Bailout Cop Uncovers 20 TARP Crimes: Fraud, Price-Fixing, Kickback Schemes and More!

April 21, 2009

(ChattahBox)—Bailout cop, Inspector General Neil Barofsky, released a blistering 250-page report today, indicating he is pursuing at least 20 TARP criminal investigations for possible fraud, insider trading, tax violations, collusion, kick-back schemes and even, money laundering. The report also indicated it would be conducting at least a dozen financial audits of troubled banks and other institutions receiving bailout funds.

Barofsky was appointed by former President Bush to oversee how the government’s money was spent in the bailout program. Barofsky is a former New York Assistant U.S. Attorney, known for his toughness and willingness to prosecute white-collar securities-fraud criminals. He made headlines as a prosecutor, when he made former Refco chairman Phillip Bennett cry on the stand in an accounting-fraud case against company executives last year.

Barofsky says his report was released to uphold transparency, inform the public and government officials to potential TARP fraud risks and make appropriate recommendations. He made clear he is not on a witch hunt and that institutions and individuals who play by the rules have nothing to fear from his team of 35 investigators, expected to swell to 150 when they move to new offices next to Treasury staffers.

Barofsky says the massive size and complexity of the $750 billion bailout program leaves it vulnerable to scammers to run rampant with various fraud schemes, bilking the government and taxpayers of billions of dollars.

Barofsky reserved his strongest criticism for the Term Asset-Backed Securities Loan Facility or TALF, a program to buy up toxic securities from banks and bundles of bad mortgages and loans, saying it’s the most vulnerable to fraud, leaving all the risk to the taxpayers with none to the financial institutions.

Barofsky’s report called for completely shutting down the TALF program before it becomes committed to making purchases. The report indicates the bundled mortgage transactions are of particular concern, ripe for massive fraud and collusion by buyers to manipulate prices and extract kickbacks.

The Treasury Department’s bailout chief, Neel Kashkari, is considering Barofsky’s recommendations.



4 Responses to “Bailout Cop Uncovers 20 TARP Crimes: Fraud, Price-Fixing, Kickback Schemes and More!”

  1. Old Man Dotes on April 21st, 2009 4:37 pm

    Let the US Government buy *all* outstanding mortgages at the current principal value and forbid banking institutions to make new mortgage loans without direct approval of the Treasury. Freeze interest at the prime rate. Mortgage holders could then pay the Government as they current;y pay banks, but without the amzing amount of pocket-lining that goes on in the banks today.

    Yeah, I hate bank presidents and board members. Is it that obvious? Greedy pigs.

  2. pamuckraker on April 22nd, 2009 2:13 am

    Here is more information on the Morgan Keegan fraud case:

  3. Sue on April 23rd, 2009 9:16 pm

    Thanks for the Great Comments pamuckraker and Old Man Dotes. Yes, the Tarp program sure needs some fine tuning, but I am hopeful things will all shake out, leaving us with a healthier financial system than we had previously.

    Thanks for all your recent comments Old Man Dotes!


  4. Homes Mortgage Refinance Guide on June 13th, 2009 7:25 pm

    […] Bailout Cop Uncovers 20 TARP Crimes: Fraud, Price-Fixing, Kickback … […]

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