JB Campbell: Mortgage Fraud

Foreclosure fraud is in the news. Or it was. It probably will be again even though the media masters don’t want to talk about it. There’s a big decision coming up in Massachusetts as to whether securitized mortgages are just so much toilet paper. The banks got so greedy that merely collecting usury on “loans” that cost them nothing wasn’t good enough. They “securitized” them, bundling thousands, millions of mortgages and turning them into “securities,” selling them to even greedier speculators without the little detail of recording the transfers of ownership. Massachusetts’ highest court is going to decide if your mortgage ought to be zeroed out and the house put in your name, no more questions asked. And if you lost your home in the current Great Depression, as so many of us did, you’ll probably be able to get it back.

Foreclosure fraud is based on mortgage fraud, of course. Anything the banks do is based on fraud and lies – no exception to that rule. Mortgage fraud, interest fraud, foreclosure fraud – they’re all connected. Banks don’t lend a dime in real money – they credit your account with electronic entries out of the ether. They take zero risk but collect real cash from you and if you fall behind they take your house and sell it to the next poor sucker.

You may recall a couple of months ago that several big banks had suspended all foreclosures in all fifty states because a couple of homeowners had discovered the nature of the mortgage and foreclosure scam. The former congressman Alan Grayson’s YouTube video explaining the scam went viral. Then it became a non-subject. The lie factories went silent on the subject, not even trying to lie for their banking masters since the credibility gap in Manhattan could swallow Rockefeller Center, where so many lies originate.

So what happened to me and my friends twenty-eight years ago probably won’t happen to you, now that the fraud is becoming widely understood. The SWAT team probably won’t show up at your place for a foreclosure eviction. The SWATs may come for other reasons but the way things are going today, it won’t be for an eviction because fraud nullifies all contracts.

My friend Pete was a decorated Vietnam veteran. He got the Silver Star and Purple Heart for an action in which his unit was overrun by Vietcong and most of them killed. Pete and several others were wounded and Pete picked up an M-60 that wasn’t being used and managed to kill over a dozen VC in an extended fight and saved the lives of the wounded guys, allowing all to be rescued some time later. His award was re-evaluated and a survivor recommended the CMH but the officer-witness died during the process. The point is that Pete knew his way around guns. He had no criminal record and made his living as a real estate broker in central California. He and his wife Gwendolyn had done quite well in the real estate boom in the ‘70s, buying and selling fixer-uppers. Then the interest-rate crisis of 1980 hit and real estate didn’t sell so well with the prime rate at 23%, thanks to Paul Volcker.

By 1983 he fell behind in his mortgage payments and the bank in Santa Cruz foreclosed. Pete and Gwen had $240,000 in equity in their lovely property in the giant redwoods up on Summit Road. The bank, I came to realize, had no equity, no risk and no standing. But they had a crooked judge named Christopher Cottle, who was a reformed gang member according to an article in the Santa Cruz paper. But I didn’ t know that until later.

I read an article in the old Spotlight newspaper about the Minnesota legal case of First National Bank of Montgomery v. Jerome Daly of 1968. Do a search on that and discover some interesting things, such as the banker admitting that “banks create money out of thin air – it’s standard practice.” The jurors were so taken aback by this casual admission that they quickly found for Jerome Daly, and the judge, Martin V. Mahoney, remarked, “It sounds like fraud to me.” Daly’s contract with the bank was made null and void and the farm was his in fee simple. I missed the part where Judge Mahoney was murdered by poison six months later. The Daly case potentially was the death warrant for the standard bank practice of lending credit, should it ever become widely known.

I took this article to Pete and Gwen and suggested that they sue their bank for fraud and usury, based on Jerome Daly’s experience. Neither of them was very good on the typewriter so I wound up doing the paperwork of their lawsuit for them, which you can imagine was rather detailed.

The case went to court and was dutifully thrown out by Judge Cottle, despite our showing that the bank had put up nothing of value and had created credit out of thin air. It was appealed and indignantly denied by another judge. Pete assured me that he was licked but that we had fought the good fight. I went to Santa Fe to visit some friends. While there I had a bizarre nightmare that persuaded me I must return to Carmel as quickly as possible. If you ever have a weird dream and get an irresistible urge to act on it – don’t. This was possibly the worst mistake of my life, and I’ve made a few of them.

