Daily Archives: June 26, 2013


Launch of a working group on the Libor

Launch of a working group on the Libor

The Financial Stability Board (FSB), a body mandated by the G20 countries tostrengthen the banking legislation, announced Tuesday, June 25 the launch of a working group to examine the interbank Libor  London Interbank Offered Rate(Libor ) and other indices after the scandal that rocked the reference rate for the financial system.


UC Regents, San Diego governments launch LIBOR lawsuit

UC Regents, San Diego governments launch LIBOR lawsuit

(Reuters) – The Regents of the University of California and the San Diego Association of Governments filed lawsuits in federal courts on Tuesday against more than 20 current and former financial institutions, alleging that they manipulated the London Interbank Offered Rate.

The suits allege financial damages linked to deception regarding the benchmark LIBOR interest rate, said Nanci Nishimura, a partner at the law firm Cotchett, Pitre & McCarthy working both lawsuits.

“They all colluded behind our backs and agreed with each other that they would lie and report a different rate,” Nishimura said.

“Hard working taxpayers got cheated,” Nishimura said. “If they were getting a lower interest rate, they were getting less money than they should have. If they were involved with an instrument where the interest rate was inflated then they could have been paying too much.”

The Bank Of America Account That Refuses To Die

Reader David wants to close his Bank of America account and move on. He was in no hurry: he began the process last spring, and slowly moved regular payments over to an account at a local bank and stopped making deposits in his Bank of America account. He wanted to bring his relationship with the bank to a graceful, amicable close. BoA isn’t interested in an amicable breakup, though. This account simply refuses to close.

He writes:

I never really had a bad experience with Bank of America until last March when I decided to move my accounts to a locally based institution. While I was letting my old accounts dwindle I stopped making deposits in my BOA checking account and thought I had stopped all payments issued from that account.

Long story short, by the time I noticed that I had an insurance payment that had been rejected several times the service fees were about $115 bucks. I decided to go into a branch and close the accounts once and for all and pay any fees at that time. I did go into a main branch in [redacted] and sat with a Customer Service manager and after talking about the account, he said he could wave the fees and if I paid the overdrawn amount (about $12) he would go ahead and close my checking and savings.

I was going to close my credit card accounts at the same time, but thought they had been so accommodating that I would keep both and even switched them over to get better rewards. OK, great.

But not for long. About 2 months later I got a letter from BOA saying my account had not been closed and I owed the original amount with the original fees. This time I called Customer Service, explained that I had closed the accounts and the helpful person did some checking, had me hold for about 25 minutes, then came on to say that it was all settled, no fees and the accounts were definitely closed. Really? Yes, definitely.

Until about 2 weeks ago. I received another letter saying my accounts were not closed and that I still owed the service fees which I had been told twice had been removed. I don’t know what else to do at this point. I am cancelling my cards and plan to spend the rest of my days telling anyone who will listen what a terrible place BOA is to bank, so thought I’d start with you and your readers.

Source: Consumerist


Investigation Shows Politicians Profit off Foreclosure Sales

Investigation Shows Politicians Profit off Foreclosure Sales

When New York State Senator John Sampson was arrested last month for allegedly embezzling $440,000 from foreclosure sales, the curtain pulled back on a little known corner of the state’s justice system – the job of foreclosure referee.

These are the private attorneys state court judges appoint to figure out how much is owed on a mortgage and to oversee any sale at a foreclosure auction.

WNYC spent weeks trying to understand how these court appointees operate — reviewing property records, real estate data and hundreds of court files – and found a system with little oversight, rife with irregularities and dominated by political insiders.

While more than 2,500 attorneys have been eligible to act as referees over the past few years, about 3 percent received a third of the cases, according to a WNYC analysis of data from real estate information service PropertyShark.

Among the attorneys who get the most appointments are current and former state legislators, city council members, county committeemen and judicial delegates.

State court judges – who are themselves elected – have historically rewarded party loyalists with a variety of court appointments, said Adam Skaggs, senior counsel at the Brennan Center for Justice. The more lucrative jobs include guardians and receivers.

“Patronage in the court system in New York has been a problem since the days of Tammany Hall,” Skaggs said. “All too often in New York’s history, again and again and again, these jobs have been given to politically connected cronies of the party bosses, cronies of the judges and it’s been a problem historically throughout the New York Court system.”


Jeff Olson, California Man, Faces 13 Years In Jail For Writing Anti-Big Bank Messages In Chalk

Jeff Olson, California Man, Faces 13 Years In Jail For Writing Anti-Big Bank Messages In Chalk

Jeff Olson, a 40-year-old man from San Diego, Calif., will face jail time for charges stemming from anti-big bank messages he scrawled in water-soluble chalk outside Bank of America branches last year.

The San Diego Reader reported Tuesday that a judge had decided to prohibit Olson’s attorney from “mentioning the First Amendment, free speech, free expression, public forum, expressive conduct, or political speech during the trial.”

With that ruling, Olson must now stand trial on 13 counts of vandalism, charges that together carry a potential 13-year jail sentence and fines of up to $13,000.

“Oh my gosh,” Olson said on his way out of court on Tuesday. “I can’t believe this is happening.”

In an interview with San Diego’s KGTV, Olson maintained that “free speech is protected” and said he “was encouraging folks to close their accounts at big Wall Street banks to transfer their money local nonprofit, community credit unions.”


Senators to Introduce Bill to End Fannie Mae, Freddie Mac

Senators to Introduce Bill to End Fannie Mae, Freddie Mac

A bipartisan group of senators has proposed replacing U.S.-owned mortgage financiers Fannie Mae (FNMA) and Freddie Mac (FMCC) with a newly created government reinsurer.

A bill to be offered by Senators Bob Corker and Mark Warner reflects a prevailing view among lawmakers that the two government-sponsored enterprises should cease to exist while a federal role in backing mortgage lending should remain. Corker, a Tennessee Republican, and Warner, a Virginia Democrat, held a news conference to introduce the measure yesterday.

ormer Executive at Florida-Based Lender Processing Services Inc. Sentenced to Five Years in Prison for Role in Mortgage-Related Document Fraud Scheme

Department of Justice
Office of Public Affairs
Tuesday, June 25, 2013
Former Executive at Florida-Based Lender Processing Services Inc. Sentenced to Five Years in Prison for Role in Mortgage-Related Document Fraud Scheme
Over 1 Million Documents Prepared and Filed with Forged and False Signatures, Fraudulent Notarizations

A former executive of Lender Processing Services Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – was sentenced today to serve five years in prison for her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Middle District of Florida Robert E. O’Neill, and Special Agent in Charge Michelle S. Klimt of the FBI Jacksonville Division.

Lorraine Brown, 56, of Alpharetta, Ga., was sentenced by Senior U.S. District Judge Henry Lee Adams Jr. in the Middle District of Florida. In addition to her prison term, Brown was sentenced to serve two years of supervised release and ordered to pay a fine of $15,000.   On Nov. 20, 2012, Brown pleaded guilty to conspiracy to commit mail and wire fraud.  


“Lorraine Brown will spend five years in prison for her central role in a scheme to fraudulently execute thousands of mortgage-related documents while our nation’s housing market was at its most vulnerable point in generations,” said Acting Assistant Attorney General Raman.  “The documents that were fraudulently produced under Brown’s direction were relied upon in court proceedings, including a significant number of foreclosure and bankruptcy matters. Today’s sentencing represents appropriate punishment for someone who sought to capitalize on the nation’s housing crisis.”


“Floridians were hard hit by the downturn in the real estate market,” said U.S. Attorney O’Neill.  “We will continue to pursue individuals like Brown who took advantage of consumers for personal gain and contributed to the financial crisis.  Prosecuting financial crimes remains a priority for our office.”


“The investigation of sophisticated mortgage and corporate fraud schemes continues to be a priority for the Federal Bureau of Investigation as such criminal activities have a significant economic impact on our community,” said Special Agent in Charge Klimt.

Brown was an executive at LPS and the chief executive of DocX LLC, which was a wholly-owned subsidiary of LPS, until it was closed down in early 2010.   DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes.   Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices.

According to Brown’s plea agreement, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures of authorized personnel on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices.   Only specific personnel at DocX were authorized by clients to sign the documents, but the documents were fraudulently notarized as if actually executed by authorized DocX employees.

According to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit.  Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices.   To further increase profits, DocX also hired temporary workers to act as authorized signers.   These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients.  Some of these temporary workers were able to sign thousands of mortgage-related instruments a day.  Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.        


After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country.  Many of these documents were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions.  Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.


This case is being prosecuted by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida.   This case was investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.   


This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov .