Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking

Rolling Stone-

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'”

Fleischmann is a tall, thin, quick-witted securities lawyer in her late thirties, with long blond hair, pale-blue eyes and an infectious sense of humor that has survived some very tough times. She’s had to struggle to find work despite some striking skills and qualifications, a common symptom of a not-so-common condition called being a whistle-blower.

[ROLLING STONE]

He’s done and I hope this opens up more investigations! Was he part of the backdated letters to homeowners?

NY POST-

The real estate tycoon foreclosed on 1,022 houses last quarter through his company Altisource Residential — a record, according to a quarterly presentation released Tuesday.

The skyrocketing foreclosure rate seemingly contradicts statements Erbey made last week that one of his companies’ goals is “to keep people in their homes whenever possible.”

Erbey — chair of at least five companies, including Altisource Residential and mortgage servicer Ocwen Financial — stands to gain handsomely when one of his companies forecloses on more homes, as all his companies primarily do business with one another, industry experts say.

[NEW YORK POST]

Reuters-

A group of funds that threw a monkey wrench in Bank of America Corp’s (BAC.N) proposed $8.5 billion settlement with investors in mortgage-backed securities will object to JPMorgan Chase & Co’s $4.5 billion offer to settle claims over similar investments, according to the lawyer that represents them.

The funds, collateralized debt obligations known as the Triaxx entities, received court permission on Wednesday to intervene in a proceeding seeking judicial approval of the JPMorgan settlement, people close to the case said.

JPMorgan last year reached the $4.5 billion agreement with some 20 institutional investors in 330 residential mortgage-backed securities trusts issued by JPMorgan and Bear Stearns, which the bank took over during the financial crisis.

[REUTERS]

IMAGE Credit: Reuters/Eduardo Munoz

The Blaze-

JP Morgan has set aside another $1 billion to cover penalties for manipulating the foreign exchange market. The bank has paid out billions over regulatory violations and lawsuits in the last two years from the “London Whale” trading scandal to fraudulent sales of mortgage backed securities.

Meanwhile, Jamie Dimon, Wall Street’s darling, remains firmly in command of the fraud infested bank. It doesn’t seem to bother investors how banks make money, as long as the returns keep rolling in. Fines and penalties are merely a cost of doing business.

Back in the days when people were stigmatized for committing fraud, Dimon would have been out the door years ago. Now he is rewarded with oversize bonuses, stock options, and tons of perks. And the fines that JP Morgan has paid out have not gone to the victims; they have gone to the regulators instead.

[THE BLAZE]

(Photo by Diane Bondareff/Invision for JPMorgan Chase/AP Images)

“It was Graber, though, who quietly muscled the deals through behind the scenes.” Not Eric Holder…so what did Holder do? NADA.

Bloomberg-

Geoffrey Graber, the 41-year-old Justice Department attorney tasked with holding Wall Street accountable for the financial crisis, has a message for his prosecutors: Always be closing.

In the past year, Graber has won almost $37 billion in penalties from some of the world’s largest banks, a record haul for prosecutors. To colleagues, he compares his job to that of Blake, the notorious motivational speaker played by Alec Baldwin in David Mamet’s 1992 film Glengarry Glen Ross, who chastises real estate salesmen for failing to lock in deals.

“My role was to identify the most promising cases and accelerate those,” Graber said in an interview. “We’ve done our best to put a short fuse on this.”

[BLOOMBERG]

Photographer: Andrew Harrer/Bloomberg

Commonwealth of Virginia
Office of the Attorney General

For media inquiries only, contact: 
Michael Kelly, Director of Communications
Phone:
Email: mkelly@oag.state.va.us

HERRING BRINGS RECORD $1.15 BILLION LAWSUIT AGAINST BANKS FOR DEFRAUDING VIRGINIA TAXPAYERS

~ Largest suit ever brought under Virginia Fraud Against Taxpayers Act seeks accountability for banks that fraudulently sold mortgage-backed securities to the Virginia Retirement System ~

RICHMOND (September 16, 2014)–Attorney General Mark R. Herring today announced a historic lawsuit against some of the largest commercial banks in the world for fraud committed against Virginia taxpayers during the height of the real estate bubble. A lawsuit unsealed today in Richmond Circuit Court seeks $1.15 billion in damages against thirteen banks that are each accused of fraudulently misleading the Virginia Retirement System (VRS) during the sale of residential mortgage-backed securities (RMBS) to the state retirement fund. The VRS was entitled to accurate information about the underlying mortgages when making decisions on how to invest taxpayer money and contributions by employees. Instead, these large banks purposefully included high-risk mortgages in securities and fraudulently misrepresented the quality of those loans to rating agencies and large investors like VRS. The securities were purchased starting around 2004, and before 2010, Virginia was forced to sell the vast majority of these toxic securities built on junk mortgages and lost $383 million.

