DOJ Closes Investigation of Former Countrywide CEO Mozilo
By: Joy Leopold
After paying a $22.5 million fine, and after Bank of America footed the bill for a $45 million settlement on his behalf, former Countrywide CEO Angelo Mozilo has had his name cleared.
Criminally, at least.
In October Mozilo settled a civil lawsuit with the Securities and Exchange Commission for $67.5 million, while not admitting or denying fault for his actions, which the SEC alleged helped bring about the financial meltdown.
The U.S. Justice Department closed the investigation of Mozilo that began in 2008, determining that those same actions made by Mozilo while he was CEO of the company were not criminal.
But other investigations of Mozilo are still underway. Last week Rep. Darrell Issa requested a subpoena be issued to Bank of America, which bought Countrywide in 2008, regarding the “Friends of Angelo” program that offered preferential loan terms to lawmakers and government officials, allegedly in exchange for political favors.
Despite lawsuits against him and accusations that his firm was one of the driving factors behind the housing market collapse, Mozilo maintains that he was just trying to make a difference, by helping to originate more loans to minority borrowers, who he said have a “very different” experience when applying for loans.
“Mozilo’s record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite – a looming disaster in which Countrywide was buckling under the weight of increasing risky mortgage underwriting, mounting defaults and delinquencies, and a deteriorating business model,” said Robert Khuzami, director of the SEC’s Division of Enforcement, in October, when it was revealed Mozilo would pay the settlement.
But it is clear Mozilo feels differently, despite agreeing to pay. Of his company, he said, “We were a company that I would deem more transparent than any public company, certainly financial services company, in that we sent out a monthly operation report telling them where we are and what our view is, plus some financial numbers.”
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