Attorney General Hood Recovers About $76 Million to Date for Mississippi from Financial and Mortgage Crisis

February 5, 2015
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Attorney General Jim Hood has returned approximately $76 million to Mississippi from losses suffered during the Financial and Mortgage Crisis of recent history.

The most recent case was settled Tuesday when Attorney General Hood announced that Mississippi, the U.S. Department of Justice and a coalition of 19 states and the District of Columbia reached a $1.375 billion settlement with Standard & Poor’s Financial Services LLC over allegations that S&P misled investors when it rated structured finance securities in the lead-up to the 2008 financial crisis.  Mississippi will receive $26,754,000 million in that settlement.  The Attorney General has also returned another $2.29 million from residential mortgage backed securities cases (RMBS), with more to come.  Additionally, a $25 billion joint federal-state agreement with the nations’ five largest mortgage servicers over foreclosure abuses and fraud, and unacceptable nationwide mortgage servicing practices in 2008 netted approximately $47.1 million for Mississippi.  That money was used to help homeowners struggling to keep their homes and those who suffered due to the foreclosure crisis while also putting $7.7 million into the state general fund.  These cases bring the Attorney General’s current total number of known recoveries for Mississippi related to the financial and mortgage crisis to $76,144,000.

“Mississippi was hurt by the greed of bigger business during the foreclosure crisis,” said Attorney General Hood.  “It is my hope that the recovery of this money will help the State rebound in a significant way.”

Mississippi can expect to see payment from the S&P settlement by March 7.

Since taking office, Attorney General Hood has returned over $857 million to the state from corporate wrongdoers.

 


Attorney General Hood Helps Lead States to $1.375 Billion State-Federal Settlement with Standard & Poor’s

February 3, 2015
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Attorney General Jim Hood announced today that Mississippi, the U.S.  Department of Justice and a coalition of 19 states and the District of Columbia have reached a settlement agreement with Standard & Poor’s Financial Services LLC (S&P) resolving allegations that S&P misled investors when it rated structured finance securities in the lead-up to the 2008 financial crisis.

Mississippi opened its investigation into S&P in 2010, filing its lawsuit against the company in 2011.  Mississippi partnered with Connecticut, the first State to sue S&P in 2010.  Illinois followed in 2012.  In 2013, DOJ and the other 17 states filed similar lawsuits against S&P.

The settlement requires S&P to pay $1.375 billion.  The 20 States will share $687.5 million and DOJ will receive $687.5 million.  Mississippi will receive $33 million for its role as a Lead State in the 20-state coalition.  The settlement amount is expected to wipe out S&P’s operating profit for a year.

“This settlement is the culmination of years of hard-fought litigation against an industry giant,” said Attorney General Hood.  “The result is historic because it finally and indisputably holds S&P accountable for its role in the financial crisis.  The size of the settlement and the successful partnership between the States and the Department of Justice send a strong message that no company is above the law.”

In addition to the financial settlement, S&P has agreed to a statement of facts acknowledging conduct related to its analysis of structured finance securities. S&P also agrees in the settlement to comply with all applicable state laws and, for five years, will cooperate with any request for information from any state expressing concern over a possible violation of state law. Further, the states retain authority to enforce their laws – the same laws used to bring these cases – if S&P engages in similar conduct in the future. The states and federal government have agreed to file stipulated judgments, consent judgments or similar pleadings in their lawsuits in order to implement the terms of the settlement agreement and resolve their respective court proceedings.

“The credit rating agencies were just as culpable as the investment banks in causing the financial crisis,” said Attorney General Hood. “In some ways, the conduct by the credit rating agencies was worse because these agencies held themselves out to be objective and independent.”

The federal and state lawsuits alleged that, despite S&P’s repeated statements emphasizing its independence and objectivity, the credit rating agency allowed its analysis to be influenced by its desire to earn lucrative fees from its investment bank clients – while investors and other market participants, including state regulators, relied on S&P’s promises of independence and objectivity. The complaints alleged that the agency knowingly assigned inflated credit ratings to toxic assets packaged and sold by the Wall Street investment banks. The alleged misconduct began as early as 2001 and became particularly acute between 2004 and 2007.

Structured finance securities backed by subprime mortgages were at the center of the financial crisis. These financial products, including residential mortgage backed securities (RMBS), commercial mortgage backed securities (CMBS), and collateralized debt obligations (CDOs), derive their value from the monthly payments consumers make on their mortgages.

