The Securities and Exchange Commission has charged former Countrywide Financial Chief Executive Angelo Mozilo with fraud because, according to the civil complaint filed against him, he figured out before everyone else that giving loans to people who couldn’t pay them back was a bad idea.

The problem is that he only mentioned his discovery to a few close colleagues.

In 2006, for instance, in an internal Countrywide email, Mozilo described one of his company’s popular new mortgage inventions that allowed people with less than stellar credit to purchase homes with no money down as “the most dangerous product in existence.”

This product had become “dangerous” because the Wall Street banks that earlier in the decade had gobbled up bundles of repackaged subprime mortgages as housing prices soared had begun to realize the folly of their ways and were starting to demand that Countrywide buy back the loans.

Toward the end of 2006 housing prices started leveling off and then falling, and the number of mortgage defaults began climbing.

Mozilo summed up the growing panic within the executive suites at Countrywide in a Sept. 2006 email to an underling: “The bottom line is that we are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales.”

It was about that time that Mozilo started selling off his Countrywide stock -- $140 million in all, according to the SEC.

Meanwhile, Mozilo and his colleagues neglected to share their concerns with investors who were buying Countrywide stock but not privy to the shocking fragility of the company’s loan portfolio. Indeed, according to the SEC, Countrywide portrayed itself to investors as a safe alternative to other mortgage lenders that were doling out money willy-nilly.

Just for the record, in 2005 Mozilo was paid $57 million by Countrywide, and he reportedly earned an estimated $387 million during the peak years of the U.S. housing boom from 2002 through 2006.

So Mozilo is being held up as the poster boy of the subprime loan debacle that led to the crippling global recession now well into its second year.

But even a cursory reading of the SEC complaint filed last week against Mozilo and two of his Countrywide lieutenants, David Sambol and Eric Sieracki, reveals how lies and deception became standard operating procedure from the lowest rungs to the very top of the U.S. mortgage industry.

Surely any trial stemming from these charges will serve as perhaps the seminal primer on how an entire industry corrupted itself in an effort to glean ever greater profits.

The insider trading charges against Mozilo included in the complaint are almost beside the point.

The really interesting allegations stem from Mozilo’s apparent growing realization that his whole company -- and the millions and millions of dollars of profits generated by its newly implemented business model -- were all built on a house of cards.

According to the complaint, between 2005 and 2007 Countrywide “engaged in an unprecedented expansion of its underwriting guidelines.”

In other words, they made a conscious business decision to approve loans to just about anybody who applied for one. And business boomed.

But they couldn’t accomplish this expansion alone.

Countrywide had to have help from everyone along the mortgage making chain, from the millions of home buyers who discovered they could easily lie about their incomes to purchase houses they couldn’t have otherwise afforded, to the numerous Wall Street loan experts who bought packages of subprime mortgages knowing how risky they were but apparently hoping to pass them off to the next buyer.

At the same time, mortgage brokers and home appraisers, working on the front lines of the housing boom, were only too glad to get their new marching orders from loan giants like Countrywide.

The newly lax standards meant bigger fees all around. Brokers could say to just about anyone who wanted to buy a home, “Don’t worry about it, we’ll make the numbers work” because companies like Countrywide were suddenly willing to make the numbers work.

And appraisers worked the middle ground, valuing homes at far more than they were actually worth because anyone could suddenly afford to buy any home.

So the point of all this is not that Mozilo is any less guilty of the charges against him because everyone was doing what he is alleged to have profited so handsomely from.

But rather that he is no better and no worse than the most obscure broker or appraiser who also lined their pockets using the same deceptive practices that quite simply overwhelmed the industry for much of the past decade.

Nor is he any different from the Wall Street hot shots who padded their annual bonuses by buying mortgage backed securities that have since turned toxic, or, for that matter, from the many homeowners forced to default on their home loans after knowingly biting off more than they could chew.

Whether his attorneys can use that as a defense is another issue altogether. But, poster boy or not, Mozilo is hardly the most culpable of all the villains responsible for the subprime mortgage debacle.