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Employee Claims Fired for Reporting Fraud

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A former SunTrust Banks employee alleges in a lawsuit that he was fired in retaliation for alerting superiors to occurrences of mortgage fraud and other illegal activities — a violation of the state’s Whistleblower Act. The suit is one of two filed since December alleging a large U.S. lender fired an employee for reporting fraud.

The allegations include violations of underwriting guidelines by supervisors, inflating a borrower’s income, not collecting application and appraisal fees from borrowers, approving a loan on a second home when the borrower already had a second-home loan on another property, missing and destroyed unsecured files, and other actions.

The plaintiff, Alan Archambault, who, according to court filings, has worked in the mortgage industry for more than 20 years, was fired from one of the bank’s Fort Lauderdale, Fla., offices effective Dec. 26 after more than five years as a mortgage loan coordinator with SunTrust.

In one court document, he described himself as “a dedicated employee and a shareholder” who had “a vested interest in the success of SunTrust.”

The complaint was filed in Broward County Circuit Court in Fort Lauderdale on Dec.17.

Archambault’s attorney, Scott M. Behren, of Weston, Fla., told MortgageDaily.com on Wednesday that he was beginning discovery, which would include deposing people who worked with Archambault.

The lawsuit seeks “damages which exceed $15,000 but is less than $75,000, exclusive of attorney’s fees and court costs.”

SunTrust, in its answer, filed on Jan. 8, denied all the allegations of fraud and other illegal activities, and also denied that certain conduct alleged by Archambault was “in violation of laws, rules and regulations, including federal mortgage loan underwriting guidelines.”

The bank also denied the complaint’s statement that throughout his tenure at “SunTrust, Archambault was commended for his excellent work performance.” And it stated that “all employment-related decisions made with respect to plaintiff, or which affected plaintiff, were made in good faith for legitimate, non-retaliatory reasons.”

The reason SunTrust gave for Archambault’s firing, according to his attorney, was performance related. The bank allegedly claimed his loan originations were too low.

Archambault did not immediately respond to a request for an interview.

Atlanta-based SunTrust reports it has more than 1,600 branches in 11 southern and southeastern states and the District of Columbia and total assets of more than $175 billion. Its subsidiaries include SunTrust Mortgage Inc., one of the nation’s largest bank-owned mortgage companies.

Last month, a former regional vice president of Countrywide KB Home Loans, who managed the company’s Houston division, alleged in another lawsuit that he was fired for failing to meet loan approval deadlines that would have required engaging in illegal and fraudulent practices, practices to which he had unsuccessfully alerted Countrywide executives.

The allegations of that complaint include the encouragement and acceptance of inflated appraisals, the overstating of income of at least one borrower by a Countrywide loan officer, the flipping of full documentation loan applications into stated income or no income-no assets subprime loans, approving loans that lack the “critical documentation and information,” and setting and enforcing a 10 percent daily quota for approving a backlog of loan applications.

The plaintiff in that case also filed a complaint against Countrywide with the U.S. Department of Labor under the federal “Whistleblower” act.

Calabasas, California-based Countrywide Financial, in a statement sent to MortgageDaily.com, said that it had investigated each of the plantiff’s claims “and found no merit to his accusations.

Similar:
Countrywide Accused of Firing Whistleblower
A former regional vice president of a Countrywide Financial Corp. affiliate has filed a lawsuit against the company alleging that he was fired for alerting executives that he wouldn’t approval fraudulent loans.

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