U.S. Pursues One of the Biggest Mortgage-Fraud Probes Since the Financial Crisis

At issue is whether income from apartment complexes was falsified to support larger loans–which often became part of mortgage securities.

Owners of an apartment complex near Pittsburgh, who wanted to take out a mortgage on the buildings, allegedly made vacant units look occupied by turning on radios, placing shoes and mats outside doors and in one instance having a woman tell inspectors her boyfriend was asleep inside.

The owners obtained a $45.8 million loan, which was wrapped into mortgage securities and sold to investors.


Read on.


Former JPMorgan Chase banker jailed for four years for selling customers’ confidential information

According to the U.S. Attorney’s for the Eastern District of New York, Peter Persaud pleaded guilty to aggravated identity theft in connection with access device fraud and was sentenced to 48 months in jail.

Court documents showed that between 2011 and 2015, Persaud sold customers’ personal identifying information and account information to others, or used it himself, to make unauthorized withdrawals from customers’ accounts.

According to authorities, Persaud’s scheme was discovered when he sold sensitive customer information to a confidential informant in 2014, and later to an undercover law enforcement officer in 2015.

Court documents showed that Persaud told the undercover officer that needed to “take it easy” otherwise Chase might realize he had accessed all of the bank accounts that “got hit” by the questionable withdrawals.

Persaud also offered the undercover officer the identifying information for a client’s bank account that contained more than $180,000.

Persaud pleaded guilty on March 7, 2017.

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Another bank whistleblower case, this time at Goldman Sachs

NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N) was sued on Thursday by a former managing director who said the Wall Street bank retaliated against him and fired him after he complained about its dealings with an unidentified, “notorious European businessman.”

Christopher Rollins, now chief executive of BTIG Ltd, a London-based unit of investment banking and trading firm BTIG LLC, is seeking at least $50 million plus punitive damages in his complaint filed with the U.S. District Court in Manhattan.

The 2000 Harvard University graduate accused Goldman and Jim Esposito, promoted this week to global co-head of its trading business, of violating his rights as a whistleblower under the federal Dodd-Frank law, and also accused Goldman of defamation.

“The suit is without merit and we intend to vigorously contest it,” Goldman spokesman Michael DuVally said in an email, responding to a request for comment on behalf of the defendants and several bankers named in the complaint.

DuVally referred to a filing with a U.S. brokerage regulator that said Goldman discharged Rollins after he allowed unauthorized trades by a counterparty that had been denied a trading account because of compliance concerns.

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Feds Bring Inside Trading Charges Against NY Congressman

Geoffrey Berman, US attorney for the Southern District of New York, gestures to a chart during a news conference in New York.


Here is the court document. Click here.

Wells Fargo reveals software error wrongly denied much-needed mortgage modifications

Big bank sets aside $8 million for remediation

Wells Fargo revealed Friday that an error in its mortgage underwriting software led to hundreds of improperly denied mortgage modifications for borrowers facing foreclosure over a five-year period.

The disclosure was made in the bank’s 10-Q quarterly filing with the Securities and Exchange Commission, and the contents of the filing were first reported by Reuters.

As the Reuters report notes, Wells Fargo disclosed in the SEC filing that a review of its use of a mortgage modification underwriting tool found a “calculation error” that affected certain mortgages that were in the foreclosure process between April 13, 2010 and Oct. 20, 2015.

According to Wells Fargo, the error caused an automated miscalculation of attorneys’ fees that were used to then determine whether a borrower qualified for a loan modification with Fannie Mae or Freddie Mac, or under the terms of the government’s Home Affordable Modification Program.

In the SEC filing, Wells Fargo said that the borrowers were not actually charged the attorneys’ fees in question.

As a result of the error, approximately 625 customers were incorrectly denied a mortgage modification or were not offered one in cases where they would have qualified if not for the error.

And of those roughly 625 customers, approximately 400 of them were foreclosed upon after the loan modification was incorrectly denied or not offered as a result of the underwriting software error.

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Kansas Family Has Accounts Frozen by Bank of America After Being Asked About Citizenship Status

A Kansas family said their bank accounts were frozen by Bank of America after officials ask they prove they were American citizens.

Josh Collins, of Roeland Park, received in June a form letter in the mail from Bank of America that asked a series of personal questions, including if he were an American citizen or had dual citizenship with another country, he told The Kansas City Star.

Collins’ wife, Jessica Salazar Collins, threw out the letter after she and her husband wrote it off as “a scam.”

Collins, who had held an account with Bank of America for 20 years, was born in Wichita, Kansas. Salazar Collins was born in Kansas City, Missouri, tracing her

roots back in the U.S. two generations, as her great-grandfather emigrated from Mexico.

Then last Tuesday, the family found they couldn’t access their money.

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Woman has her safety deposit box at BofA emptied out. Bank replies: Hey thanks for the update!

ORANGEVALE (CBS13) – A woman says her bank let her safe deposit box vanish. And she’s not the only one.

Susan Nomi says when she went to open her Bank of America safe deposit box of 16 years, the entire box was gone.

That’s where she kept her family’s jewelry and her dad’s coin collection.

“I was in shock; I was just like what happened to my box,” said Nomi.

She says Bank of America can’t explain where her valuables went.

“They don’t have an answer. They don’t have an answer. They say thanks for letting us know,” she says.

Nomi was infuriated, especially considering she is a retired Bank of America employee of 40 years. And she’s not alone. Others have complained that Bank of America drilled their safe deposit boxes without permission or notice.

Wendy Woo says her belongings were taken out of her safe deposit box and shipped to her.

“Everything was dumped in a plastic bag,” said Woo.

Read on.