A short while ago, a bunch of states announced, to much fanfare, how they had negotiated a multibillion settlement with all those evil banks accused of screwing up foreclosure cases. The money, the government officials vowed, would go to those harmed by the banking-system process.
But guess what? Many of the states took the dough and are spending it on other government programs. The entire settlement, at least for some states, was simply a way to raise more money. Officials won’t use the words “scam’ or “extortion” or other loaded phrases. But that’s what it comes down to in the end, right?
Think of this the next time a bunch of state attorneys general, or other state officials, announce some major industry settlement, whether it’s with banks, or tobacco companies, or baby-toy makers. More than likely, it’ll just be a legalized extortion scheme disguising what it truly is: A tax increase.
File under: Fraud