The broker's house didn't print out. Giving it another try here:

Stockbroker took six of his rich pals for a ride and lived high on hog

David Holzer, who reportedly stole $16 million from pals, was nabbed at his $2.5 miilion
New City estate.

Financial adviser Barry Fingerhut grew suspicious of the stockbroker and alerted cops.

A Manhattan stockbroker was busted Thursday on charges of stealing more than $16 million
from six close friends and spending it on jewelry, furniture and fancy cars.

David Holzer, 58, was arrested at his $2.5 million New City mansion for allegedly fleecing
his friends, including one man who says he was swindled out of $13 million.

The crook’s house



Detectives who searched Holzer's home and $5,000-a-month upper East Side apartment in late
April found mounds of jewelry, Rolex and Cartier watches, a Ziploc bag full of credit
cards and four luxury cars, including a $300,000 Aston Martin.

Holzer's checking account had just $375 in it when he was busted. Prosecutors said he
spent almost all the stolen cash on himself and his family. His American Express bills
totaled $2 million between 2002 and 2006, prosecutors said.

"He worked until 2003, since then he's been stealing," Assistant District Attorney
Christine Payne told Manhattan Supreme Court Justice Roger Hayes.

Holzer pleaded not guilty before Hayes ordered him held on $2 million bail as his
distraught wife, Lesley, watched.

Holzer, who has three grown children, pocketed $13 million from wealthy financial adviser
Barry Fingerhut over a four-year period ending in 2006. Fingerhut finally became
suspicious and alerted authorities.

Prosecutors say Holzer began stealing in 2002, when he took $3.2 million from an unnamed
client at Brean Murray & Co., a brokerage house he left in 2003.

Officials at the company, which has since merged with a second Manhattan firm, could not
be reached for comment.

Prosecutors said Holzer stole more money in an attempt to pay that first client back.

Because of a five-year statute of limitations, Holzer cannot be prosecuted for the 2002
theft, officials said.

"We're very angry and very disappointed," said victim Barry Pessar, who said he had been
"a close friend" of Holzer for a decade.

Pessar gave Holzer $150,000 to invest in March and April and said he did not know anything
was amiss until prosecutors called him recently.

Two of Holzer's other victims were Scarsdale-based interior designer John Rapillo and his
wife, Heidi. The novice investors approached Holzer after winning a $2 million financial
settlement and gave him $1.6 million to invest for them, prosecutors said.

Debbie Cifuni, who has lived in the neighborhood for three years, said the Holtzers stood
out in the upscale community.

"They mostly kept to themselves, but had a lot of fancy cars. Took a lot of trips and had
a lot of flashy money," she said.

Holzer's lawyer, Ronald Rubenstein, said his client had a $250,000-a-year job, but would
not say where he worked.

[ The NY Daily News: http://tinyurl.com/5raxkq ]

"In your heart you know I'm right," ---- Barry Goldwater. Nobody listened.

FDR found the answer. He took a bootlegging crook named Joe Kennedy and made him head of
the SEC. Old Joe decided he wanted to be President so he nailed all the other crooks and
turned honest. He never made it but three of his kids got the chance. One made it and two
got shot. No imagination in the White House today.

Being an old news hound myself, I can guarantee that when the whole story comes out there
was not a rogue who single-handedly brought down a giant company. What happened was there
were a serious of stupid blunders by a group of men from all levels of the company who
made a series of needless blunders because of greed and protocol. If you want to see the
real story watch the big oil CEOs who are about to explode the world economy by breaking
the oil bubble. They are not managing but bumbling.

Last edited on: 05-23-2008 07:42 am

[ New York Times, May 23, 2008: http://tinyurl.com/5d9xvu ]

Société Générale Managers Blamed in $7.7 Billion Trading Scandal

PARIS — Serious management failures by immediate superiors allowed a rogue trader at
Société Générale to commit the biggest fraud in financial history, according to an
internal report to be released Friday.

The report raises questions about whether the trader, Jérôme Kerviel, had an accomplice
at the bank.

The two direct supervisors of Mr. Kerviel are facing possible dismissal, as is Mr.
Kerviel’s former trading assistant, according to people with direct knowledge of the
bank’s action.

The report, which was written by internal auditors, will suggest that Mr. Kerviel himself
probably did not manipulate Société Générale’s computer system to enter large
unauthorized bets under someone else’s name. Instead, the report concludes that on
several occasions, his assistant, Thomas Mougard, did it for him, raising questions about
the role of Mr. Mougard in the trading.

Mr. Mougard has denied ever knowingly entering fictitious transactions himself.

By spreading the responsibility beyond Mr. Kerviel, whom the bank blames for bringing
about 4.9 billion euro ($7.7 billion) in losses, the report could make the French bank
more vulnerable to a lawsuit seeking class-action status that has been filed in the United
States, lawyers said.

