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CNNMoney.com's Colin Barr asks, "Where are the subprime perp walks?" and expresses dismay that, three years after the advent of the subprime mortgage crisis, not one major case has been brought by criminal prosecutors against senior executives tied to the subrime meltdown. A picture of everybody's favorite poster child and subprime villain, Angelo ("The Tan Man") Mazilo is prominently featured floating left of the story's text. Criminology expert Steven Ramirez doesn't believe that the dearth of prosecutions is do to the lack of targets of opportunity. "I don't think it's because of a lack of criminal activity," says the law school professor.

Another critic of the lack of high profile prosecutions is criminology professor Henry Pontell.

"We really have learned no lessons from the savings and loan crisis," he said, referring to the wave of bank failures in the 1980s that led to a number of notable fraud convictions. "The most germane one is that fraud plays a central role in these episodes. It acts as an accelerant for financial bubbles."

Based solely upon anecdotal evidence and gut feeling, I agree with Ramirez and Pontell that there was a great deal of outright fraud connected with the scope and depth of the collapse of the subprime and "exotic" residential mortgage markets, which collapse plunged the country and a good chunk of the world into a recession unlike any I've experienced in over 35 years in the workforce (if you call practicing law "work"). Unlike the last round, when the savings and loan industry went into a tailspin, proving that CEOs and other senior executives knew about and encouraged, much less actively participated in, the fraud is tougher to prove in connection with the subprime mortgage mess. I recall a number of instances involving failed Texas thrifts in the late 1980s where there was ample evidence that thrift owners and senior executives were swapping dead horses for dead cows, making stock loans to an owner of another thrift to purchase 100% of the stock in his own S&L in return for the borrower causing his S&L to purchase a bunch of participation interests in the lender's portfolio of exquisitely ripe carcasses known as acquisition and development loans (in which the lender funded 100% of the acquisition and developments costs AND all of the interest reserve, leaving the borrower with as much equity in the collateral as a US congressperson's integrity). This time around, the CEO's and Chairman's muddy paw prints aren't stamped all over the lender's records.

"The problem is finding the executives' fingerprints on the consumer files," said Peter Henning, a law professor at Wayne State University. "Angelo Mozilo may have set the tone at Countrywide, but there is no way you're going to find his fingerprints on any of those mortgages."

Even Marg Helgenberger of CSI couldn't find enough CEO DNA in these files to make a case. I'd like to watch her try, though.

The article also cites a lack of resources allocated to federal prosecutors to pursue these complicated cases as another factor that has slowed down pursuit of subprime CEOs. That may be the case, but even well-funded pursuit runs into what proved to be an effective defensive factor for S&L executives: the sheer complexity of the facts, and the need for an understanding of how banks and thrifts actually work. I was involved in more than one case in the early 1990s where former CEOs beat the rap because their experts actually knew something about the business, and were able to craft effective defenses based upon that knowledge. Money does buy happiness, especially where expert assistance is available for sale to the highest bidder.

Eventually, perhaps, the Eliot Nesses of this generation will uncover a pile of CEO subprime malefactors and send them to the pokey. If so, the task will take time and money, and at the moment, money seems to be in short supply.

By the way, while we're at it, let's not forget to focus on the other nest of vipers: Congress.

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