In 2013, VRS was funded approximately 66% by Virginia taxpayers and 33% by contributions from state employees, with nearly 600,000 members including 145,000 teachers, 105,000 employees of city and county governments, and 78,000 state employees, as well as state troopers, local law enforcement, and court employees.

This is a rare state-level action brought by an Attorney General to hold banks accountable specifically for damages their fraud and recklessness caused state taxpayers through a public retirement system. It is the largest financial fraud action ever brought by the Commonwealth of Virginia and is the largest case ever brought under the Virginia Fraud Against Taxpayers Act. The Commonwealth will also seek civil penalties against each bank in the amount of $5,500-$11,000 for each violation.

“The message today is clear. It doesn’t matter if you’re a small-time con artist or a multi-billion dollar Wall Street bank. If you try to rip off or defraud Virginia consumers or Virginia taxpayers, you will be caught and you will be held responsible,” said Attorney General Herring. “Every Virginian was harmed by the financial crisis. Homes were lost, retirement accounts were devastated, small businesses saw their credit dry up almost overnight, and state and federal budget cuts hurt vulnerable Virginians. It will take many more years to recover the economic strength and stability we lost, but I will not allow Virginians to be left holding the bag for the reckless, fraudulent business practices of a few big banks who thought they were above the law. These banks lied to Virginia, and taxpayers and state employees lost hundreds of millions of dollars as a result.”

Each bank is alleged to have bundled risky residential mortgages into securities which were then sold to VRS in various quantities. The named banks are:

• Barclays Capital Inc.
• Citigroup Global Markets Inc.
• Countrywide Securities Corporation
• Credit Suisse Securities (USA) LLC
• Deutsche Bank Securities Inc.
• Goldman, Sachs & Co.
• RBS Securities, Inc.
• HSBC Securities (USA) Inc.
• Morgan Stanley & Co. LLC
• UBS Securities LLC
• WAMU Capital Corp.
• J.P. Morgan Securities LLC (and as current owner of Bear, Stearns & Co.)
• Merrill Lynch, Pierce, Fenner & Smith Incorporated(and as current owner of Banc of America Securities LLC)

While the banks offered the securities to VRS as stable, solid investments, an analysis shows that nearly 40% of the 785,000 mortgages backing 220 securities purchased by Virginia’s retirement system were fraudulently misrepresented in a way that made them a significantly higher risk for default. These banks knew, or should have known, that claims they made about the quality of the mortgages were false, but they systematically disregarded and hid their own evaluations, and third-party evaluations, that revealed just how risky these securities were. The Commonwealth of Virginia suffered hundreds of millions in losses after receiving and relying on this false information.

The banks misrepresented the underlying mortgages in the following ways:

1.      Misrepresenting the loan-to-value ratio of mortgages— A higher loan-to-value ratio significantly raises the risk of default. Across all banks, it was claimed that only 23.4% of loans were for more than 80% of the value of the property, when in reality, it was 54%. Additionally, 15% of homes were underwater, with mortgages that exceeded the value of the home.
2.      Misrepresenting the owner occupancy rate of the homes–Borrowers are more likely to default on a home they do not occupy, such as a vacation home or rental property.
3.      Misrepresenting the percentage of homes with a second mortgage–This is a major risk factor for default because borrowers with second loans tend to have fewer assets relative to the amount they have mortgaged.

Hundreds of securities that were offered at AAA or similarly high ratings with a 0.00% mortgage delinquency rate were eventually downgraded significantly as delinquency rates of the mortgages skyrocketed, in some cases as high as 75%.

While the losses to the Virginia Retirement System are estimated at $383 million, the law allows Virginia to seek “treble damages,” or three times the actual damage, as compensation and to deter this kind of conduct. It is expected that money recovered as part of this suit will be returned to Virginia taxpayers and that damages suffered by VRS will be redressed.

The fraud was reported to the Commonwealth using a provision of the Virginia Fraud Against Taxpayers Act which incentivizes and allows whistleblowers to report fraud against Virginia taxpayers. After closely examining the evidence collected by the whistleblower and finding it to be accurate and convincing, Attorney General Herring is bringing the case on behalf of Virginia taxpayers. The whistleblower, a financial modeling and analysis firm called Integra REC, LLC, discovered the fraud using extremely sophisticated proprietary methods to match-up the RMBS purchased by VRS with the actual mortgages and properties they contained.

The case is being handled by Attorney General Herring’s Civil Litigation Division, including Deputy Attorney General Rhodes Ritenour, and Assistant Attorney General Peter E. Broadbent, III.

 # #

(SOURCE: oag.state.va.us)

Where else can you get caught with as much fraud as all these cartels and still stay in business and manage to service government related loans? Only in Amerika! Unfreakin Believable!

So lets get this straight. BOA has paid billions for other fraudulent acts and is saying this is no way, no how tied to fraud? REALLY??

Reuters-

Bank of America Corp on Thursday asked a federal judge to throw out a jury verdict finding it liable for fraud over defective mortgages sold by its Countrywide unit that resulted in a $1.27 billion penalty.

The bank urged U.S. District Judge Jed Rakoff in Manhattan to rule for it as a matter of law or order a new trial, arguing that the evidence at trial did not support the jury’s October 2013 verdict.

Bank of America said prosecutors were required at trial to prove that loans originated by Countrywide Financial Corp in a process called “Hustle” that were then sold to government mortgage finance giants Fannie Mae and Freddie Mac were not as good as the lender represented.

[REUTERS]

Huthsing v Dyck-O’Neal and Consuegra COMPLAINT

Dyck-O’Neal Power of Attorney

Reuters-

A deal to resolve a U.S. regulator’s claims against Goldman Sachs Group Inc over mortgage-backed securities sold to Fannie Mae and Freddie Mac leading up to the financial crisis could cost the bank between $800 million and $1.25 billion, according to a person familiar with the matter.

The person said Goldman Sachs is discussing a settlement with the Federal Housing Finance Agency (FHFA), which filed 18 lawsuits against Goldman and other banks in 2011 over about $200 billion in mortgage-backed securities that later went sour.

Goldman Sachs and the FHFA declined to comment on Saturday.

[REUTERS]

NYT-

The CIT Group, a lender to small and midsize businesses run by John A. Thain, said on Tuesday that it had agreed to acquire the parent company of OneWest Bank for $3.4 billion in cash and stock.

The deal will bolster CIT’s lending abilities by more than doubling its deposit base. OneWest currently manages $15 billion in deposits, as well as $23 billion in assets, including commercial and home mortgages.

It will merge with CIT’s own bank, creating a commercial bank with $28 billion in deposits and $67 billion in assets — putting it above the $50 billion threshold for increased regulatory oversight of banks deemed systemically important.

[NEW YORK TIMES]

Just close these cartels down now…ALL. OF. THEM.

CNBC-

Bank of America has offered $13 billion to settle a probe into mortgage securities sold by the bank, the Wall Street Journal reported, citing people familiar with the matter.

The bank met U.S. Justice Department representatives on Tuesday, but no progress was made toward a final deal, the paper reported.

Bank of America had previously offered about $12 billion to settle the matter, including a portion to help struggling homeowners, while the Justice Department had suggested a $17 billion settlement, sources told Reuters earlier this month.

[CNBC]

Department of Justice

What about the homeowners? Pay very close attention to this suit…chances are you have or had a Frankenstein loan on your house.

Institutional investors including BlackRock Inc and Allianz SE’s Pimco on Wednesday sued six of the largest bond trustees, accusing them of failing to properly oversee more than $2 trillion in mortgage-backed securities issued in the run-up to the 2008 financial crisis.

The lawsuits, filed in New York state court, claim the trustees breached their duties to investors by failing to force lenders and sponsors of the securities to repurchase defective loans, the suits claim.

The investors are seeking damages for losses that exceed $250 billion and relate to over 2,200 residential mortgage-backed securities trusts issued between 2004 and 2008, according to a person familiar with the cases.

[REUTERS]

Contacts

Kahn Swick & Foti, LLC
Lewis Kahn, Managing Partner, 1-877-515-1850
lewis.kahn@ksfcounsel.com
or
Melinda Nicholson, Partner, 1-877-515-1850
melinda.nicholson@ksfcounsel.com

Bloomberg-

U.S. prosecutors are seeking more than $13 billion from Bank of America Corp. to resolve federal and state probes into the lender’s sale of bonds backed by home loans in the run-up to the 2008 financial crisis, according to people familiar with the matter.

The settlement would come on top of the $9.5 billion the bank agreed last month to pay to resolve Federal Housing Finance Agency claims, said two people who asked not to be named because the negotiations are private. A deal could come within the next two months, the people said.

[BLOOMBERG]

HOUSTON, April 7, 2014 – Today, 18 institutional investors represented by Gibbs & Bruns LLP (“Institutional Investors”) announced they have reached an agreement with Citigroup (“Citi”) under which Citi will make a binding offer (“Offer”) to the Trustees of 68 RMBS Trusts issued by Citi to settle mortgage repurchase claims.  The Institutional Investors support the agreement and have asked the Trustees to accept it.  The Trusts included in the Offer are listed on Exhibit “A.”   

