Daily Archives: February 19, 2015

South Florida couple claims Wells Fargo engaged in fraud

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A South Florida couple claims Wells Fargo engaged in fraud when it accepted thousands of dollars in exchange for a promise of a permanent loan modification never delivered.

The federal lawsuit centers on the issue of a Trial Period Plan (TPP).

When Jade and George Giourgas bought their home in 2002, they never imagined years later they’d been fending off a foreclosure.

“This was our dream to have a house,” Giourgas said. “This is home to us. I don’t know what else to say. This is hard.”

In February 2009, George Giourgas was laid off from his employment.

“When my husband lost his job, I couldn’t make the payments,” she said.

In the years that followed, while the couple looked for relief under various banking problems, George Giourgas suffered a heart attack and their son developed a chronic medical condition.

“We started getting bills for all the different doctor’s services,” she said.

Juggling it all on a teacher’s salary was tough.

“It’s been very stressful,” Jade Giourgas said. “It’s just been very overwhelming. Very overwhelming.”

THE TPP – TRIAL PERIOD PLAN

Then they received an offer from Wells Fargo called a “Trial Period Plan.” The letter begins by stating, “Wells Fargo Home Mortgage wants to continue to work with you to modify your mortgage.” According to the letter, the family “must make new monthly ‘trial period payments’ in place of (their) normal monthly mortgage payments” at a little more than $2,000 and “after all trial period payments are made, (their) mortgage will be permanently modified.”

“It felt like it was Christmas, you know, I cried. And we even sent the payments way ahead of time,” Giourgas said. “We were just very excited.”

But she said after making those three payments, and then several more, Wells Fargo worked to reschedule the foreclosure sale and no permanent loan modification was granted.

“It felt like the rug got pulled from under us. Because of the fact that I’ve given them everything and they still said, ‘No, you’re denied,'” she said. “It was very frustrating. Because you’re going through this modification process, you’re doing what the bank asks you to do because we’re told to trust the bank.”

“These are not the same banks we had growing up,” said Bruce Jacobs, an attorney who specializes in real estate and debt litigation. “The days of trusting banks are over.”

Read on.

Links to cases on this legal issue:
Wigod v. Wells Fargo Bank
Young v. Wells Fargo Bank
Corvello v. Wells Fargo Bank
Topchian v JP Morgan Chase Bank
Neil v. Wells Fargo
Bloch v. Wells Fargo
Senator v. JP Morgan Chase

San Jose: Former Wells Fargo manager pleads guilty to fraud, theft

SAN JOSE – A former lending manager at a Wells Fargo bank branch in San Jose has pleaded guilty to four counts of defrauding the bank and two counts of theft by a bank officer.

Sharon Lynn Shaw, 67, of San Jose, entered the guilty plea to all six counts in a 2014 indictment before U.S. District Judge Beth Freeman in San Jose on Tuesday.

Read on.

JP Morgan is building a new facility to fight cybercrime near the NSA’s headquarters to attract new talent

In the days following the massive breach of JPMorgan Chase’s computers last summer, the bank’s security chief, James Cummings, rarely left his operations center in its Manhattan headquarters. He directed a select group of colleagues to search for links to the Russian government. There was little evidence of a government tie, especially so early in the investigation, but Cummings, a former head of the U.S. Air Force’s cybercombat unit, was confident they’d find more.

Convinced that it faces threats from governments in China, Iran, and Russia, and that the U.S. government isn’t doing enough to help, JPMorgan has built a vast security operation and staffed it increasingly with ex-military officers. Soon after joining the bank in early 2014, Cummings helped hire Gregory Rattray—like Cummings, a former Air Force colonel—as chief information security officer. Together the men oversee a digital security staff of 1,000, more than twice the size of Google’s security group. To make it easier to woo military talent, the bank built a security services facility in Maryland near Fort Meade, home of the National Security Agency.

The military overtones are no accident. JPMorgan is responding to attacks that the federal government is unable or unwilling to stop, says Nate Freier, research professor at the U.S. Army War College, yet it isn’t clear whether the bank’s weapons-grade operation is doing a better job than law enforcement agencies. “It’s a brave new world that’s not very well understood by the people playing the game,” Freier says. “It really is every man for himself.”

The bank hasn’t said publicly who it believes is responsible for the June attack, in which hackers stole the names, addresses, and e-mail addresses—but not credit card numbers or passwords—of 83 million individuals and small businesses. Several people connected to the probe say Cummings and Rattray strongly suspected very early that it was engineered by the Kremlin. That message was delivered through back channels to the White House, according to a senior U.S. official.

Read on.

OSCEOLA COUNTY, FLORIDA CLERK HOLDS PRESS CONFERENCE AT THE COUNTY SHERIFF’S OFFICE!

Years after blowing the whistle on Countrywide, Michael Winston is bogged down in the courts, and fighting for his life

One man’s story in particular highlights just about everything that can go wrong when you give evidence against your bosses in America: former Countrywide/Bank of America whistleblower Michael Winston.

I visited with Michael in California last year and spoke with him over the phone several times in recent weeks. If you think you’ve had a tough year, wait until you hear his story.

Two years ago this month, Winston was being celebrated in the news as a hero. He’d blown the whistle on Countrywide Financial, the bent mortgage lender that one could plausibly argue nearly blew up the global economy in the last decade with its reckless subprime lending practices.

He described Countrywide’s crazy plan to give anyone who could breathe a mortgage in a memorable January, 2013 episode of Frontline called “The Untouchables,” a show that caught the eyes of several influential politicians in Washington. The documentary inspired Senate hearings and even the crafting of new legislation to combat too-big-to-jail corruption in the financial world.

Winston was later featured in the New York Times as the man who “conquered Countrywide.” David Dayen of Salon described Winston as “Wall Street’s greatest enemy.”

But today, Winston is tasting the sometimes-extreme downside of being a whistleblower in modern America.

“Anyone thinking about becoming a whistleblower looks at what happened to whistleblowers before,” says Fleischmann.

He says he’s spent over a million dollars fighting Countrywide (and the firm that acquired it, Bank of America) in court. At first, that fight proved a good gamble, as a jury granted him a multi-million-dollar award for retaliation and wrongful termination.

But after Winston won that case, an appellate judge not only wiped out that jury verdict, but allowed Bank of America to counterattack him with a vengeance.

Last summer, the bank vindictively put a lien on Winston’s house (one he’d bought, ironically, with a Countrywide mortgage). The bank eventually beat him for nearly $98,000 in court costs.

That single transaction means a good guy in the crisis drama, Winston, had by the end of 2014 paid a larger individual penalty than virtually every wrongdoer connected with the financial collapse of 2008.

When Winston protested his preposterous punishment on the grounds that a trillion-dollar company recouping legal fees from an unemployed whistleblower was unreasonable and unnecessary, a California Superior Court judge denied his argument — get this — on the grounds that Winston failed to prove a disparity in resources between himself and Bank of America!

This is from the court’s ruling:

Plaintiff argues that the disparity in the resources between the individual plaintiff and the defendant Bank of America make it unfair to place the cost of the premium on plaintiff. Plaintiff offered no evidence in support of this argument; it is rejected.

“I mean, Carlos Slim, the world’s richest individual, is nothing next to Bank of America,” says Winston today. “I just have to shake my head at all of it.”

An articulate, well-educated family man who speaks with great pride about his two grown children, who’ve stood by him throughout his troubles, Winston’s life has been turned upside down by his experience.

“I’ve never in my life not worked, but I’m unemployable now,” says Winston, a longtime high-level executive at blue-chip corporations like McDonnell-Douglas and Lockheed Martin. Although he spent most of a lifetime scrupulously saving, he says he’s “worried now that there will be a time when I won’t be able to support my family.”

Even worse, while the bank was going after his savings, Winston was diagnosed with laryngeal cancer. He has been undergoing painful treatment ever since and is literally fighting for his life now, on top of everything else.

“It’s been a very difficult year,” he says.

Yet Winston would likely bear all of this more easily were it not for bitterness over the fact that the sacrifices of whistleblowers like himself have too often resulted in dead ends or worse in recent years.

Read more: http://www.rollingstone.com/politics/news/a-whistleblowers-horror-story-20150218#ixzz3SAKcE9Kk

NYU Professor Uncovers How The FDA Systematically Covers Up Fraud & Misconduct In Drug Trials

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

That misconduct happens isn’t shocking. What is: When the FDA finds scientific fraud or misconduct, the agency doesn’t notify the public, the medical establishment, or even the scientific community that the results of a medical experiment are not to be trusted. On the contrary. For more than a decade, the FDA has shown a pattern of burying the details of misconduct. As a result, nobody ever finds out which data is bogus, which experiments are tainted, and which drugs might be on the market under false pretenses. The FDA has repeatedly hidden evidence of scientific fraud not just from the public, but also from its most trusted scientific advisers, even as they were deciding whether or not a new drug should be allowed on the market. Even a congressional panel investigating a case of fraud regarding a dangerous drug couldn’t get forthright answers. For an agency devoted to protecting the public from bogus medical science, the FDA seems to be spending an awful lot of effort protecting the perpetrators of bogus science from the public.

The sworn purpose of the FDA is to protect the public health, to assure us that all the drugs on the market are proven safe and effective by reputable scientific trials. Yet, over and over again, the agency has proven itself willing to keep scientists, doctors, and the public in the dark about incidents when those scientific trials turn out to be less than reputable. It does so not only by passive silence, but by active deception. And despite being called out numerous times over the years for its bad behavior, including from some very pissed-off members of Congress, the agency is stubbornly resistant to change. It’s a sign that the FDA is deeply captured, drawn firmly into the orbit of the pharmaceutical industry that it’s supposed to regulate. We can no longer hope that the situation will get better without firm action from the legislature.

From the Slate article: Are Your Medications Safe?

From Slate:

Agents of the Food and Drug Administration know better than anyone else just how bad scientific misbehavior can get. Reading the FDA’s inspection files feels almost like watching a highlights reel from a Scientists Gone Wildvideo. It’s a seemingly endless stream of lurid vignettes—each of which catches a medical researcher in an unguarded moment, succumbing to the temptation to do things he knows he really shouldn’t be doing. Faked X-ray reportsForged retinal scansPhony lab testsSecretly amputated limbs. All done in the name of science when researchers thought that nobody was watching.

That misconduct happens isn’t shocking. What is: When the FDA finds scientific fraud or misconduct, the agency doesn’t notify the public, the medical establishment, or even the scientific community that the results of a medical experiment are not to be trusted. On the contrary. For more than a decade, the FDA has shown a pattern of burying the details of misconduct. As a result, nobody ever finds out which data is bogus, which experiments are tainted, and which drugs might be on the market under false pretenses. The FDA has repeatedly hidden evidence of scientific fraud not just from the public, but also from its most trusted scientific advisers, even as they were deciding whether or not a new drug should be allowed on the market. Even a congressional panel investigating a case of fraud regarding a dangerous drug couldn’t get forthright answers. For an agency devoted to protecting the public from bogus medical science, the FDA seems to be spending an awful lot of effort protecting the perpetrators of bogus science from the public.

We didn’t have to search very hard to find FDA burying evidence of research misconduct. Just look at any document related to an FDA inspection. As part of the new drug application process, or, more rarely, when the agency gets a tipoff of wrongdoing, the FDA sends a bunch of inspectors out to clinical sites to make sure that everything is done by the book. When there are problems, the FDA generates a lot of paperwork—what are called form 483s, Establishment Inspection Reports, and in the worst cases, what are known as Warning Letters. If you manage to get your hands on these documents, you’ll see that, most of the time, key portions are redacted: information that describes what drug the researcher was studying, the name of the study, and precisely how the misconduct affected the quality of the data are all blacked out. These redactions make it all but impossible to figure out which study is tainted. My students and I looked at FDA documents relating to roughly 600 clinical trials in which one of the researchers running the trial failed an FDA inspection. In only roughly 100 cases were we able to figure out which study, which drug, and which pharmaceutical company were involved. (We cracked a bunch of the redactions by cross-referencing the documents with clinical trials data, checking various other databases, and using carefully crafted Google searches.) For the other 500, the FDA was successfully able to shield the drugmaker (and the study sponsor) from public exposure.

Dallas Bank Complains of Sloppy Legal Work

(CN) – “Countless mistakes” by law firm Winstead PC on a $62 million loan workout and foreclosure caused a client big problems, NexBank says in court.
Winstead is the sole defendant to the action filed Feb. 13 in Dallas County District Court, which is rooted in NexBank’s loan of $62 million in 2007 to finance a borrower’s purchase of two office buildings on a corner of Luna Road and Interstate 635, in Farmers Branch, Texas.
Dallas-based NexBank claims to have retained Winstead when this borrower indicated in late 2008 “that it would be unable to repay the two-year loan that was set to mature in January 2009.”
Highland Capital Management, as special servicer for noteholders on the loan, joins NexBank as a plaintiff in the action.
They say chose Winstead because of “its purported specialized expertise and extensive experience with similar complicated loan transactions involving multiple domestic and foreign participants, and agency and special servicing relationships.”
Though they paid Winstead “premium fees for premium work,” the firm’s shoddy performance “resulted in numerous challenges to plaintiffs’ efforts to foreclose upon its collateral and collect a deficiency judgment from the guarantor,” the complaint alleges.

Read on.