US financial regulators charged a father and son in Utah state with operating a $220 million property investment Ponzi scheme which targeted fellow members of the Mormon church.

The Securities and Exchange Commission charged Wendell Jacobson and his son Allen Jacobson, of Fountain Green in central Utah, with selling shares in their purported real estate business and using the funds from some investors to pay returns promised to others.

It said that since 2008 the two had solicited investments into their business of ostensibly buying, rehabilitating and then renting out properties.

They appeared to use the memberships in the Utah-based Church of Jesus Christ of Latter-Day Saints — the Mormon church — “to make connections and win over the trust of prospective investors,” the SEC said.

Securities in their businesses were sold to investors without registering with the SEC as required by law.

Read More: AP via Google News

The chief executive officer of National Lampoon Inc., the comedy brand behind “Animal House” and the “Vacation” movie franchise, was arrested early Wednesday in West Hollywood in connection with an alleged $200-million Ponzi scheme, federal authorities said.

Timothy Durham, 48, is accused in a federal grand jury indictment of defrauding investors through his loan company and using the money to support expensive homes and cars, a 100-foot yacht and travel on a personal jet.

The arrest and indictment come two years after the FBI raided two of Durham’s businesses — Obsidian Enterprises of Indianapolis and Fair Financial of Akron, Ohio. Also named in the 23-page grand jury indictment were business associates James F. Cochran and Rick D. Snow.

All three each face 12 counts in connection with securities and wire fraud. Durham, who could not immediately be reached for comment, is scheduled to appear Wednesday afternoon in U.S. District Court in Los Angeles…

More on Mr. Durham’s journey from Animal House to the Big House in the LA Times.

…one evening a few weeks ago, my home phone rang. “You have a collect call from Bernard Madoff, an inmate at a federal prison,” a recorded message announced. Out of nowhere, there was that accent, familiar to anyone who’s visited Queens. Madoff apologized for calling collect. “I don’t have that much money in my commissary account,” he told me, before starting on a remarkable conversation that would stretch to several hours in more than a dozen phone calls. This being Bernie Madoff, in dollar terms the greatest criminal in history, I didn’t know what to believe. But I listened…

For anyone interested in the psychology of the man made famous for his long-running Ponzi scheme, it’s a must read story.

Bernard Madoff

Thank you, Bernie, for breaking your silence – even if you are still clinging to that cover-up mode you adopted since you took the entirety of the blame for your crimes.

What is clear is that ripping off the rich is punished far more severely than ripping off the poor. The lengthy sentence you were given spared countless other greedsters and goniffs from facing the music – what music there is.

In an interview – with a reporter from The New York Times who is writing a book to cash in on a man who has already cashed out – we learn, in the vaguest terms, that Mr M believes the banks he did his crooked business with “should have known” his figures did not figure. Keeping with the deceit that has served him well over the years, he names no names.

That said, how right he may be. There were many who should have known and done something about it. The Securities and Exchange Commission (SEC) and other regulators for one. Perhaps The New York Times for another. Remember, it was Madoff’s confession to his sons that started him on his way to his new 12′ x 12′ home from home – in a federal correctional institute, where he may dream of his seized penthouse, homes and yachts – rather than any press expose.

For years, he went undetected by business journalists, who knew – or should have known – what he was up to. There are even questions about the speed with which he was sentenced, preventing him from being tried - a process which, through diligent cross-examination, would have brought us more information on the details of his dirty deals.

Do not believe all you read

Even The New York Times interview is being disputed, reports the New York Post: “The trustee representing thousands of Bernard Madoff’s victims disputed a report that he personally grilled the Ponzi monster in prison.”

“There has been no direct communication between them,” said David Sheehan, the chief counsel for the court-appointed trustee, Irving Picard, after The New York Times reported that Picard and Madoff had met over the summer.

“The Times later changed a quote from Madoff and altered some text online that had implied Picard personally visited Bernie in the Butner, NC, lockup where he is serving a 150-year sentence. Picard did not dispute that his legal team met with Madoff.”

Madoff is also still not coming clean about the web of alliances he had internationally, as well as in New York. We live in a global economy after all. We now know of Swiss and Austrian connections - but what about Israel, where this ingratiating handler was well known for his connections with Jewish philanthropists and institutions? So far, that story has yet to be told.

At the same time, the people investigating Madoff are making a small fortune. According to the Financial Times: “The army of lawyers and consultants helping to recover funds from Bernard Madoff’s $19.6bn fraud stand to earn more than $1.3bn in fees, according to new figures that detail the cost of liquidating the huge Ponzi scheme.”

The comments of readers to The Times appear to be more insightful than the paper’s own reports. Here is one from Texas: “I actually, sort of, feel sorry for this man. He was just doing what many investment firms were doing at the same time. He has been imprisoned as a scapegoat – yet many people since then – and to this day – are doing the same thing. Where are the indictments against the thousands of other people who did the same thing - and knowingly led this country into financial disaster?”

Banks close ranks

The best reporting on this subject is not in the mainstream press but in a music magazine, Rolling Stone, where Matt Taibbi investigates why the whole of Wall Street is not in jail: “Financial crooks brought down the world’s economy - but the feds are doing more to protect them than to prosecute them,” he charges.

Madoff also believes the banks who serviced him did not want to know about his Ponzi scheme which, unfortunately, is probably true – and an attitude coming not just from the banks.

The Times report added: “He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their ‘willful blindness’ and their failure to examine discrepancies between his regulatory filings and other information available to them.

“‘They had to know,’ Mr Madoff said. ‘But the attitude was sort of: “If you’re doing something wrong, we don’t want to know.”‘”

Yves Smith of NakedCapitalism.com quips: “This sounds credible – but it also seems more than a tad self-serving.”

Andrew Leonard asks in Salon: “Should we trust him? After all, if there is one thing we know about Bernie Madoff, it is that he is one hell of a liar. But as evidence emerges that bank executives were exchanging emails wondering about Madoff’s amazing investment record, the possibility that the banks were purposefully looking the other way is not inconceivable.”

The truth is that many of us still do not really want to know – because, if we did, we would have to do something about it.

By their actions, both Democrats and Republicans clearly appear to prefer the most simplistic understandings – or misunderstandings.

The Financial Crisis Inquiry Commission (FCIC), like the 9/11 and Warren Commissions before it, avoided key issues. The FCIC inquiry did not call for a criminal indictment of wrongdoers. While informative, its report was ultimately a dud – telling us mostly what we knew, although there were some disclosures that our tepid press still missed.

Now the Republicans want to water down the regulations on derivatives in the Dodd-Frank financial ‘reform’ legislation, claiming they will lead to a loss of jobs. This is predictable: Every effort to defend big business is always couched in terms of helping the public.

The New York Times reported: “Representative Stephen Lynch, Democrat of Massachusetts, warned: ‘You think regulation is costly? How about the $7trillion we just lost from not regulating the derivatives markets?’”

There was no response from his colleagues.

So who will do anything about it?

The political right prefers to change the subject, while the left does not seem to have the time or energy to make economic justice its principal concern – even as polls show the economy is the number one problem for most in the US.

Progressives should hang their heads in shame at the minimal amount of activism taking place against the banks and the escalating numbers of foreclosures. Homes and hope are being stolen from people for whom the term “depression” now has a personal, as well as economic, meaning.

The other day, economist Jeff Sachs - who has a lot of atoning to do for his own misguided, destructive economic advice to Russia after the fall of the Soviet Union – warned that little is being done about economic inequity and the growing ranks of the poor in the US. He asks if people who run things in the US want “another Egypt”. He is a policy wonk, not an activist – and likely fears the idea.

Many activists say they want to emulate the Egyptians, but who will organise anything as effective – even in a land that used to be known for people’s movements – to raise hell? In Egypt, young people used the internet to organise and mobilise for change. In the US, the internet seems to function more as an escape valve, consuming hours of our time and giving us another way to talk to each other – and ventilate against the government. Social media here seems to be more for socialising.

The government supports internet freedom abroad – but restricts it and spies on it at home. Obama has already supported a law allowing him to shut it down here in a national emergency.

The passivity of the public is one result of the inundation by middle-of-the-road media and effective information deprivation.

As Noam Chomsky puts it: “The population in the United States is angry, frustrated and full of fear and irrational hatreds. And the folks not far from you on Wall Street are just doing fine. They’re the ones who created the current crisis. They’re the ones who were called upon to deal with it. They’re coming out stronger and richer than ever. But everything’s fine – as long as the population is passive.”

That is our problem, Bernie. Even if the people want to know, it is not that easy to find out. Let us thank the media and our government for that.

Filmmaker and News Dissector Danny Schechter edits Mediachannel.org.

For more on his film Plunder: The Crime of Our Time and companion book The Crime Of Our Time: Why Wall Street Is Not Too Big To Jail, visit plunderthecrimeofourtime.com.

For what we’ve learned in the last few years as one scandal after another spilled onto the front pages is that the bubble economies of the last two decades were not merely monstrous Ponzi schemes that destroyed trillions in wealth while making a small handful of people rich. They were also a profound expression of the fundamentally criminal nature of our political system, in which state power/largess and the private pursuit of (mostly short-term) profit were brilliantly fused in a kind of ongoing theft scheme that sought to instant-cannibalize all the wealth America had stored up during its postwar glory, in the process keeping politicians in office and bankers in beach homes while continually moving the increasingly inevitable disaster to the future.

That is a terrible story and it is also sort of a taboo story, since we don’t really have a system of media now that is willing or even able to digest that dark and complicated truth. Instead, our media — which has always been at best an inadvertent accomplice to these messes — is basically set up to take every revelation about the underlying truth and split it down the middle, feeding half to one side of the political spectrum and one half to the other, where the actual point is then burned up in the useless smoke of a blame game.

The essentially complicit nature of the two ruling political parties was in this way covered up for decades, as the crimes of the Democrats were greedily consumed as entertainment by the Limbaugh crowd while the crimes of the Bushies became hot-selling t-shirts and bumper stickers for the Air America listenership. The abiding mutual hatred the red/blue groups shared consistently prevented any kind of collective realization about the structure of the overall scheme.

What worries me is that we’re now reverting to the same old pattern with the financial crisis story. We’re starting to see fault lines develop, where one side blames the government while another side blames Wall Street for the messes of the last two decades. The side blaming the government tends to belong to the free-marketeer class and divines in safety-net purveyors like the GSEs and in the Fed’s money-printing fundamental corruptions of the capitalist ideal, while the side blaming the bankers tends to belong to the left-liberal tradition that focuses on greed and seeming absence of community conscience among the CEO class as primary corruptors of the social contract.

Read More of Matt Taibbi’s article on True/Slant

from AP:

PALM BEACH, Fla. — Jeffry Picower, a philanthropist accused of profiting more than $7 billion from the investment schemes of his longtime friend Bernard Madoff, was found at the bottom of the pool at his oceanside mansion and died Sunday, police said. He was 67.

Picower’s wife, Barbara, discovered his body and pulled him from the water with help from a housekeeper, authorities said. He was pronounced dead at Good Samaritan Medical Center at about 1:30 p.m.

Palm Beach police are investigating the death as a drowning, but have not ruled out anything on the cause of death.