In August 2014, the United States Securities and Exchange Commission adopted new requirements for credit rating agencies that address conflicts of interest and procedures to protect the integrity and transparency of rating methodologies and that provide for certifications to accompany credit ratings attesting that the ratings were not influenced by other business activities.

“I am satisfied that S&P now understands the gravity of its conduct,” said Attorney General Hood. “The result we achieved could not have happened without the cooperation of the states and partnership with the Department of Justice.  I thank Attorney General Holder and each of the Attorneys General from the settling states for their efforts in this case.”  In addition to Mississippi, the states involved in today’s settlement include Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Maine, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee and Washington as well as the District of Columbia.

Attorney General Hood especially thanks Connecticut Attorney General George Jepsen for his Office’s exceptional leadership and partnership throughout this case.  Notes Attorney General Hood, “General Jepsen and the superb lawyers from his Office deserve immense praise.”

Mississippi and Connecticut both have pending lawsuits for similar alleged misconduct against Moody’s Investors Service.  Those cases have been temporarily stayed pending resolution of the S&P case.

Click here to view the S&P Settlement Agreement, which includes the Statement of Facts as Annex 1 (beginning on p. 53 of the PDF).

 

 


Pearl Resident Going to Prison for Possession and Production of Child Pornography

February 2, 2015
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A Pearl resident is going to prison after being found guilty for possessing and producing child pornography, announced Attorney General Jim Hood today.

Michael Donaldson, age 35, of Pearl, was sentenced today by Rankin County Circuit Court Judge William Chapman on one count of possession of child pornography and one count of filming another without permission where there is an expectation of privacy. Donaldson was convicted by a Rankin County Trial Jury on January 23, 2015 after a week long trial.

Judge Chapman sentenced Donaldson to 40 years with 30 years to serve on the child exploitation charge (possession of child pornography) and sentenced him to serve five years on the photographing or filming of another without permission where there is an expectation of privacy. Donaldson will serve a total sentence of 45 years with 35 years being a mandatory day-for-day sentence. He was ordered to pay $1,000 to the children’s trust fund and $1,000 to the crime victim’s compensation fund. Donaldson must also register as a sex offender upon release.

Donaldson was arrested at his home by investigators with the Attorney General’s Cyber Crime Unit. The investigation found Donaldson in possession of hundreds of images and videos of child pornography, one of which he produced himself by placing a camera in a bathroom where he filmed a minor child.

“This crime is nothing short of sickening,” said Attorney General Hood. “We do appreciate the jury for a just verdict and Judge Chapman for the maximum time behind bars, which is exactly where this predator and others like him should be.”

This case was prosecuted by Special Assistant Attorneys General Brandon Ogburn of the Attorney General’s Cyber Crime Unit and Marvin Sanders of the Attorney General’s Public Integrity Unit.


Two Arrested for Insurance Fraud in Madison County

January 30, 2015
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A Tchula woman and a Madison man have been arrested for insurance fraud in Madison County, announced Attorney General Jim Hood today.

Paula Jordan Sharpe, 57 of Tchula and Shamel Cobbins, 38  , of Madison were arrested Thursday by the U.S. Marshal’s Office following indictment by a Madison County Grand Jury on one count insurance fraud and one count conspiracy to commit insurance fraud.

The indictment alleges that the two worked together to appropriate a benefit to themselves to which they were not entitled by executing  “a scheme to defraud Progressive Insurance Company, in that she/he filed or caused to be filed a fraudulent insurance claim form with Progressive Insurance Company stating a 1989 International Dump Truck…had been stolen when in fact Paula Jordan Sharpe had paid someone to dispose of the truck, with the intent to defraud Progressive Insurance Company.”

The initial investigation in the case was done by The Mississippi Bureau of Investigations and handed over to the Attorney General’s Office to present to the Grand Jury and, upon indictment, prosecute.

“We appreciate the great work done by the agents with MBI on this case and we look forward to presenting their findings in court,” said Attorney General Hood.  “We would also like to thank the officers with the U.S. Marshal’s Office for their assistance in the arrests of these defendants.”

The case is being prosecuted by Special Assistant Attorney General Larry Baker of the Attorney General’s Insurance Fraud Unit.