The Trustees will have until June 30, 2014 to accept the Offer, which may be extended pursuant to the terms of the Offer for an additional forty-five days.  The Offer includes the following key terms:

1.      Payment by Citi of $1.125 billion in cash to the Trusts to settle mortgage repurchase claims;

2.      Reimbursement to the Trustees of expenses associated with their evaluation of the Offer; and

3.      A release of all repurchase claims that have been or could have been asserted by the Trusts.

 The Institutional Investors who are parties to the agreement are: 

·         Bayerische Landesbank

·         BlackRock Financial Management Inc.

·         Cascade Investment, L.L.C.

·         Federal Home Loan Bank of Atlanta

·         Federal Home Loan Mortgage Corporation

·         Goldman Sachs Asset Management, L.P.

·         ING Investment Management LLC

·         Invesco Advisers, Inc.

·         Kore Advisors, L.P.

·         Landesbank Baden-Wuerttemberg

·         Metropolitan Life Insurance Company

·         Pacific Investment Management Company LLC

·         Sealink Funding Limited

·         Teachers Insurance and Annuity Association of America

·         The Prudential Insurance Company of America

·         The TCW Group, Inc.

·         Thrivent Financial for Lutherans

·         Western Asset Management Company

The agreement is subject to regulatory approval by FHFA and acceptance of the Offer by the Trustees.  Pursuant to the agreement, the Institutional Investors have requested that the Trustees accept the Settlement.  The Institutional Investors have also agreed to use their reasonable best efforts to obtain court approval of the settlement, if the Trustees elect to accept the Offer and seek a judicial instruction concerning their decision to do so.  Attorneys’ fees for the Institutional Investors’ counsel, Gibbs & Bruns, will be paid in addition to—and not out of—the Settlement Payment upon the latter of the Trustees’ Acceptance or Final Court Approval, if a judicial instruction is sought. 

read more [GIBBS & BRUNS]

Exhibit A

###

Wonder what the kickback percentage fees of this amount went to the Corrupted Politicians?

HuffPO-

The average Wall Street bonus increased 15 percent in 2013, bringing the industry’s overall bonuses to a total of $26.7 billion, the largest since 2008. This milestone came just a few months after an NBC News/Wall Street Journal poll found that only 14 percent of Americans have a positive opinion of Wall Street, five years after a financial crisis spurred by these institutions. We’re talking congressional popularity numbers. Ouch.

We’re always told that “Main Street” is directly affected by the state of our financial markets. And yet, even as the stock market continues to rebound, average American workers struggle to find employment, keep their homes and even put food on the table. Wall Street’s earnings meanwhile continue to break records. Seems like a rather one-sided relationship as of late … but outside the decadent halls of Wall Street, that money could be put to excellent use.

With $26.7 billion, we could …

[HUFFINGTONPOST]

Great to see Abigail write again!

Benzinga-

Special Interest Tax Break #9: Calling Payments for Law Breaking Ordinary Business Expenses

When companies “pay” huge amounts of money to settle claims that they broke the law, don’t believe the hype: the bill may be a lot less than advertised.

That’s because we taxpayers may be picking up part of the tab.

[BENZINGA]

A lot they made off these loans!

Reuters-

Bank of America agreed to pay $9.3 billion to settle claims that it sold Fannie Mae and Freddie Mac faulty mortgage bonds, helping the bank to end one of the largest legal headaches it still faced from the financial crisis.

The settlement, announced on Wednesday, includes $6.3 billion in cash and $3.2 billion in securities that Bank of America will purchase from the two housing finance entities.

The second-largest U.S. bank by assets said it had now resolved around 88 percent of its total exposure to securities at issue in the mortgage bond litigation it has faced.

[REUTERS]

We all are part of this PONZI if we like it or not…not up to us to decide but the crooked politicians that kiss the ass of the mighty corporate dollars for brown bags full of a share!

Bloomberg-

On television, in interviews and in meetings with investors, executives of the biggest U.S. banks — notably JPMorgan Chase & Co. Chief Executive Jamie Dimon — make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.

So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?

Granted, it’s a hard concept to swallow. It’s also crucial to understanding why the big banks present such a threat to the global economy.

[BLOOMBERG]

Reuters-

American International Group (AIG.N) is holding “hostage” an $8.5 billion deal to compensate investors who bought Bank of America Corp (BAC.N) mortgage securities, supporters of the deal said in court filings ahead of a hearing on Wednesday.

The supporters urged the judge overseeing the deal to reject AIG’s efforts to delay its approval, according to documents submitted to the court late on Friday.

Bank of America agreed to the settlement in June 2011 to resolve claims by investors who had bought $174 billion of mortgage-backed securities issued by Countrywide Financial before the U.S. housing crisis. The investors said Countrywide, acquired by Bank of America in 2008, misrepresented the quality of the underlying home mortgages, which went sour in the crisis.

[REUTERS]