A
ONE-MAN CONSUMER PROTECTION CAMPAIGN LAUNCHED BY
A RETIRED OAKVILLE RESIDENT HAS CAPTURED THE
INTEREST OF MEDIA, FINANCIAL EXPERTS, AND
GOVERNMENT FINANCE OFFICIALS AROUND THE WORLD.
Tony Crawford is a retired computer engineer and
writer living in Oakville Ontario, Canada. Ten
years ago, he and his wife Jill discovered they
were victims of a tax credit scam that leaves
people in debt to what is fondly known in the
trade as ‘Sitting Duck’ loans.
Crawford's lawyers exposed an amazing scam that
victimizes people like Tony. It’s the classic
shell game: peoples’ savings into retirement
plans advised and reported as mortgage payments
for ownership in real estate turn out to be loan
payments in debt waiting for collection by banks
with court orders to force payments of
promissory notes.
Canadian CHTV, 1010News and BBC radio interviews
about his book ‘The Perfect Sting’ attracted
the attention of financial experts and
politicians around the world including Canadian
Minister of Finance, James Flaherty who Crawford
met to discuss consumer safeguards to promote at
the November 2008 G20 Summit.
Crawford's latest work, ‘ABCP Rubber-Stamped
and Papered Notes’ is a free public awareness
talking book for everything people want to know
about ‘Sitting Duck’ loans, but were afraid
to ask.
For Crawford it all started – as a banker
tells the story in court testimony – with
transformations of tax shelter contracts to buy
office units already mortgaged into additional
agreements to double the debt with personal
loans. Apparently, all it takes is a rubber
stamp to print a bank logo over the words
‘promise to pay’ on blank checks as notes
filled out to make sales. It doesn’t matter if
loan applications are missing, or numbers are
crossed out or changed to sell more units –
anything goes and even sloppy work by crooks
making fraudulent promissory notes is enough for
banks collect by litigation and use the court
system as their own private collection agencies.
But the scam is bigger than ‘just’ tricking
people out of life savings – the real game is
to double dip tax credits with loans twinned as
mortgages to embezzle cash from investment
income that people file as if paid a loan from
personal income. It means people become
unwitting coconspirators in massive tax evasion
to divert tax from public wealth to the benefit
of banks selling loans, and their agents selling
investments.
It
works because financial advisors and sales reps
swear oaths to lawyers handling loans to sell
investments peoples’ signatures identify them
to debt to promissory notes in the small print
of commercial paper. It’s legal and banks are
immune from prosecution. It’s that easy.
Banks
have crafty paperwork to hide their role in tax
shelter schemes. In Crawford’s case, about 300
investors were apparently saddled with about $22
million in trick bank loans they knew nothing
about – paid to a crafty lawyer evidently
taking about half as much again from investors
signing as ‘Makers’ of Non-bank Notes who
still wonder where the money went.
It
sounds a bit like the ABCP Third Party Notes
scandal in the largest $32 Billion bankruptcy of
a financial conduit in Canadian history with
taxpayers bailing out banks that want to be rid
of Non-bank Notes in default. It’s the same
with the USA in the largest ever trial for tax
evasion at US2.6 Billion involving bankers,
lawyers and accountants. In the United Kingdom
banks are in the news for not being open with
British Prime Minister Gordon Brown questioning
runaway debt that Crawford wants a
‘Responsible Lending Act’ with regulations
to put a stop to irresponsible lending.
Crawford proposes a simple ‘Reverse Onus
Rule’ that lenders must prove identity
validation and financial due diligence before
approving loans to create debt. It would stop
the problem before it starts, if:
1.
Lenders and debtors are fully involved and both
sign awareness of borrowing intentions,
2.
Lenders must provide proof of identity in
lending decisions to settle collection issues.
Isn’t that how it’s supposed to work? It
could be so easy… all it takes is one call
from a bank to check identity and validate third
party representations to avoid financial and
social impacts of trick loans. In all these
cases, banks say they trust third party
representations, if things go wrong it’s
always the customer’s fault with the onus of
proof on them to prove they were tricked into
debt. In court, clueless defendants are called
‘Sophisticated Investors’ and judges rule no
credible evidence of wrongdoing by banks that
leaves innocent Canadians on the hook for
‘Sitting Duck’ loans. Some pay from family
savings, or selling or re-mortgaging their homes
to off debt. Some take second jobs. Some die in
shock, and some commit suicide. After nine-year
litigation a bank has spent hundreds of
thousands to finally win a summary judgement for
Crawford’s passage into an $80,000 debt
without trial.
Today, taxpayers around the world have paid some
fourteen trillion dollar as about a quarter of
everything the world produces to cover bad debt
in so-called sub-prime mortgages and commercial
paper. The USA is talking about a ‘Bad-bank’
to recycle toxic financial instruments.
Crawford has filed a complaint with the Upper
Canada Law Society concerning highly suspicious
irregularities in his case currently before the
Toronto Court of Appeal on January 30, 2009,
three days after the Minister of Finance
announces the 2009 budget.
Crawford refers to Canadian experience as reason
for regulations long overdue. He is optimistic
Canada's Minister of Finance will show
leadership in a Canadian approach that links
financial regulations and consumer protection
with socioeconomic stimulus initiatives for a
sustainable 2009 budget. |