The auditors implicated Mr. Kerviel’s two immediate supervisors on the Delta One
derivatives trading desk as being negligent, although the report does not name them
explicitly, according to the person who has seen the report.

“What this report makes clear is that the supervisors of Jérôme Kerviel did not do
their job,” said the person, who declined to be identified, citing the confidential
nature of the report. “They had a 9-in-10 chance of discovering what was going on.”

The supervisors were Eric Cordelle, Mr. Kerviel’s immediate manager, and Martial
Rouyère, who heads the Delta One desk.

Société Générale shareholders gathering for their annual meeting in Paris on Tuesday
may find some comfort in a separate report, also to be released Friday. The auditing firm
PricewaterhouseCoopers is expected to say that since the scandal, Société Générale has
identified the right steps to address shortcomings in its risk control systems and will
urge the bank to put the measures in place, the person who read both reports said.

Société Générale said last month that it would invest as much as 100 million euros
this year to improve its risk-management systems. After 75 alerts failed to expose Mr.
Kerviel’s activities, the bank added controls creating a cumulative record of each
trader’s alert history that makes it easier to detect patterns. And the bank said it
would set up an internal fraud investigation group separate from its risk-control and
trading divisions.

The two reports scheduled for release Friday were commissioned by a committee of
independent directors created in January to study the mechanisms that Mr. Kerviel used to
hide his activities and to identify the lapses that enabled him to expose the bank
secretly to 50 billion euros worth of risk — more than the market value of the bank
itself.

The internal audit completes a preliminary draft published in February, which had
identified the 75 alerts.

One of Société Générale’s lawyers, Jean Veil, played down the importance of the
final report, arguing that it offered few insights. Auditors, he said, simply “confirmed
earlier findings.” But when the last report was published Feb. 20, auditors had not yet
been able to interview Mr. Cordelle, Mr. Rouyère and others who at the time were busy
testifying in the police investigation.

There is nothing in the latest internal report that suggested involvement of anyone in the
hierarchy above Mr. Rouyère, the person who read it said. Mr. Rouyère’s boss,
Pierre-Yves Morlat, the head of trading, and Mr. Morlat’s superior, Luc François,
Société Générale’s former head of equities and derivatives, have both resigned and
left the bank.

The findings Friday are unlikely to change much for the criminal inquiry. Mr. Kerviel, who
has admitted to fabricating trades and forging documents to hide his activity, is the only
one formally under investigation.

Mr. Kerviel has never disputed the bank’s claim that he was the sole architect of an
elaborate ruse involving scores of fake trades. He has said, however, he would not be made
a “scapegoat” for the bank’s lapses in controls.

$6.2 million here, $6.2 there, pretty soon you are talking REAL money.

That's just plain scary!

Bank Gives Up on Lost Money, Reassigns CFO

After five months of trying to figure out why it couldn't find $6.2 million recorded on
its books, a bank has given up, restated its previous financial results, and reassigned
its CFO.

On Monday, Willow Financial Bancorp filed an amended annual report for its 2007 and 2006
fiscal years. To make up for the missing $6.2 million, the firm recorded it as a charge to
earnings for the first two quarters of fiscal-year 2006, when its "out of balance
condition first arose."

The holding company for Willow Financial Bank, a Pennsylvania community bank with $1.6
billion in assets, Willow Financial Bancorp announced in November that it had a problem.
It then spent more than $2 million over five months in "exhaustive efforts" to figure out
what had gone wrong but wasn't able to properly correct its previous accounting entries,
the bank said in its amended annual report.

[ CFO.com: http://tinyurl.com/3u7lbw ]

Senator’s Ties to Real Estate Draw Criticism

TUSCALOOSA, Ala. — He has made millions as a title insurance executive, landlord and
real estate developer in this college town, where the economy, despite trouble nationwide,
is still growing nicely. Now, as a United States senator, with the mortgage mess fueling a
national economic slowdown, Richard C. Shelby has more say over the revamping of housing
finance laws than almost anyone else in Congress.

Mr. Shelby, 74, does not run a key Congressional committee. Instead, as the ranking
Republican on the Senate Banking Committee, he is using his clout and the Democrats’
slim majority in the Senate to help determine what gets in, or almost as important, what
is left out, of legislation.

He will soon play a major role in deciding the fate of one such bill, to help struggling
homeowners, that the House passed, 266 to 154, on Thursday.

But over the years, his critics say, Mr. Shelby’s ties to the mortgage industry and the
Alabama real estate market, and the generous campaign donations he receives from financial
services companies, have distorted his perspective and led him to delay critical
legislative remedies.

Indeed, Mr. Shelby’s legislative and business worlds have often intersected. For
instance, while on the Banking Committee, he financed an apartment complex he owns in
Tuscaloosa with a $5 million loan from Freddie Mac, the same government-sponsored mortgage
company whose regulation his committee is reshaping.

