Archive

November 5, 2015

The Department of Justice’s US Trustee Program entered into a national settlement with Wells Fargo Bank requiring the bank to pay $81.6 million for failing to provide homeowners with legally required notices and thus the opportunity to challenge the accuracy of mortgage payment increases.  Wells Fargo acknowledged failing to timely file more than 100,000 payment change notices and perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of homeowners in bankruptcy between 2011 and 2015.  DOJ

November 5, 2015

A federal jury convicted Anthony Allen and Anthony Conti, former Rabobank derivative traders, for manipulating the London InterBank Offered Rates (LIBOR) for the US Dollar and the Yen, benchmark interest rates to which trillions of dollars in interest rate contracts were tied.  DOJ

November 4, 2015

Tampa, Florida investment advisor and founder of OM Global Investment Fund LLC Gignesh Movalia was sentenced to 18 months in prison and to pay $5,394,419 in restitution for perpetrating a $9 million investment fraud scheme involving Facebook stock.  In connection with his guilty plea, Movalia admitted raising more than $9 million from 130 investors by falsely claiming to have access to pre-initial public offering shares of Facebook Inc.  DOJ

October 20, 2015

Paris-based Crédit Agricole Corporate and Investment Bank, owned by Crédit Agricole S.A. and which operates in over thirty countries, agreed to pay $787.3 million in criminal and civil penalties for violating the International Emergency Economic Powers Act and the Trading With the Enemy Act.  Between August 2003 and September 2008, Crédit Agricole subsidiaries in Geneva knowingly moved approximately $312 million through the US financial system on behalf of sanctioned entities located in Sudan, Burma, Iran and Cuba.  To facilitate these illegal transactions, these subsidiaries used deceptive practices which prevented the government, Crédit Agricole’s New York branch and other US financial institutions from filtering for, and consequently blocking or rejecting, the sanctioned payments.  Whistleblower Insider

October 16, 2015

The US resolved for $4 million a False Claims Act action against the estate and trusts of the late Layton P. Stuart, former owner and president of One Financial Corporation, and its subsidiary, One Bank & Trust N.A., both based in Little Rock, Arkansas.  According to the government, Stuart and One Financial violated the False Claims Act by making false statements about the financial condition of One Financial and One Bank to induce the Department of the Treasury to invest Troubled Asset Relief Program (TARP) funds in One Financial.  Stuart allegedly diverted One Bank funds for personal use, including his purchase of luxury vehicles for his wife and children.  He was terminated from One Bank in September 2012. DOJ

October 6, 2015

Fifth Third Bank agreed to pay $85 million to resolve civil fraud claims arising from the bank’s origination of residential mortgage loans insured by the Federal Housing Administration.  FTB made a voluntary disclosure of approximately 1,400 mortgage loans it had certified as eligible for FHA insurance, later determined were materially defective and thus ineligible for FHA insurance, but never self-reported to HUD, resulting in millions of dollars in HUD losses.  This matter arose, in part, from the filing of a whistleblower complaint under the qui tam provisions of the False Claims Act.  DOJ (NY)

September 30, 2015

Former chief financial officer of Siemens S.A. – Argentina Andres Truppel pleaded guilty to conspiring to pay tens of millions of dollars in bribes to Argentine government officials to secure, implement and enforce a $1 billion contract to create national identity cards.  In connection with his guilty plea, Truppel admitted he engaged in the decade-long scheme which involved concealing the illicit payments through various means, including using shell companies associated with intermediaries to disguise and launder the funds and by paying $7.4 million as part of a hedging contract with a foreign currency company incorporated in the Bahamas.  Truppel also admitted he used a $27 million contract between a Siemens entity and a company called MFast Consulting AG that purported to be for consulting services to conceal bribes to Argentine officials.  DOJ.

September 24, 2015

Hector Hernandez, owner and operator of Miami mortgage lender Great Country Mortgage Bankers was sentenced today to serve 135 months in prison and pay $64,508,141 in restitution and forfeit $8,000,000 in illicit profits for his role in orchestrating a $64 million mortgage fraud scheme.  Also sentenced was real estate developer Aleida Fontao (41 months in prison, $7,131,952 in restitution and $400,000 in forfeiture); and underwriter Olga Hernandez (51 months in prison and $24,512,755 in restitution).  Hector Hernandez admitted that his company employed loan officers, loan processors and underwriters, including Olga Hernandez and Fontao, whom he knew approved and submitted false and fraudulent Federal Housing Administration mortgage loan applications and accompanying documents to HUD on behalf of unqualified borrowers.  These documents included false pay stubs, false verification of employment forms, and fictitious letters from the borrowers.  DOJ

September 4, 2015

Walter Investment Management Corp. agreed to pay $29.63 million to resolve allegations that, through its subsidiaries, Reverse Mortgage Solution Inc., REO Management Solutions LLC and RMS Asset Management Solutions LLC, it violated the False Claims Act in connection with the subsidiaries’ participation in the Department of Housing and Urban Development’s Home Equity Conversion Mortgages program, which insures “reverse” mortgage loans.  The allegations originated in a whistleblower lawsuit filed former RMS executive Matthew McDonald under the qui tam provisions of the False Claims Act.  McDonald will receive a whistleblower award of $5.15 million.  DOJ

August 31, 2015

Vadim Mikerin, a Russian official residing in Maryland, pleaded guilty to conspiracy to commit money laundering in connection with his role in arranging over $2 million in corrupt payments to influence the awarding of contracts with the Russian state-owned nuclear energy corporation.  DOJ