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Financial Institution Fraud

This archive displays posts tagged as relevant to fraud by or involving financial institutions. You may also be interested in the following pages:

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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 24, 2015

Ayman Shahid, former president of Discovery Sales Inc., pleaded guilty to conspiracy to commit bank fraud.  DSI was the sales arm of affiliated residential construction companies, including Discovery Home Builders and Albert D. Seeno Construction Co.  Shahid admitted he conspired with others to fraudulently cause bank underwriters to approve mortgage loans for unqualified buyers during the height of the financial crisis.  DOJ

May 1, 2015

Paris-based BNP Paribas S.A. was ordered to forfeit $8,833,600,000 and pay a $140,000,000 fine for conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) by processing billions of dollars of transactions through the US financial system on behalf of Sudanese, Iranian and Cuban entities subject to U.S. economic sanctions.  It is the largest financial penalty ever imposed in a criminal case and the first time a financial institution has been convicted and sentenced for violations of US economic sanctions.  DOJ  

April 23, 2015

German-based Deutsche Bank AG and its UK-based subsidiary DB Group Services (UK) Limited agreed to pay more than $2.5 billion to settle US and UK charges relating to their role in manipulating the London Interbank Offered Rate (LIBOR).  In addition to the monetary payout, DB Group Services agreed to plead guilty to wire fraud and Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and price-fixing charges. Whistleblower Insider

March 25, 2015

Schlumberger Oilfield Holdings Ltd., a wholly-owned subsidiary of Schlumberger Ltd., agreed to enter a guilty plea and pay a $232,708,356 penalty for violating the International Emergency Economic Powers Act by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan.  Whistleblower Insider

March 19, 2015

Bank of New York Mellon agreed to pay $714 million to settle charges the bank engaged in fraud and other misconduct when providing foreign exchange (“FX”) services to its customers.  As part of the settlements with the US and New York, BNYM admitted that contrary to representations to clients that it provided “best rates” and “best execution” for FX transactions, the Bank actually gave clients the worst reported interbank rates of the trading day.  The charges originated in a lawsuit brought by a whistleblower under the New York False Claims Act.  Whistleblower Insider

March 12, 2015

Germany-based Commerzbank AG and its US branch Commerzbank AG New York agreed to forfeit $563 million and pay a $79 million fine for violations of the International Emergency Economic Powers Act and the Bank Secrecy Act relating to its funneling of millions of dollars through the US financial system on behalf of Iranian and Sudanese entities subject to US economic sanctions.  The bank also entered into settlement agreements with the Treasury Department’s Office of Foreign Assets Control, the Board of Governors of the Federal Reserve System, and the New York State Department of Financial Services for a combined regulatory payout of $1.45 billion.  Whistleblower Insider

March 3, 2015

The DOJ US Trustee Program entered into a national settlement agreement with JPMorgan Chase Bank N.A. requiring Chase to pay more than $50 million (including cash payments, mortgage loan credits and loan forgiveness) to over 25,000 homeowners who are or were in bankruptcy.  As part of the settlement, Chase acknowledges it filed in bankruptcy courts around the country more than 50,000 payment change notices that were improperly signed by persons who had not reviewed the accuracy of the notices.  DOJ

September 9, 2014

Don Langford, former chief credit officer and senior vice president of Nebraska-based TierOne Bank, pleaded guilty for his role in a scheme to defraud TierOne’s shareholders and regulators. Specifically, Langford conspired with others to hide losses at the bank by cooking the bank’s books and reporting falsified information to stakeholders, regulators, external auditors, and the investing public. The bank even made an unsuccessful attempt to get taxpayer TARP funds in November 2008. TierOne filed for bankruptcy shortly after the Office of Thrift Supervision shut the bank down in June 2010. DOJ

August 21, 2014

Bank of America agreed to pay $16.65 billion to resolve federal and state mortgage fraud claims against the bank and its former and current subsidiaries, including Countrywide Financial Corporation andMerrill Lynch. It is the largest civil settlement with a single entity in American history. And it includes a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), the largest FIRREA penalty ever. As part of the settlement, BofA acknowledged misrepresenting the quality of billions of dollars worth of risky mortgage loans. Whistleblower Insider
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