As reported in today’s New York Times, convicted Florida mortgage fraudster Lee Farkas related this anecdote about doing business with his commercial banker, Catherine Kissick of Colonial Bank:
“One day she was at the McDonald’s drive-in, and I asked her for a hundred — which meant a hundred million — more, and she was in the middle of ordering a Happy Meal. She said, ‘A hundred?’ I said, ‘Yeah.’ She said, ‘O.K., fine. Hold on.’ “She called Colonial, and we had a hundred million before she paid for her Happy Meal.”
You and I and other U.S. taxpayers are picking up the tab; Colonial Bank subsequently failed. As reported by The Times, Farkas once boasted to co-conspirators that he “could rob a bank with a pencil.” Not a single payment was made on some of the loans that he peddled to Fannie Mae. He was convicted this week of 14 counts of fraud and conspiracy in what became a $2.9 billion scandal.
With the $20 million he took out of the fraud, Farkas bought classic cars and a private jet. He likely will be imprisoned for life. Ms. Kissick has also been convicted and awaits sentencing.
They are rare birds. One of the truly remarkable things about the Panic of 2008 that cold-cocked the global economy and that cost taxpayers around the world trillions in apparent wealth is how few culprits have been marched off to jail. Farkas and Kissick are relative small fry. Too-big-to-fail Wall Street investment banks are bigger than ever. No one in this “heads I win, tails you lose” cohort has even been charged.