in and when I checked my phone I happened to see that the time was 3:16 and I remember it exactly because that happens to be my favorite passage in the book of luke...and that's when I saw it all go down" type logic. We all know you already somehow knew to take a look-see in that alley at exactly 3:16 pm.
^ hahaha
Special agent? He's not in the fucking CIA: he's a pencil pushing auditor. I say we track him down and kick his ass in the alley....anyone have a problem with this?
This guy came and visited the Merrill Lynch office I interned at to talk about his inspiring story. I wasn't able to go but I wonder what else they talked about...
Wow. That is ridiculous, especially if the facts in the article are true. I work in mortgages....have been for 10 years. When the "liar" loans were running rampant, it was viewed by some as an alternative approval method...and people paid higher rates/fees for the privilege. It was very popular with people who were self employed, alternative/non employment income sources, etc...b/c documenting the income could/would have been a pain in the ass for the borrower.
Also I wonder if the courts are going to go after the originator, who forged the signatures on the 2nd loan.
Ipsam enim omnis et sit quis. Id optio sequi reiciendis enim ut vero quisquam.
Repudiandae mollitia adipisci ut a et. Et enim ut et ipsam velit ullam at. Ipsum reprehenderit eum est animi. Quod aut numquam facere velit quis voluptate dolor.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Est eum quaerat dolor necessitatibus in. Expedita omnis dolorem accusantium id. Commodi quaerat quo labore.