It may be time to ready those orange jumpsuits after all. Although a settlement is already being worked out between banks and state attorneys general over the institutions' failures to follow proper procedures in processing foreclosures, money and concessions might not be enough. A recent segment on 60 Minutes certainly makes the case that some bank officers should serve some jail time.
The show's segment revealed some pretty amazing stuff. One of the most incredible parts includes reports from former "robo-signers." One was paid $10 per hour to pretend to be a bank executive with a made up name to sign off on foreclosures. Here's an excerpt of an interview by Scott Pelley's from 60 Minutes. He talks to Chris Pendley, whose job it was with to sign the name "Linda Green" around 350 times per hour.
Pelley: Your first day, what did they tell you your job would be?
Pendley: That I was going to be signing documents using someone else's name.
Did you think there was something strange about that in the beginning?
Yeah, it seemed a little strange. But they told us, and they repeatedly told us, that everything was above board and it was legal.
And your previous experience in banking?
In legal documents?
There really were no requirements for the job.
You had to be able to hold a pen.
Hold a pen.
But you were signing these documents as if you were an officer of the bank?
How many banks were you vice president of in a given day?
I would guess somewhere around 5 to 6.
And remember, Linda Green was not a bank executive -- it was a made up name used because it was simple. 60 Minutes also interviewed someone who notarized these documents, while knowing that those signing were misrepresenting their names.
This segment raises a few questions. First, should these robo-signers face criminal charges? At the very least, this would appear to be identity theft. Individuals knowingly signed someone else's name on a legal document, or knowingly verified fraudulent legal documents. It shouldn't really matter what the company told them: ignorance of the law does not shield you from prosecution. Of course, their cooperation with authorities to prosecute bank executives could help to limit any penalties they might face.
Second, of course, how is it that the bank officers who knew this was going on -- and some must have -- this aren't facing serious criminal charges? If this isn't fraud, then what is? This goes way beyond cutting corners or accidentally losing documents.
Here's the full video of the segment: