Tuesday, October 20, 2009
The Plank in the DOJ's Eye
"A federal grand jury accused the former chief executive of a defunct soft-drink-maker and four others connected to the company of perpetrating an $806 million bank fraud, much of which allegedly went to the ex-CEO and his family. Gregory Podlucky, 48 years old, of Ligonier, Pa., provided financial institutions and equipment supplies 'with dramatically false financal statements' to get equipment leases and loans for Latrobe, Pa.-based Le-Nature's Inc., said US Attorney Mary Beth Buchanan [MBB]", WSJ, 29 September 2009, link: http://online.wsj.com/article/SB125418410762448011.html.
What's wrong with this story? Not Podlucky's being indicted, assuming MBB is correct. But that executives of America's largest banks haven't also been indicted for having their banks prepare and disseminate false financial statements. If you commit fraud against a bank you get indicted; if you commit fraud for a bank, the bank gets bailed out. What a country. Even if Podlucky did everything he's accused of, how different is that from Wall Street's current "heads we get bonuses, tails the public pays" compensation system? I wonder if MBB, 46, is being groomed to become the new Mary Jo White, 61? Compare this to Citigroup's $800 million Old Lane purchase, my 24 June 2008 post: http://skepticaltexascpa.blogspot.com/2008/06/citis-800-million-man.html.