Daily Archives: March 12, 2015

Hammond couple sue Green Tree, JP Morgan, Bank of NY Mellon, and Ocwen over ‘robosigning’ and TILA

A Hammond couple claim in a federal lawsuit that they were victims of “robosigning” and other predatory mortgage practices that left them facing foreclosure.

According to the lawsuit, which was filed in Lake County Superior Court a month ago and was moved to U.S. District Court in Hammond on Tuesday, Pedro and Elisa Rico bought their Hammond house in 1996.

The couple were up to date on their payments, but their lender, Green Tree Servicing, LLC, approached them about refinancing in 1999.

The lawsuit says Green Tree used their son, who was a minor at the time, to translate the terms of the new loan for them, which they thought included a fixed rate over 15 years.

The Ricos say they didn’t learn until a year ago when they received a notice that it actually included a balloon payment of $40,000 due in August 2014.

The Ricos are claiming Green Tree and Bank One used other deceptive practices, such as having documents signed by a notary when they weren’t there and providing false information for Elisa Rico to join the deed on the house so the couple would qualify.

Read on.

And here is information on the Rico’s lawsuit. Case number 2:2015cv00089:

Rico et al v. Green Tree Servicing, LLC et al

Plaintiff: Pedro F. Rico and Elisa F. Rico
Defendant: Green Tree Servicing, LLC, J.P. Morgan Chase Bank, N.A., Bank of New York Mellon and OCWEN Loan Servicing, LLC
Case Number: 2:2015cv00089
Filed: March 10, 2015
Court: Indiana Northern District Court
Office: Hammond Office
County: Lake
Referring Judge: John E Martin
Presiding Judge: Joseph S Van Bokkelen
Nature of Suit: Truth in Lending
Cause of Action: 28:1441 Petition for Removal
Jury Demanded By: Plaintiff

[INFOGRAPHIC]: How Americans Became a Nation of Renters

American renters

Commerzbank to Settle U.S. Allegations of Sanctions and Money-Laundering Violations — Update

German lender Commerzbank AG will pay $1.45 billion to settle allegations of sanctions and money-laundering violations.

The settlement resolves investigations by U.S. and New York state regulators and law enforcement into allegations that the bank had violated laws barring transactions on behalf of Iran and Sudan and abetted a multibillion-dollar securities fraud at Japan-based Olympus Corp.

Read on.

Citigroup cannot process some Argentina bond payments: U.S. judge

A federal judge on Thursday said Citigroup Inc (>> Citigroup Inc) cannot process interest payments by Argentina on some bonds issued under that country’s law, a defeat for the cash-strapped nation as it tries to reenter international debt markets.

U.S. District Judge Thomas Griesa in Manhattan said letting Citigroup process the payments on so-called dollar-denominated exchange bonds would violate a requirement that Argentina treat bondholders equally.

Read on.

Here we go again: Fraud allegations in Office of Juvenile Justice and Delinquency Prevention

By SP Biloxi

It’s been seven years since the Office of Juvenile Justice and Delinquency Prevention (OJJDP)’s grant scandal in the Justice Department. Once again, there is still no changes in the practices. Last year, I wrote a followup piece on the OJJDP. Click here.  In Juvenile Justice Information Exchange website in an article in April of last year, there is still a lack of transparency existed for all federal grants to show a fairness in competition. And now, in a January article in the Juvenile Justice Information Exchange website, Senator Chuck Grassley has demanded the Justice Department to respond to fraud allegations of payments of grant money within the OJJDP:

U.S. Sen. Charles E. Grassley has asked the Justice Department to respond to whistleblowers’ claims that it fraudulently paid millions of dollars in grant money to states that should not have received the money because they incarcerated nonviolent juvenile offenders with adults in violation of federal law.

In a six-page letter sent Wednesday to Assistant Attorney General Karol Mason, who heads the Office of Justice Programs, Grassley detailed the allegations that the federal Office of Juvenile Justice and Delinquency Prevention (OJJDP) had knowingly violated federal law by giving the grants to states that incarcerated runaway youth, foster children and other “vulnerable minors.”

“Most disturbingly, whistleblowers allege that OJJDP’s exercise of this policy is not limited to the correction of clerical errors or other innocent mistakes arising from states’ misunderstanding of reporting requirements,” wrote Grassley, an Iowa Republican who took over this month as chairman of the Senate Judiciary Committee.

The letter, which requested a written response from Mason by Feb. 6, named Wisconsin and said the allegations also focused on four other states or territories but did not disclose which ones.

The offices of Mason and OJJDP Administrator Robert Listenbee did not immediately comment in response to a JJIE request Thursday morning.

Wednesday’s letter follows a September letter from Grassley to Listenbee in which the senator wrote:  “I have been contacted by multiple whistleblowers who allege that grants have been fraudulently obtained from [OJJDP] in the amount of at least $7 million since 2000. …

“Alarmingly,” the September letter stated, “the whistleblowers also allege that they suffered retaliation when they attempted to raise this issue internally and were actively discouraged from investigating these alleged abuses.”

On March 10, 2015, Senator Grassley posted an update on the ongoing investigation into OJJDP on the Senator’s office website:

Mar 10, 2015

WASHINGTON – ‎The Department of Justice’s Office of Justice Programs allegedly made personnel decisions in an attempt to discourage cooperation with ongoing inquiries from Senator Chuck Grassley of Iowa, Chairman of the Judiciary Committee, regarding claims that the office awarded millions of taxpayer dollars to states that incarcerated youth in violation of federal grant requirements. In a letter to Assistant Attorney General Karol Mason, Grassley requested detailed explanations for whistleblower claims that OJP temporarily transferred employees with knowledge of the alleged violations to other offices, prevented employees suspected of  cooperating in the investigation from applying to posts in the office’s compliance monitoring unit, and allowed officials implicated in the investigation to improperly influence it.

