On November 1, 1983, the doors to Nebraska’s largest industrial savings and loan company were closed, as Commonwealth was declared insolvent. The 6,700 depositors with $65 million dollars at stake would never be fully compensated for their loss, ultimately receiving about 59 cents on the dollar for their deposits, which they all mistakenly believed were insured up to $30,000 through the Nebraska Depository Insurance Guaranty Corporation, which actually was essentially an insurance pool with assets of only $3 million.
The case dominated Nebraska news for months. The case and investigation ultimately led to the conviction of three members of the prominent Lincoln family that owned the institution, the resignation of the Director of the State Department of Banking, and the impeachment of the Nebraska Attorney General and the suspension of his license to practice law. State and Federal ligitagion arising from the failure of Commonwealth drug on for years.
Here at the police department, the Commonwealth failure led to the formation of a specialized white-collar crime detail, now known as the Technical Investigations Unit. At the time, municipal police departments in the United States had virtually no capacity for investigating financial crime and fraud of this magnitude, and we quickly became well known for our expertise in this area. The early experience served LPD very well in the ensuring years.
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Monday, October 18, 2010
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7 comments:
Chief-This should be interesting for your readers. 5% of the Commonwealth deposits was in the Nebraska pool when Commonwealth went down.
Today, the FDIC, which is also an insurance pool, has 1.15% of deposits in the pool.
When you hear "too big to fail", that's part of it. When a bank fails, FDIC takes money from all other banks through assesments to cover the loss. So even if you don't have assets in the failed bank, it will effect your bank. Too many banks fail, and others will fail due to FDIC assessments. Kind of a house of cards.
256
Now that LPD is so good at catching white collar criminals in the private sector, city government appears to be the means for unscrupulous businesspersons to steal from us. I don't even want to know how many pockets are being lined with tax payer's money with this Haymarket arena deal.
That's called the fox guarding the hen house there Steve.
My bank is self insured.
Chief,
Where is Curt Hibdon nowadays?? He was the TIU guru back in the days.
Oh, and I see you're sporting a new shirt. Whats up with that? And more importantly, when you switched over shirts, why didn't you go to 3 stars!!!???
Al-
He's at the Nebraska Department of Health and Human Services.
We're phasing in the new uniform. The big decision was t-shirt color. Regarding collar brass, as you well know I do not embellish my uniform with superfluous stars, bling, flash, scrambled eggs and bric-a-brac...unlike some chiefs with beachfront estates. Don't make me post a link.... ;-)
That hurt...... but well written chief!
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