Regarding the Hassan Nemazee bank fraud/Ponzi scheme, TPM Reader NB wonders the same thing we’ve been kicking around here:
Trying to get my head around this … I really only have one question: Shouldn’t large banks have more due diligence than this?
I mean, the low seven-figure loans, sure … that’s not that much money; just call the number that the guy gives you. But at the point where someone’s borrowing tens of millions of dollars, shouldn’t you be doing more than that? It just feels like an extremely flimsy scheme.
I mean, if it costs you $100K (two or three person-months worth of work), the largest loan here needs something like .15% odds of a total collapse for the due diligence to pay off.
Is there something more to this scheme that we’re missing?