When I got home there was a message on my machine to call Pete, that he was going to be evicted and he needed another gun. Naturally, I took him a Heckler & Koch HK-91 in 7.62mm NATO that morning. And a half-dozen 20 round mags. I’d already given him a .357 Magnum revolver but he obviously could use more firepower.

What was I thinking? Pete had given me an M1A1 Thompson submachine gun a couple of years earlier that he’d brought back from Nam. I’d needed a clean gun to use against David Rockefeller and Henry Kissinger in 1980 in an operation that unfortunately went south, with me going to jail – no conviction. But Pete had come through, no questions asked, and I could hardly do less – right? Don’t answer that. We were also involved in an operation against Paul Volcker in ‘82 but one of our confederates was arrested and burned us to make a deal. Pete managed to persuade the FBI that the guy was lying. And I had just finished the manuscript of my book that would start the militia movement and was in a very revolutionary mood. Taking on some stinking banker’s SWAT team didn’t bother me, frankly. The team wasn’t ready for our combined anti-terrorist experience in Africa and Vietnam, if we’d been serious.

I showed up with the equipment and had lunch with them, their daughter and baby granddaughter and another vet named Jimmy. I checked him out on the rifle and said, well, if the cops weren’t going to show then I was going to go back to Carmel and get some sleep, as I’d had none since leaving Santa Fe thirty hours earlier. I went out to the upper gate and swung it open and looked down the road and saw the SWAT team approaching, single-file. Camouflage, AR-15 rifles and one bolt-action sniper rifle. Eight guys.

Back down to the house. Hey, Pete – they’re here.

The SWATs took positions behind bushes and trees. Pete had, at Gwen’s insistence pinned on his Silver Star and Purple Heart. Jimmy had a camera and wandered down to the lower gate to take pictures, the doofus. The sergeant in charge of the SWATs asked Jimmy to come a little closer so they could talk. Jimmy fell for it and the cop grabbed him. Jimmy yelled and pulled away but Pete went hustling down there to see. The sniper and his helper rushed Pete from behind and drew a bead on him. I stepped off the porch and waved frantically but silently for them to Get Back, Get Back! For some crazy reason, they got back. Maybe they were confused by my clothes. I had on slacks, white shirt, dark tie and sport coat. I probably looked like a cop. Gwen saw what happened and naively said, “Bruce, go up there and talk to them! Tell them to stop it!” I had nothing better to do, so I did what she said.

I could see where they were hiding so I walked carefully up the gravel drive toward them and took off my jacket and put it on a bush. They were both aiming at me. I raised my hands and said I just wanted to talk. One of them shouted, “You’re under arrest! Get on your knees!” I kept my hands up and said, “No, I’m not getting on my knees. I’m just asking you not to shoot my friend. He needs his day in court.”

“I said you’re under arrest! Get on your knees!” I shook my head and picked up the jacket and walked back down to the house, ignoring their shouted orders to stop. Pete came up from the lower gate and said, “What’s that all about?” When I pointed to the sniper and assistant, I got in a lot of trouble. I said, “Pete, those guys about killed you from behind when you ran down there. Gwen wanted me to talk to ‘em, and I said not to shoot you.”

Pete calmed down a little after that and the SWAT team withdrew after an hour or so. They cut water, gas, phones and power to the property. At one point, one of the SWATs fired his weapon. I looked out of the upstairs window where I’d been trying to take a nap and saw Pete lying on the porch below me. I thought he’d been nailed, but he yelled out, “Don’t get nervous in the service!” One of the dopes had had an accidental discharge. After a couple more hours, for some reason, they allowed the press to pour onto the property. Television, newspaper, radio guys were everywhere, interviewing Pete and Gwen. I told Pete that we needed some more guys up here and I’d take a chance and drive down to the local store and make some calls, but to hold on to my dog in case they busted me. Cops generally kill dogs. He said okay. I drove carefully through the throngs of reporters, out onto Summit Road and was immediately busted and pulled out of my car and put face down on the asphalt. Then into a car and taken downtown. After several hours I was taken to an interrogation room and a detective started with the questions. What the hell was this all about? I said that Pete needed his day in court, that he’d sued a bank for fraud and usury and Cottle threw it out. Well, this isn’t how you get justice, taking on a SWAT team. Really? How do you get justice?

