Daily Archives: April 29, 2014

Link

G.A.O. Report Sees Deeper Bank Flaws in Foreclosures

G.A.O. Report Sees Deeper Bank Flaws in Foreclosures

Gee, ya think??

A new government report suggests that errors made by banks and their agents during foreclosures might have been significantly higher than was previously believed when regulators halted a national review of the banks’ mortgage servicing operations.

When banking regulators decided to end the independent foreclosure review last year, most banks had not completed the examinations of their mortgage modification and foreclosure practices.

At the time, the regulators — the Office of the Comptroller of the Currency and the Federal Reserve — found that lengthy reviews by bank-hired consultants were delaying compensation getting to borrowers who had suffered through improper modifications and other problems.

But the decision to cut short the review left regulators with limited information about actual harm to borrowers when they negotiated a $10 billion settlement as part of agreements with 15 banks, according to a draft of a report by the Government Accountability Office reviewed by The New York Times.

Link

Suspicious Deaths Of Bankers Are Now Classified As “Trade Secrets” By Federal Regulator

Suspicious Deaths Of Bankers Are Now Classified As “Trade Secrets” By Federal Regulator

Submitted by Pam Martens and Russ Martens of Wall Street On Parade,

It doesn’t get any more Orwellian than this: Wall Street mega banks crash the U.S. financial system in 2008. Hundreds of thousands of financial industry workers lose their jobs. Then, beginning late last year, a rash of suspicious deaths start to occur among current and former bank employees.  Next we learn that four of the Wall Street mega banks likely hold over $680 billion face amount of life insurance on their workers, payable to the banks, not the families. We ask their Federal regulator for the details of this life insurance under a Freedom of Information Act request and we’re told the information constitutes “trade secrets.”

According to the Centers for Disease Control and Prevention, the life expectancy of a 25 year old male with a Bachelor’s degree or higher as of 2006 was 81 years of age. But in the past five months, five highly educated JPMorgan male employees in their 30s and one former employee aged 28, have died under suspicious circumstances, including three of whom allegedly leaped off buildings – a statistical rarity even during the height of the financial crisis in 2008.

There is one other major obstacle to brushing away these deaths as random occurrences – they are not happening at JPMorgan’s closest peer bank – Citigroup. Both JPMorgan and Citigroup are global financial institutions with both commercial banking and investment banking operations. Their employee counts are similar – 260,000 employees for JPMorgan versus 251,000 for Citigroup.

Both JPMorgan and Citigroup also own massive amounts of bank-owned life insurance (BOLI), a controversial practice that pays the corporation when a current or former employee dies. (In the case of former employees, the banks conduct regular “death sweeps” of public records using former employees’ Social Security numbers to learn if a former employee has died and then submits a request for payment of the death benefit to the insurance company.)

Wall Street On Parade carefully researched public death announcements over the past 12 months which named the decedent as a current or former employee of Citigroup or its commercial banking unit, Citibank. We found no data suggesting Citigroup was experiencing the same rash of deaths of young men in their 30s as JPMorgan Chase. Nor did we discover any press reports of leaps from buildings among Citigroup’s workers.

Given the above set of facts, on March 21 of this year, we wrote to the regulator of national banks, the Office of the Comptroller of the Currency (OCC), seeking the following information under the Freedom of Information Act (See OCC Response to Wall Street On Parade’s Request for Banker Death Information):

The number of deaths from 2008 through March 21, 2014 on which JPMorgan Chase collected death benefits; the total face amount of BOLI life insurance in force at JPMorgan; the total number of former and current employees of JPMorgan Chase who are insured under these policies; any peer studies showing the same data comparing JPMorgan Chase with Bank of America, Wells Fargo and Citigroup.

The OCC responded politely by letter dated April 18, after first calling a few days earlier to inform us that we would be getting nothing under the sunshine law request. (On Wall Street, sunshine routinely means dark curtain.) The OCC letter advised that documents relevant to our request were being withheld on the basis that they are “privileged or contains trade secrets, or commercial or financial information, furnished in confidence, that relates to the business, personal, or financial affairs of any person,” or  relate to “a record contained in or related to an examination.”

The ironic reality is that the documents do not pertain to the personal financial affairs of individuals who have a privacy right. Individuals are not going to receive the proceeds of this life insurance for the most part. In many cases, they do not even know that multi-million dollar policies that pay upon their death have been taken out by their employer or former employer. Equally important, JPMorgan is a publicly traded company whose shareholders have a right under securities laws to understand the quality of its earnings – are those earnings coming from traditional banking and investment banking operations or is this ghoulish practice of profiting from the death of workers now a major contributor to profits on Wall Street?

As it turns out, one aspect of the information cavalierly denied to us by the OCC is publicly available to those willing to hunt for it. On March 24 of this year, we reported that JPMorgan Chase held $10.4 billion in BOLI assets at its insured depository bank as of December 31, 2013.

We reached out to BOLI expert, Michael D. Myers, to understand what JPMorgan’s $10.4 billion in BOLI assets at its commercial bank might represent in terms of face amount of life insurance on its workers. Myers said: “Without knowing the length of the investment or its rate of return, it is difficult to estimate the face amount of the insurance coverage.  However, a cash value of $10.4 billion could easily translate into more than $100 billion in actual insurance coverage and possibly two or three times that amount” said Myers, a partner in the Houston, Texas law firm McClanahan Myers Espey, L.L.P.

Myers’ and his firm have represented the families of deceased employees for almost two decades in cases involving corporate-owned life insurance against employers such as Wal-Mart Stores, Inc., Fina Oil and Chemical Co., and American Greetings Corp. (Families may be entitled to the proceeds of these policies if employee consent was required under State law and was never given and/or if the corporation cannot show it had an “insurable interest” in the employee — a tough test to meet if it’s a non key employee or if the employee has left the firm.)

As it turns out, the $10.4 billion significantly understates the amount of money JPMorgan has tied up in seeking to profit from workers’ deaths. Since Wall Street banks are structured as holding companies, we decided to see what type of financial information might be available at the Federal Financial Institutions Examination Council (FFIEC), a federal interagency that promotes uniform reporting standards among banking regulators.

The FFIEC’s web site provided access to the consolidated financial statements of the bank holding companies of not just JPMorgan Chase but all of the largest Wall Street banks. We conducted our own peer review study with the information that was available.

Four of Wall Street’s largest banks hold a total of $68.1 billion in BOLI assets. Using Michael Myers’ approximate 10 to 1 ratio, that would mean that over time, just these four banks could potentially collect upwards of $681 billion in tax free income from life insurance proceeds on their current and former workers. (Death benefits are received tax free as is the buildup in cash value in the policies.) The breakdown in BOLI assets is as follows as of December 31, 2013:

Bank of America    $22.7 billion

Wells Fargo             18.7 billion

JPMorgan Chase      17.9 billion

Citigroup                   8.8 billion

In addition to specifics on the BOLI assets, the consolidated financial statements also showed what each bank was reporting as “Earnings on/increase in value of cash surrender value of life insurance” as of December 31, 2013. Those amounts are as follows:

Bank of America   $625 million

Wells Fargo           566 million

JPMorgan Chase    686 million

Citigroup                     0

Given the size of these numbers, there is another aspect to BOLI that should raise alarm bells among both regulators and shareholders. The Wall Street banks are using a process called “separate accounts” for large amounts of their BOLI assets with reports of some funds never actually leaving the bank and/or being invested in hedge funds, suggesting lessons from the past have not been learned.

FREE MARY MCCULLEY–MORE DETAILS EMERGE

LIBERTY ROAD MEDIA

Free Mary McCulley copy

Edited press release received by LRM:

For the millions who have lost their homes to foreclosure, or are still losing their homes to the “too big to fail” banks, Mary McCulley is a hero. In February she stood up to those who caused the fraud which led to her foreclosure–and won. She obtained a $6 million award–including punitive damages—against US Bank. 

Yet on April 25, 2014, Mary was forcibly hauled off to federal prison for accusations by former American Title Land Company’s  Tom Cahill. Based solely on Cahill’s word, Mary was sentenced to one year in Federal Prison, plus another year of very harsh probation. She was immediately taken away by Federal Marshalls, and reported severe bruising after being roughed up. Mary is 56 years old.

On February 7, 2014, US Bank was found guilty in a jury trial of fraudulently foreclosing on Mary’s home. The jury found proof U.S…

View original post 196 more words

BANKS ARE A THREAT TO SOCIETY, NOT MARY MCCULLEY

Unbelievable..

LIBERTY ROAD MEDIA

Mary McCulley in court 4-25-14

This is unbelievable.  Absurd.  Kafkaesque.

Mary McCulley was sent to jail yesterday because supposedly she is a “public risk” and doesn’t “respect the law”:

“BUTTE – A federal judge chose to give a Kentucky woman a longer prison sentence than recommended after concluding that her impersonation of a federal officer and threatening behavior showed her to be a public risk.

U.S. District Judge Sam. E. Haddon sentenced Mary Ann McCulley, 54, to one year in federal prison and one year of probation for impersonating a federal officer.”

  Meanwhile, great respecters of the law like Jamie Dimon, Lloyd Blankfein, Brian T. Moynihan, and Richard K. Davis walk free.

That last name in the list of bank CEOs–Richard K. Davis–is the CEO of US Bank, against whom McCulley recently was awarded $6 million dollars in punitive and actual damages.  The judge in her case recently denied US Bank’s motion to reduce…

View original post 355 more words

Link

Revolving Door: Another Former Justice Dept. Official to Join Covington

Revolving Door: Another Former Justice Dept. Official to Join Covington

Two blocks separate Covington & Burling’s offices in Washington from the Justice Department’s headquarters. Covington’s roster of lawyers shows a closer link.

Covington, the firm where Eric H. Holder Jr. practiced law before becoming attorney general, will announce on Tuesday that Mythili Raman is the latest former senior Justice Department official to join its ranks. Ms. Raman, who will be a partner in Covington’s white-collar crime and litigation practices, led the Justice Department’s criminal division until last month.

After departing the criminal division, where she oversaw investigations into some of the world’s biggest banks, Ms. Raman followed a well-trod path to Covington. She is the fourth recent criminal division prosecutor to join Covington and the fifth senior official under Mr. Holder to do so. Lanny A. Breuer, her predecessor as chief of the criminal division, is now Covington’s vice chairman.

“Reuniting with my former Justice Department colleagues was one of the biggest draws of Covington,” Ms. Raman, 44, said in an interview. “It was an easy choice.”