Feds Closing in on AIG Financial Products Executive for Criminal Charges

Well, a small piece of good news from ABC:

The FBI and federal prosecutors are reportedly closing in on the AIG executive whose suspect investments cost the insurance giant hundreds of billions of dollars. The government is investigating whether or not 54-year old Brooklyn-native Joseph Cassano committed criminal fraud in virtually bankrupting the company

Not as exciting as Machine gun Kelly and shoot outs from the 1930's, instead assuredly the FBI and others are pouring over spread sheets, bank accounts, wire transfers and internal memos, but the idea of kidnapping an entire industry instead of a family is far more devestating!

Here's the real scam:

Cassano Kept Transactions Out of Sight of Regulators

Hunt 'em Down - 19 States Launch Fraud Probe into AIG Financial Products Unit - Focus on Bonuses

Get out the dogs, sic' those bastards! Hang 'em high! The public lynching continues on AIG bonuses with this latest action: 19 States Launch Fraud Probe:

To ensure the investing public, as was promised, that money received by the company is being utilized to improve the financial welfare of the company, not to pad the pockets of the same individuals who led to the financial crisis in the first place.

The actual letter is here.

While I am thrilled there is increasing focus on derivatives, structured finance, I'm not so sure focusing in on individuals will get to the bottom of this Ponzi scheme. We have structured financial products all over, everyone was in on this game, not just AIG.

Obama's CIO Vivek Kundra Previous Close Employees Arrested for Fraud, Bribery

This is one hell of a story. One week after President Obama announced his new CIO of the United States, the FBI raided the very office where Kundra just held the position of CTO and arrested Kundra's former CSO and another former employee, for massive fraud and bribes.

D.C.'s top IT security official charged with bribery

Arrested this morning was Yusuf Acar, who currently is the District of Columbia's acting chief security officer; police said they found $70,000 in cash in his Washington home. Acar's annual salary is $127,468, according to court documents.

The second suspect arraigned on bribery charges is Sushil Bansal, CEO and founder of Advanced Integrated Technologies Corp. (AITC), a Washington-based outsourcing vendor that has won a number of contracts from the district's IT department.

Just Because it's Math Does it Mean No Criminal Charges? - AIG run like a Scam - New York Times

Just because it's one division and they covered it all up with excuses like complex math, or structured finance does it make it less of a scam and a fraud?

The New York Times article Propping Up a House of Cards has gone a little more in depth on precisely what was going on inside AIG and why (supposedly) it couldn't fail (Joe Nocera Journalist).

Indian Outsoucer Satyam Cooks the Books, Enron Level of Fraud

India has been importing U.S. jobs for some time. It appears they imported another American corporate problem, fraud.

Indian offshore outsourcer, Satyam Computer Services, admits to falsifying books:

The chairman of India’s Satyam Computer Services resigned on Wednesday after confessing to fixing the IT outsourcing company’s books for the past “several” years, the country’s first major fraud case to emerge following the global financial crisis.

In a letter to Satyam’s board, B Ramalinga Raju admitted wildly inflating Satyam’s margins to paint a picture of good performance and retain his management position, in one of the worst scams to have hit India’s outsourcing sector.

How bad is it? Looks like a reported 24% profit margin is actually 3%.

House Congressional Hearing on How SEC Missed Matloff

More oh gee, how did this happen? stuff on capital hill.

The New York Times did a live blog on the hearing and it's basically a true waste of time, oh, more audits, obviously a $50 Billion dollar Ponzi scheme just fell through the cracks

The real meat will be:

The SEC was warned on several occasions by Boston investment professional Harry Markopolos that Madoff's firm probably represented the world's largest Ponzi scheme. In such a scheme, some investors are paid with other investors' money. Allegedly using such a technique, Madoff was able to produce double-digit returns to investors year after year.