Daily Archives: August 21, 2012


BUFFALO, NY—U.S. Attorney William J. Hochul, Jr. announced today that Timothy McCabe, 47, and Theresa Morales, 48, both of Hypoluxo, Florida, were indicted by a federal grand jury for bank fraud. The charge carries a maximum penalty of 30 years in prison, a $1,000,000 fine, or both.

Assistant U.S. Attorneys Maura K. O’Donnell and Kathleen A. Lynch, who are handling the case, stated thataccording to the indictment, the defendants submitted a fraudulent loan application to a financial institution, JPMorgan Chase Bank, to obtain a $560,000 mortgage on a property in Lewiston, New York. The defendants, who are husband and wife, provided false information in the loan application as to employment, salary, and residency. The defendants conduct resulted in foreclosure on the property.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The indictment is the result of an investigation by the Mortgage Fraud Task Force of WNY which includes agents and personnel from the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast; the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Robert Bethel; the Housing and Urban Development Office of Inspector General, under the direction of Cary Rubenstein, Special Agent in Charge, New York Region; and the Internal Revenue Service, under the direction of Acting Special Agent in Charge Toni Weirauch. The Mortgage Fraud Task Force of WNY is led by the U.S. Attorney’s Office and also includes Veterans Affairs Office of Inspector General and the U.S. Bankruptcy Trustee.

SOURCE: http://www.fbi.gov

Former Freddie execs use subprime definition to challenge SEC case

The definition of subprime is not clear and because of the word’s ambiguity, former Freddie Mac executives believe a Securities and Exchange Commission securities fraud case filed against them should be dismissed, according to the Washington Business Journal.

The case is capturing headlines, with the Wall Street Journal saying the dismissal battle is a fight over semantics.  And that big semantics fight played out in court Monday.

The question that U.S. District Judge Richard Sullivan must answer is whether his interpretation of the word subprime would summarily lead him to conclude that there’s a possibility three former Freddie Mac executives misled investors about the underwriting quality of loans backing mortgage securities.

In the original case, the SEC went after former Freddie executives saying they made false and misleading statements about mortgages packed into securities sold off to investors.

The definition of subprime is key in the case because the executives claim they never used the words subprime or prime to identify the quality of loans, the WSJ reported.

Click here to read more in the Washington Business Journal.


Who is responsible for foreclosed homes? | Marketplace.org

Who is responsible for foreclosed homes? | Marketplace.org.

An LAPD police officer gives a tour of his precinct in Watts and the blight foreclosed homes have wrought upon the neighborhood. The City of Los Angeles says the banks who own the homes should be responsible for the upkeep of the foreclosures.

The unrepentant and unreformed bankers

Money laundering. Price fixing. Bid rigging. Securities fraud. Talking about the mob? No, unfortunately. Wall Street.

These days, the business sections of newspapers read like rap sheets. GE Capital, JPMorgan Chase, UBS, Wells Fargo and Bank of America tied to a bid-rigging scheme to bilk cities and towns out of interest earnings. ING DirectHSBC and Standard Chartered Bank facing charges of money laundering. Barclays caught manipulating a key interest rate, costing savers and investors dearly, with a raft of other big banks also under investigation. Not to speak of the unprecedented wrongdoing that precipitated the financial crisis of 2008.

Evidence gathered by the Financial Crisis Inquiry Commission clearly demonstrated that the financial crisis was avoidable and due, in no small part, to recklessness and ethical breaches on Wall Street. Yet, it’s clear that the unrepentant and the unreformed are still all too present within our banking system.

Read more: http://www.sfgate.com/opinion/article/The-unrepentant-and-unreformed-bankers-3798261.php#ixzz24CUfcpCZ

GOP platform leaves out mortgage-interest tax deduction

The mortgage-interest tax deduction failed to make it into the Republican party’s economic platform after the party opted for a simpler tax code, with fewer reductions, according to The Wall Street Journal.

At one point, members of the GOP launched a proposal backing the inclusion of the deduction into the party’s platform. If it had been accepted, the party would have adopted the “We must preserve the mortgage interest deduction” line into its official economic plan.

Instead, the proposal created a dividing line between GOP members who see the deduction as a crucial stepping stone to homeownership and party leaders who believe a simpler tax code is needed overall.

Click here to read more.

Wall Street Leaderless in Rules Fight as Dimon Diminished

Wall Street, the global financial community reeling from public outrage and increased regulation, is proving incapable of finding a champion to replace sidelinedJPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon.
Dimon, 56, one of the industry’s most forceful advocates, has lost stature as his bank, the largest in the U.S. by assets, juggles multiple investigations and a $5.8 billion trading loss on wrong-way bets on credit derivatives. His peers at other big lenders are hobbled by poor performance, tarnished reputations or a reluctance to step into the breach.
Read on.

Bank of America To Keep ‘Zombie’ Checking Accounts Closed In Policy Shift

NEW YORK — Bank of America said it will stop zombie checking accounts from coming back to life when they receive an automated electronic transaction.
Starting this week, the bank will no longer allow electronic deposits or debits to reopen a closed checking account, according to bank spokeswoman Betty Reiss.
“We have been looking at [the change] since late last year and it just went into effect this week,” Reiss told The Huffington Post by phone on Monday. The new rule marks a shift in bank policy, which previously allowed electronic transactions to reactivate an account after the customer had closed it. Reiss said the change was based on customer feedback.
The Charlotte, N.C.-based bank wasn’t alone in allowing electronic transactions to reopen old accounts. Complaints about checking accounts rising from the dead have long been a source of contention between customers and banks.

Read on.