ANOTHER HOLDER SCANDAL

6/17/12
Attorney General Eric Holder’s Justice Department is being accused of blocking prosecution of a high-visibility real estate deal. He allegedly aims to protect a high-profile international bank client of his former law firm and shield Democratic Party operatives implicated in the scheme. WND has obtained several hundred pages of documents alleging that Holder and Lanny Breuer, the assistant attorney general for the DOJ’s criminal division, have intervened to block recommended federal prosecutions in an ongoing dispute involving the exclusive Yellowstone Club, a private golf and ski resort now owned by supermarket billionaire Ron Burkle and international bank Credit Suisse.
Allegedly, Holder and Breuer want to shield from federal criminal prosecution the bank, Credit Suisse Group AG, a client of the Washington-based law firm Covington & Burling, as well as key Democratic Party operatives suspected of playing a role in allegedly fraudulent mortgage financing and bank lending practices. Holder and Breuer were partners at Covington & Burling.
Holder and Breuer are protecting Credit Suisse. Brian O’Neill, a Secret Service special agent based in Montana, insisted to WND in a telephone interview that Flynn’s allegations were “untrue” in that no prosecutions had been quashed by the Justice Department in Washington. When pressed to be specific, O’Neill refused to say anything further, referring WND to the Secret Service public information office in Washington, D.C.
The Secret Service public information office in Washington declined comment, referring WND to the Justice Department.
The Department of Justice public information office in Washington also declined comment on the case. Credit Suisse AG in the boom real estate years of the mid-2000s to market a variety of exotic loans. They included what were known as “equity recapitalization” loans designed to allow the developers of high-priced real estate, including the Yellowstone Club luxury resort destination in Montana, to realize anticipated profits years before the profits were actually earned. Instead of holding the equity in the luxury developments, Credit Suisse, after making the equity recapitalization loans, typically sold the equity to a syndication of institutional investors, including hedge funds and foreign investment entities. One of the hedge funds purchasing the Yellowstone Club was Boston-based CrossHarbor Capital Partners, operated by Sam Byrne, now a partner of Ron Burkle in the ownership and operation of the Yellowstone Club The “equity capitalization” loans first marketed by Credit Suisse First Boston, beginning Sept. 21, 2004, were valued according to appraisals conducted by Cushman & Wakefield that arguably were not compliant with the Financial Institutions Reform, Recovery and Enforcement Act of 1989, the FIRREA. “total net value” that established a value for the Yellowstone Club at $1.165 billion when it was only worth approximately $455 million. The scheme was simple: Credit Suisse made untold millions in fees making inflated loans on high-visibility luxury real estate based on fraudulent appraisals, with virtually no risk after the loans were sold to a “syndicate” of investors, including hedge funds and foreign investors. Setting $420 million as the “as-is market value” of the property, Credit Suisse made a $375 million syndicated loan through a Credit Suisse branch in the Cayman Islands to the Yellowstone Club in 2005. Founder Tim Blixseth received $209 million from the loan proceeds as his “equity recapitalization” pay-out.
Credit Suisse loan violated FIRREA as well as relevant state laws and regulations regarding fair market appraisals, and the first loan made in September 2004 was already in default.
With the industry-wide downturn in real estate in the United States, the Yellowstone Club has gone through a contentious bankruptcy proceeding before U.S. Bankruptcy Judge Ralph Kirscher, a Democrat appointed to the bankruptcy court by the U.S. Court of Appeals for the Ninth Circuit Nov. 15, 1999, during President Clinton’s second term.
The judge then approved in May 2009 a reorganization plan giving the Yellowstone Club to Burkle and Byrne for less than $10 million. – to allow Blixseth’s ex-wife and Sam Byrne, a Boston real estate investor with ties to the Democratic Party, to buy the 13,600 acre property cheaply after the bankruptcy had been declared.
Ron Burkle raised more than $1 million for Hillary Clinton’s 2008 presidential campaign.

And the beats goes on.

Source wnd

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