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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:

Page 30 of 33

July 24, 2014

Morgan Stanley agreed to pay $275M to settle charges of misleading investors in a pair of residential mortgage-backed securities (RMBS) securitizations it underwrote, sponsored, and issued.  In an asset-backed securities offering, federal regulations under the securities laws require the disclosure of delinquency information for the mortgage loans serving as collateral.  Morgan Stanley allegedly misrepresented the current or historical delinquency status of mortgage loans underlying two subprime RMBS securitizations that came against a backdrop of rising borrower delinquencies and unprecedented distress in the subprime market.  SEC

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 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 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  

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
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