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Mortgage Investor Lawsuits Second-Quarter 2011 Second-Quarter 2011 Mortgage Litigation Index

Mortgage Investor Lawsuits
Second-Quarter 2011 Mortgage Litigation Index
Shareholder lawsuits and class actions accusing companies of inflating earnings, overstating capital position or otherwise deceiving investors in the company. Other shareholder issues.

 

Defendant
Plaintiff
Court
Amount
Overview
Case Title
Case Number Date Filed Link to Story
United Western Bancorp, Inc. n/a United States District Court for the District of Colorado n/a Shareholder class action suit against failed bank alleging failure to disclose bank’s exposure to mortgage backed securities that ultimately went bad, led to bank failure. n/a n/a n/a www.mortgagedaily.com/litigationmbs051011.asp
Ace Securities Corp. Allstate Ins. Co. Supreme Court of the State of New York- County of New York n/a Insurer claims bank, as trustee, improperly invested in mortgage backed securites resulting in losses to the insurer. Allstate Ins. Co. v. Ace Securities Corp. 650431/2011 n/a www.mortgagedaily.com/litigationmbs051011.asp
Countrywide Financial Corp., Countrywide Home Loans, Inc., CWMBS, Inc, CWHEQ, Inc, Countrywide Capital Markets, Countrywide Securities Corp., J.P. Morgan Securities Corp., Deutsche Bank Securities Inc., Bear, Stearns & Co., Inc., Banc of America Securities, LLC, Morgan Stanley & Co., Inc., Edward Jones & Co., L.P., Citigroup Global Markets Inc., Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, Greenwich Capital Markets, Inc., Barclays Capital Inc., HSBC Securities (USA), BNP Paribas Securities Corp., Merrill Lynch, Pierce, Fenner & Smith, Inc., Stanford L. Kurland, David Spector, Eric P. Sieracki, N. Joshua Adler, Ranjit Kripalani, Jennifer S. Sandefur, Davib A. Sambol Maine State Retirement System et al United States District Court for the Central District of California n.a Bank of America released from class action lawsuit after arguing it cannot be held liable for actions of its subsidiary Countrywide Maine State Retirement System v. Countrywide Financial Corp. et al. 2:10-cv-00302-SJO-PJW n/a www.mortgagedaily.com/litigationmbs051011.asp
Credit Suisse Securities (USA) LLC, Credit Suisse First Boston Mortgage Securities Corp., Asset Backed Securities Corp., DLJ Mortgage Capital, Inc. Allstate Ins. Co., Allstate Bank, Kennett Capital, Inc., Allstate Life Ins. Co. Supreme Court of the State of New York- County of New York $231,000,000 Insurer claims bank, as trustee, improperly invested in mortgage backed securites resulting in losses to the insurer. Allstate Life Ins. Co. et al v. Credit Suisse Securities (USA) LLC, et al. 650547/2011 02/28/11 www.mortgagedaily.com/litigationmbs051011.asp
JP Morgan Securities, Inc, Bear Stearns Asset Backed Securities I LLC, Chase Mortgage Finance Corp., J.P. Morgan Acceptance Corp., J.P. Morgan Securities Holdings LLC Charles Schwab Corp. United States District Court for the Northern District of California n/a Suit remanded to state court. Plaintiff alleges it was misled re: quality of MBS certificates it purchased Charles Schwab Corp. v. JP Morgan Securities, Inc. et al 3:2010cv4522 10/06/10 www.mortgagedaily.com/litigationmbs051011.asp
US Bancorp. Woodmen of the World Life Ins. Co. Delaware Court of Chancery $100,000,000 Insurer claims bank, as trustee, improperly invested in mortgage backed securites resulting in losses to the insurer. n/a 6260-CC 03/15/11 www.mortgagedaily.com/litigationmbs051011.asp
Wells Fargo N.A., Alameda County Employee’s Retirement Association United States District Court for the Northern District of California n/a Judge grants motion to seal certain materials relating to granting of class certification in mortgage backed securities class action suit. In Re: Wells Fargo Mortgage Backed Certificates Litigation 09/cv-1376-LHK (PSG) n/a www.mortgagedaily.com/litigationmbs051011.asp
Citimortgage Inc. Allstate Ins. Co. Supreme Court of the State of New York- County of New York $385,000,000 Insurer claims bank, as trustee, improperly invested in mortgage backed securites resulting in losses to the insurer. Allstate Ins. Co. v. Citimortgage Inc. 650432/2011 n/a www.mortgagedaily.com/litigationmbs051011.asp
Fabrice Tourre SEC United States District Court for the Southern District of New York n/a The SEC sued Goldman Sachs and one of its traders, Tourre, for fraud. After GS settled with the SEC for $550 million, the SEC continues to prosecute Tourre. SEC v. Tourre 10-03229 04/16/10 www.mortgagedaily.com/MctGoldman060311.asp
Wells Fargo Securities, LLC fka Wachovia Capital Markets LLC Securities and Exchange Commission United States of America Before the Securities and Exchange Commission $11,000,000 Wells Fargo has agreed to settle for $11 million charges that subsidiary Wachovia Inc. improperly peddled mortgage investments before being acquired by Wells Fargo. In re: Wells Fargo Securities, LLC (fka Wachovia Capital Markets LLC) 3-14320 04/05/11 www.mortgagedaily.com/MctSettlementWellsSec040511.asp
