Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty
 

Court Documents Reveal Municipal Bond Bid-Rigging Scheme

November 25, 2010 by  

Court Documents Reveal Municipal Bond Bid-Rigging SchemeBanking executives from some of the country’s largest banks rigged bids and paid kickbacks to win deals involving municipal bond sales, a scheme that may have cost taxpayers as much as $1 billion and is the biggest criminal conspiracy in the history of the 198-year-old municipal finance market, according to documents filed in a New York Federal court.

Details of the criminal conspiracy are being reported in an upcoming issue of Bloomberg Markets Magazine.

According to Bloomberg, Douglas Campbell, once one of Bank of America Corporation’s most successful derivatives salesmen, described the conspiracy as he entered his guilty plea in a Manhattan Federal Courtroom in September.

Bloomberg reports that Campbell told U.S. District Judge William Pauley, “I had conversations prior to the bid with the broker about who the bidders were going to be and who was going to win or lose.” He admitted paying kickbacks to win deals to CDR Financial Products Inc., a Los Angeles-based firm that had been hired by municipalities to run auctions for investment contracts. He’s one of seven bankers and brokers who have pleaded guilty to conspiracy and fraud charges.

Court documents show that bankers routinely rigged bids and lied about their crimes between 1998 and 2005. Following every transaction, the bankers fraudulently signed a pledge certifying that they had adhered to U.S. Treasury Department rules barring them from seeing other bids.

The bankers attempted to cover up their scheme by using personal identification numbers to reach bidding agents directly on their BlackBerrys and routinely used personal mobile phones instead of the bank’s tape-recorded telephone lines, Bloomberg reports.

“When I participated in this scheme, I knew it was illegal,” Mark Zaino, a former banker with UBS AG, told a U.S. District Court judge in New York as he entered a guilty plea in May.

Special To Personal Liberty

You Sound Off! is written by our readers and appears the last Wednesday of each month. If you would like to submit an article or letter to the editor for consideration for You Sound Off!, send it to yousoundoff@personalliberty.com by the Friday before the last Wednesday of the month. To be considered, a submission should be 750 words or less and must include the writer's name, address and a telephone number. Only the writer's name will be published. Anonymous submissions will not be considered.

Facebook Conversations

Join the Discussion:
View Comments to “Court Documents Reveal Municipal Bond Bid-Rigging Scheme”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at newstips@personalliberty.com

Bottom
close[X]

Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to PersonalLiberty.com,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.