If convicted the defendants face up to eight years (five on the conspiracy charge and three on the insurance fraud charge) behind bars.  As with all cases, the defendants are considered innocent until proven guilty beyond a reasonable doubt in a court of law.


Madison County Resident Going to Prison for Possession of a Controlled Substance

January 27, 2015
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A Madison man has been sentenced to prison for possession of a controlled substance, announced Attorney General Jim Hood today.

Leabrian Myers, 23, of Madison, pleaded guilty Monday to one count of possession of a controlled substance in Madison County Circuit Court. Judge William Chapman sentenced Myers to the maximum penalty of eight years to serve in the custody of the Mississippi Department of Corrections as a habitual offender.  Myers was found to be in possession of 500 dosage units of hydrocodone with acetaminophen after a routine traffic stop.  The case was initially handled by the Mississippi Bureau of Narcotics and handed over to the Attorney General’s Office for prosecution.

“We appreciate Judge Chapman’s sentence ordering the maximum time behind bars,” said Attorney General Hood. “We also appreciate the initial investigative work done by the Mississippi Bureau of Narcotics which made this case.”

The case was prosecuted by Assistant Attorney General Stan Alexander of the Mississippi Attorney General’s Public Integrity Division.

Myers is also awaiting trial for burglary of a pharmacy in Ackerman.


Hinds County Man Going to Prison for Simple Robbery

January 15, 2015
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A Jackson resident has been sentenced to prison for simple robbery and receiving stolen property, announced Attorney General Jim Hood today.

Larry Ray, 19, of Jackson, appeared before Hinds County Circuit Court Judge William Gowan Friday to face charges related to two separate armed robberies. Ray pleaded guilty to two counts of simple robbery and one count of receiving stolen property.  For this crime, Judge Gowan sentenced Ray to 15 years in the custody of the Mississippi Department of Corrections with 10 years to serve, five years suspended and five years of post-release supervision. Ray was also sentenced in that case to 10 years for receiving stolen property. He was ordered to pay $500 to the Mississippi Crime Victims Compensation Fund.  Ray admitted in court that he and two co-defendants robbed two female victims at gunpoint at a Jackson apartment complex.

Ray also plead guilty in court to another simple robbery and was sentenced to 15 years in the custody of the Mississippi Department of Corrections with five years suspended.  In this case, Ray admitted he observed the victim placing money in their pocket while leaving a Dairy Queen in Jackson and grabbed the victim’s jacket from behind and reached into the victim’s front pocket and removed the cash that had been placed there.

The sentences are to run concurrent  meaning Ray will serve a total of 10 years in prison.  If the defendant fails to comply with the terms and conditions of his sentence he could potentially face 40 years behind bars .

This case was investigated by Christopher Watkins and Perry Tate and prosecuted by Special Assistant Attorney General Marvin Sanders of the Mississippi Attorney General’s Public Integrity Division.


Richland Resident Arrested for Child Desertion

January 14, 2015
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A Rankin County man has been arrested for child desertion, announced Attorney General Jim Hood today.

Joe Glen Tharp, Sr.. 36, of Richland has been arrested and booked in the Rankin County Detention Center today on one count of felony child desertion.  Tharp is alleged to owe approximately $35,000 in back child support.  If convicted, he faces up to five years in prison and a $500 fine. No court dates have been set at this time.  As with all cases, the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The arrest was made by Investigators Larry Ware and Keith Denson of the Attorney General’s Public Integrity Division.   The case will be prosecuted by Special Assistant Attorney General Elliott Flaggs, Director of the Attorney General’s Child Desertion Unit.


Two Mississippi Aldermen Arrested for Fraud

January 12, 2015
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Two Mississippi Aldermen have been arrested for filing fraudulent statements, announced Attorney General Jim Hood today.

Jeffrey L. Riley, 48, an Alderman for the city of Sledge, and Ontario Braxton, 41, an Alderman for the city of Coahoma, were both arrested Thursday (January 8) in separate and unrelated cases.  Both defendants are charged with filing a false qualifying statement of intent for the Office of Alderman. Riley and Braxton are both convicted felons and are accused of intentionally failing to reveal that information in their qualifying paperwork.  Both have been released on their own recognizance.

If convicted, Riley and Braxton face up to five years behind bars and a $10,000 fine. As with all cases, the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by Perry Tate and prosecuted by Assistant Attorney General Stan Alexander of the Attorney General’s Public Integrity Division.