He didn’t much care for me and I got the orange suit and was put in a cell block from the 1930s with a lot of guys. I was in there for five days. On about the second day, the jailer yelled out, “Where’s Campbell?” He said I had an attorney visit, which was pretty good since I didn’t have an attorney. It turned out to be two detectives. The one guy said he was with the Sheriff’s office and the other one was with the Coroner’s office. Coroner? “Yeah, we need next-of-kin information on Pete and Gwen.” You killed ‘em? “We can’t say anything until we notify next-of-kin.”

Wow. So now, I’m looking at Murder One. Any cops killed? “We’re not sure at this time.” Uh, huh. Wow. My friends are dead and I’m up for murder. “So, how about the next-of-kin information?”

I didn’t know where their next-of-kin lived or even what their names were. I wasn’t any help, but I would have been if I’d known. That’s how good they were.

I staggered back to the cell block. After an hour or so, the jailer called out my name again. “Hey, those two detectives said to tell you that the property’s secure and nobody was killed. They said you looked in pretty bad shape.” Whaddya mean, no one was killed? Besides my two friends, you mean? “Buddy, I’m in jail just like you are. I only know what they told me.” Someone shouted at me, “Hey, come look at this!” They could see a television screen beyond the cell bars and the news was on. Turned out that Pete had taken the whole gang, Gwen, daughter and her baby and Jimmy, right down the mountain, through the SWAT lines and the huge redwoods. He did it because the FBI had gotten in the act and gassed them. Pete watched my Scottie keel over at his feet just as he himself was getting extremely sleepy, along with everyone else. So he told them that they had to get out. I don’t know how the hell he did it but he pulled off a good one. That’s why the cops pretended they were dead so they could trick me into telling them where they probably went. They did trick me but I didn’t know anything.

Here’s how I avoided prison: The initial detective asked me the next day to go up to the house to talk Pete into giving up. I wanted to talk with him and get our stories straight so I immediately agreed. Shortly before the other two pulled the KGB trick on me, the first one changed his tune and bitterly denounced me as the brains of the whole operation. He said he’d found the lawsuit papers in my car. He said, “I know that you took the guns to him. We had a witness who saw the whole thing.” The thing was, no one had ever read me my Miranda warning, either out on the asphalt or in the squad room or anywhere. So I immediately said, “Yes, I took him the guns. The guns were mine.”

I eventually did get an attorney. I told him that I admitted bringing the guns to Pete.

“You what? Why did you say that?”

“Because I was never read my rights.”

He hesitated. “Are you sure about that?”

“I’m sure.” He checked with the detective, who reluctantly confirmed it. And for that reason I did not go to prison for twenty years. I was charged with multiple felony conspiracies (with no co-conspirator), much more serious charges than Pete, but they were all reduced to one misdemeanor accessory-after, because of the bad confession, and I had to do about seven weekends in jail.

Pete wasn’t so lucky. He was at large for a couple of months but was finally arrested in the courthouse where he was trying to get his legal papers. I went to his trial and the sniper pointed at me and broke into tears, saying that I had pointed him out to Pete and he could have been killed and that he had a family! His boss, the sergeant, took the stand and admitted that the Sheriff had authorized the SWAT team to kill all of us. Pete said, “Even the women and the child?” Yes, everyone. Pete got six years, did about two and a half at San Quentin.

So, we were a little ahead of the power curve on mortgage and foreclosure fraud. But now, twenty-eight years later, the true nature of the fraud is exposed for everyone to see. It is exactly as Jerome Daly and Pete told their respective juries, that the banks create money out of thin air but we have to give them hard cash or the property – plus interest. The banks couldn’t lose.

Until now. Now, they can’t win. They’ve been caught and their monumental crimes against the people are being revealed.

Representative Marcy Kaptur tells her Ohio constituents, do not leave your home under any circumstances. Demand to see the original note. In the great majority of cases, there is no original note because the mortgages have been “sliced and diced” and bundled and securitized and not legally recorded before they were turned magically into “mortgage-backed securities” and peddled to stupid and greedy speculators overseas. The federal government is in on the fraud also. Phony and Fraudie (Fannie May and Freddy Mac) have a bogus front company called MERS (Mortgage Electronic Registration Service) that has assumed power over millions of these fraudulent mortgages, but to avoid scrutiny, have moved MERS to New Delhi, or Calcutta or Bangalore or some damn place. That’s India! Does that sound kosher to you?

Hell, yes – Circle K kosher.