In several letters to Mason, Grassley expressed concern that the Office of Juvenile Justice and Delinquency Prevention within the OJP may have knowingly and continually provided grant funds to multiple states that violated a number of grant requirements, some of which are intended to protect minors from being incarcerated with adults.

A signed copy of the letter is available here.  Text of the letter is below.
March 9, 2015


Karol Mason                            
Assistant Attorney General
Office of Justice Programs¬¬
U.S. Department of Justice

Dear Assistant Attorney General Mason:

On September 5, 2014, January 14, 2015, and February 27, 2015, I wrote to the Office of Juvenile Justice and Delinquency Prevention (OJJDP) within the Office of Justice Programs (OJP) regarding allegations that OJJDP knowingly granted millions of taxpayer dollars to states that incarcerated runaway youth, foster youth, and other vulnerable minors in violation of the Juvenile Justice and Delinquency Prevention Act (JJDPA).  

In response to my request that you notify employees of their rights to cooperate with the Judiciary Committee’s inquiry, the Department of Justice asserted that its “current procedures for advising employees of their rights regarding whistleblower protections are sufficient[.]”  

However, whistleblowers allege that OJJDP management has impeded this Committee’s inquiry by: (1) detailing certain employees with knowledge of these matters to the Bureau of Prisons; (2) preventing employees suspected of cooperating in this investigation from even applying for positions on a newly created compliance monitoring unit within OJJDP; and (3) allowing certain Office of General Counsel officials who are the subjects of some of these allegations from improperly influencing a review of those very allegations.

Please provide a detailed response to each of these three allegations by March 20, 2015.

As you may be aware, obstructing a Congressional investigation is a crime.   Also, “the right of employees, individually or collectively, to petition Congress or a Member of Congress, or to furnish information to either House of Congress, or to a committee or Member thereof, may not be interfered with or denied.”   In addition, the “anti-gag” appropriations rider provides: 

No part of any appropriation contained in this or any other Act shall be available for the payment of the salary of any officer or employee of the Federal Government, who . . .  prohibits or prevents, or attempts or threatens to prohibit or prevent, any other officer or employee of the Federal Government from having any direct oral or written communication or contact with any Member, committee, or subcommittee of the Congress in connection with any matter pertaining to the employment of such other officer or employee or pertaining to the department or agency of such other officer or employee in any way, irrespective of whether such communication or contact is at the initiative of such other officer or employee or in response to the request or inquiry of such Member, committee, or subcommittee. 

Pursuant to 5 U.S.C. § 2302 (b)(8): 

Any employee who has authority to take, direct others to take, recommend, or approve any personnel action, shall not, with respect to such authority [] take or fail to take, or threaten to take or fail to take, a personnel action with respect to any employee or applicant for employment because of [] any disclosure of information by an employee or applicant which the employee or applicant reasonably believes evidences— [] any violation of any law, rule, or regulation, or [] gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, if such disclosure is not specifically prohibited by law and if such information is not specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs . . . .

Finally, I want to make clear that any OJP employees, including Union representatives, should be free to have direct contact with this Committee without fear of retaliation.

If you have any questions, please contact Jay Lim of my staff at (202) 224-5225.  


Charles E. Grassley
cc:    Michael E. Horowitz
Inspector General, U.S. Department of Justice 
Carolyn N. Lerner
Special Counsel, U.S. Office of Special Counsel

To be fair, much of the allegations in the year of 2000’s as stated in Senator Grassley’s investigation was under the Bush Administration. And now it is carried into the Obama Administration. Keep in mind that much of the OJJDP scandal of misappropriating the grant monies  was under the watch of former OJJDP Administrator J. Robert Flores who was appointed by then President George W. Bush in 2002. Flores resigned in 2008. But, as of today, there is still no process of improvement to strengthen the core requirements in the OJJDP and end the cronyism in the department.

Legislation to Extend Tax Relief to Distressed Homeowners Currently in House, Senate Committees

Two similar pieces of legislation introduced last month in the House and Senate that would extend tax relief to homeowners who are underwater on their mortgage loans have been referred to committees and are waiting to be heard.

Congressman Tom Reed (R-New York) introduced the Mortgage Forgiveness Tax Relief Act of 2015 (H.R. 1002) on February 13, and that bill is now being heard in the House Committee on Ways and Means. Two weeks later, Senators Debbie Stabenow (D-Michigan) and Dean Heller (R-Nevada) introduced a similar bill (S. 608), which is currently in the Senate Banking Committee. Both bills would extend relief to homeowners on forgiven mortgage debt – the remaining mortgage balance when a borrower sells a home in a short sale to avoid foreclosure. The bills would allow homeowners to exclude the forgiven debt from federal income tax forms and not report it as earned income.

Without such legislation, distressed and underwater homeowners would be required to report the amount of mortgage debt forgiven in a short sale as taxable income.

Read on.

Former RBS trader pleads guilty in U.S. to cheating customers

(Reuters) – A bond trader pleaded guilty on Wednesday to conspiring to defraud Royal Bank of Scotland Group Plc (>> Royal Bank of Scotland Group plc) customers by lying about the prices of bond transactions he handled for them in an effort to boost the bank’s profit.

Matthew Katke, 34, of New York, pleaded guilty to one count of conspiracy to commit securities fraud and will cooperate with prosecutors, U.S. Attorney Deirdre Daly in Connecticut said.

The plea came one year after a federal jury in New Haven, Connecticut in a similar case convicted former Jefferies Group Inc managing director Jesse Litvak for cheating his customers on prices of mortgage-backed securities.

Read on.