Even his efforts to steer federal money to the University of Alabama, where a recently
built $60 million science building is named after Mr. Shelby and his wife, Annette, have
benefited him. The tens of millions in earmarks have helped the university, his alma
mater, grow and attract more students. The tenants of his apartment complex are mostly
students.

Mr. Shelby said in an interview his business dealings posed no conflict.

“It doesn’t affect me at all. I’m going to put the interests of the nation first,”
he said. His stubbornness over housing laws, he said, stems from his free-market
philosophy and opposition to using tax dollars to bail out people who acted recklessly.
“We can’t bail out everything,” he added.

Others see it differently. “Senator Shelby would have prevented anything going through
that the industry was not happy with,” said Representative Brad Miller, Democrat of
North Carolina, who has pushed legislation to crack down on predatory lending, an effort
that has stalled in the Senate in part because of Mr. Shelby’s reservations. “That’s
the sense from all the people who are involved in the issue.”

Representative Barney Frank, the Massachusetts Democrat who leads the House Banking
Committee and has won points for working with the Bush administration on housing issues,
said he had been surprised by Mr. Shelby’s unwillingness to accept several proposals
like a permanent increase in the cap to $730,000 from about $360,000 on home loans that
can be federally insured.

“I think he has been the major obstacle,” Mr. Frank said, calling it “a serious
problem in getting things done.”

The son of an Alabama steelworker, Mr. Shelby was elected to the House in 1978, after
working as a trial lawyer, prosecutor, magistrate and state senator in an
up-by-the-bootstraps career that saw him earn a wide political base as a conservative
Democrat in the deep South.

Eight years later, he won election to the Senate, but his ties to the Democratic Party
ruptured with Bill Clinton’s election to the White House in 1992. Mr. Shelby blasted Mr.
Clinton for what he considered his liberal tax-and-spend ways, and in 1994 he became a
Republican, a split that caused lingering tensions with former colleagues.

A tall, imposing man, Mr. Shelby has adopted a much lower profile in the last few years
after he and his office were the targets of an F.B.I. criminal investigation into the
possible leak of classified information concerning a National Security Agency intercept on
Sept. 10, 2001, indicating possible terror attacks in the works. No one was charged in the
case, but the leak provoked tensions with the White House.

Mr. Shelby has become considerably richer in his years in Congress, with a net worth of $9
million to $32 million, according to his 2007 financial disclosure form.

The single biggest source of his new wealth is the 124-unit apartment complex — complete
with a pool and a tennis court — that he built in Tuscaloosa with his wife in 1995 on
land that had been assessed at a few hundred thousand dollars. Now, with the 13 new
apartment buildings, it is worth nearly $8 million, property records show.

The financing on the apartments, Yorktown Commons, a few miles from the University of
Alabama, shows the complications of serving on the Senate Banking Committee while also
developing real estate.

A $5 million mortgage on the apartment complex, arranged in October 2002 by the Reilly
Mortgage Group of Virginia, now owned by Wells Fargo Bank, was financed by Freddie Mac.
Mr. Shelby said he did not know Freddie Mac would assume his loan. “This was just a
plain-vanilla commercial loan,” said a Wells Fargo official, who asked not to be named
because bank rules prohibit public discussion of loans.

While serving as chairman — a post he held until Democrats took control of Congress in
2007 — and more recently as the ranking Republican, Mr. Shelby has called for allowing
Freddie Mac’s regulator to demand increases in the capital cushion the company must keep
to back up its own debt and the mortgages it guarantees.

But Mr. Shelby has for years blocked legislation that would have restrained Freddie Mac
and its sibling, Fannie Mae, on the grounds that the bills did not go far enough. In doing
so, the mortgage financiers were able to expand rapidly. His positions on other housing
issues have frequently been in line with those advocated by the Mortgage Bankers
Association, whose legislative agenda was devised in part by Tom Szydlowski, a senior
executive at Reilly Mortgage, the bank that arranged Mr. Shelby’s $5 million loan and
sold it to Freddie Mac. Mr. Szydlowski joined Reilly a month after the loan to Mr.
Shelby.

The Mortgage Bankers Association and Mr. Shelby opposed a provision in a Senate bill
debated this spring that would have allowed bankruptcy judges to lower the principal on
certain loans for homeowners facing foreclosure. Housing advocates viewed the provision as
their highest priority, but Mr. Shelby and the mortgage bankers argued it would push up
lending costs. It was removed from the measure.

Mr. Shelby and a spokesman for Mr. Szydlowski said there was no relationship between Mr.
Shelby’s legislative views and the loan. What guides his positions, Mr. Shelby said, is
his confidence in free markets, tempered by proper government oversight and disclosure
requirements.

“I want the market to work if it can, and most of the time it will, but not without some
pain,” Mr. Shelby said in an interview.

But Bill Buzenberg, executive director of the Center for Public Integrity, a Washington
ethics group, said Mr. Shelby should not be playing a central role on legislation that
would affect mortgage bankers and Freddie Mac.

“Even if everything is by the book, it looks bad, it just smells,” Mr. Buzenberg
said.

Questions about the intersection of his two careers, in real estate and politics, have
come up before. Just two blocks from the county courthouse here is the headquarters of
Tuscaloosa Title, a real estate title insurance company Mr. Shelby has controlled since
1974.

When the Department of Housing and Urban Development in 2002 proposed rules to save
homebuyers hundreds of dollars in closing costs by allowing a single, discounted package
that would include items like the appraisal and title insurance, Mr. Shelby objected,
saying the rules would hurt small businesses. Tuscaloosa Title, in a one-story office
building that he owns, employs about a dozen people.

“Only the larger institutions would have the market power and volume of business that
would permit them to offer volume discounts,” he said in a 2003 speech to the National
Association of Mortgage Brokers.

The agency, under pressure from Congress, ended up withdrawing the proposal.

Since his early days in Congress in the 1980s, Mr. Shelby has won support from the banking
industry, collecting fees for speeches before industry groups and, since 2000, raising
nearly $1 million from industry powerhouses.

On occasion, the timing of the contributions and Mr. Shelby’s official positions have
overlapped. Last June, Mr. Shelby pronounced in a television interview that Congress
should not increase the taxes on private equity firms like Blackstone Group.

Six days later, campaign finance records show, Mr. Shelby collected nearly $25,000 in
donations from Blackstone executives. Mr. Shelby said executives at Blackstone have long
supported him. “That is not relevant to any decision I made, whether I raise money or
don’t raise money,” he said.

Mr. Shelby, who has a reputation on Capitol Hill as a populist, has also taken certain
positions that have alienated the banking and financial worlds and earned him admirers
among some Washington consumer advocates. He has been particularly dogged in fighting for
goals like privacy protections on the financial information of consumers and corporate
reporting requirements.

“I’m on the taxpayers’ side,” Mr. Shelby said in the interview.

Whatever the issue, the Democrats’ slim majority in the Senate helps explain Mr.
Shelby’s outsize influence. There are 49 Democratic senators and two independents who
usually vote Democratic, but Senate rules require 60 votes to cut off debate on
controversial legislation. Democrats realize they need Mr. Shelby to pass a deal.

“He may be slow, he may be cautious, he may be frustrating,” said Senator Christopher
J. Dodd, Democrat of Connecticut, who is the Banking Committee chairman. “But once he
makes the deal, it happens.”

[ New York Times: http://tinyurl.com/5n7ppj ]

Legislator asks DEA to explain pot club raids

A congressional leader, citing complaints from Bay Area mayors and lawmakers, wants the
Drug Enforcement Administration to explain its increased use of "paramilitary-style
enforcement raids" and property forfeiture orders against medical marijuana patients and
suppliers in California.

With drug trafficking and violence from international cartels on the rise, "do you think
the DEA's limited resources are best utilized conducting enforcement raids on individuals
and their caregivers who are conducting themselves legally under California law?" House
Judiciary Committee Chairman John Conyers, D-Mich., said in a letter to the agency.

He also noted the DEA's recent tactic of sending letters to hundreds of property owners
who rent to medical marijuana dispensaries, advising them that they could be prosecuted
and lose their property under federal law.

Property forfeitures, Conyers said, have typically been reserved for "the worst drug
traffickers and kingpins" and might have the unintended effect of driving medical
marijuana distribution underground. Medical marijuana advocacy groups say the letters have
led to evictions and closures of dozens of supply shops that had been operating with state
and local approval.

The congressman also asked how much the DEA was spending on the raids.

The letter, dated April 29, was addressed to the DEA's acting administrator, Michele
Leonhart. Agency spokeswoman Rogene Waite declined to comment on the questions Wednesday,
saying only that "the federal government does not recognize medical marijuana. ... The
DEA, of course, would be part of the federal government."

Conyers attached a copy of a resolution approved by San Francisco supervisors in February,
attacking the DEA for "its irrational policy and hysteria" and calling on the city
attorney to support property owners facing prosecution or forfeiture for renting to
medical marijuana dispensaries. The Los Angeles City Council also has condemned the
federal agency's actions.

Conyers also cited statements by San Francisco Mayor Gavin Newsom and Oakland Mayor Ron
Dellums criticizing the DEA, and a resolution introduced by state Sen. Carole Migden,
D-San Francisco, urging that Congress pass a law ending federal raids and prosecutions in
states that have legalized medical marijuana.

[ San Francisco Chronicle: http://tinyurl.com/4kpza3 ]