DOJ Stretching Allegations of Fraud to the Breaking Point
The Department of Justice is a fan of charging a bank with fraud if it knowingly breaches a contract, claiming that such a breach impacts a federally insured institution when that federally insured institution is the bank itself. It uses the approach to squeeze civiil money penalties and extend the statue of limitations to 10 years under FIRREA. But the U.S. Second Circuit Court of Appeals in New York ruled that "the Government's theory would convert every intentional or willful breach of contract into criminal fraud." Expect the DOJ to appeal. They've got a few lawyers. [6/6/16]