RBS Securities, Inc., f/k/a Greenwich Capital Markets, Inc., Greenwich Capital Acceptance, Inc., Financial Asset Securities Corp., Fremont Mortgage Securities Corp., Residential Funding Mortgage Securities II, Inc., Indymac MBS, Inc., Novastar Mortgage Funding Corp., Nomura Home Equity Loan, Inc., Lares Asset Securitization, Inc., Saxon Asset Securities Co., and Wachovia Mortgage Loan Trust LLC National Credit Union Administration Board, as Liquidating Agent for U.S. Central Federal Credit Union United States District Court for the District of Kansas $400,000,000 Defendants are accused of violating federal and state securities laws and misrepresenting the sale of hundreds of securities to five failed credit unions that the NCUA took over as liquidating agent. Investigations uncovered numerous material misrepresentations by the underwriters in the offering documents, according to Plaintiff. 2 lawsuits totaled $800 mil in damages; attributed half. National Credit Union Administration Board v. RBS Securities Inc., et al. 2:11-cv-02340-RDR-KGS 06/20/11 www.mortgagedaily.com/LawsuitNcua062011.asp
Morgan Keegan & Company, Inc., Morgan Asset Management, Inc., James C. Kelsoe, Jr. and Joseph Thompson Waller, CPA U.S. Securities and Exchange Commission, Financial Industry Regulatory Authority, and regulators in the states of Tennessee, Kentucky, Alabama, Mississippi and South Carolina United States of America before the Securities and Exchange Commission $200,000,000 Defendants entered into a settlement agreement with regulators and agreed to pay $200 million to settle civil fraud charges that it defrauded investors, including many in Georgia, who bought into funds that included subprime mortgage loans that soured when the housing market fell. In the Matter of Morgan Keegan & Company, Inc., Morgan Asset Management, Inc., James C. Kelsoe, Jr. and Joseph Thompson Waller, CPA Administrative File No. 3-13847 04/07/10 www.mortgagedaily.com/MctSettlementRegions062211.asp
J.P. Morgan Securities LLC (f/k/a J.P. Morgan Securities Inc. U.S. Securities and Exchange Commission United States District Court Southern District of New York $153,600,000 J.P. Morgan agreed to pay $153.6 million to settle claims that it misled investors in complex mortgage pools as the housing market fell. Securities and Exchange Commission v. J.P. Morgan Securities LLC 11-04206 06/21/11 www.mortgagedaily.com/MctSettlementRegions062211.asp www.mortgagedaily.com/SettlementJpMorganSEC062111.asp
Edward S. Steffelin U.S. Securities and Exchange Commission United States District Court Southern District of New York n/a Defendant is accused of heading a team at GSCP (NJ) L.P. — an experienced investment advisory firm of bankrupt GSC Capital Corp.–that was promoted as the firm that actually assembled the CDO that J.P. Morgan structured and marketed to investors, which resulted in a SEC lawsuit against J.P. Morgan. Steffelin allegedly drafted and approved marketing materials promoting GSC’s selection of the portfolio without disclosing to investors that a prominent hedge fund named Magnetar played a role in the selection process. Magnetar held a $600 million short position and stood to profit if the CDO failed. Securities and Exchange Commission v. Steffelin 11-04204 06/21/11 www.mortgagedaily.com/SettlementJpMorganSEC062111.asp
J.P. Morgan Securities LLC, J.P. Morgan Acceptance Corporation I, American Home Mortgage Assets LLC, Indymac MBS, Inc., and Bond Securitization, LLC National Credit Union Administration Board, as Liquidating Agent of U.S. Central Federal Credit Union, Western Corporate Federal Union, Members United Corporate Federal Credit Union, and Southwest Corporate Federal Credit Union United States District Court for the District of Kansas $400,000,000 Plaintiff alleges that Defendant violated federal and state securities laws and misrepresented the sale of hundreds of securities to five failed credit unions that the NCUA took over as liquidating agent. 2 lawsuits totaled $800 mil in damages; attributed half. National Credit Union Administration Board v. J.P. Morgan Securities LLC ,et al. 11-cv-2341 EFM/JPO 06/20/11 www.mortgagedaily.com/SettlementJpMorganSEC062111.asp
Radius Capital Corp., Robert A. DiGiorgio SEC United States District Court for the Middle District of Florida Injunctive relief The SEC alleges that DiGiorgio and Radius misrepresented to Ginnie Mae and MBS investors that 15 MBS were filled with loans insured by the FHA when they in fact were not FHA-insurable. DiGiorgio disputes allegations in phone interview. SEC v. Radius Capital Corp. 2:11-cv-00116-JES-DNF 03/07/11 www.mortgagedaily.com/LawsuitRadius052711.asp
Ally Bank, BAC Home Loans Servicing, L.P., Bank of America Corp., CWALT, Inc., CWHEQ, Inc., CWMBS, Inc., Countrywide Capital Markets, LLC, Countrywide Financial Corp., Countrywide Home Loans Servicings, L.P., Countrywide Home Loans, Inc., Countrywide Securities Corp., GMAC Mortgage LLC, Homecomings Financial, LLC, Angelo Mozilo, NB Holdings Corp., Residential Accredit Loans, Inc., Residential Asset Mortgage Products, Inc., Resdiential Funding Co., LLC, Residential Funding Securities, LLC, David Sambol, Thrivent Financial for Lutherans, Thrivent Balanced Fund, Thrivent Balanced Portfolio, Thrivent Bond Index Portfolio, Thrivent Core Bond Fund, Thrivent Financial Defined Benefits Plan Trust, Thrivent Income Fund, Thrivent Life Insurance Co., Thrivent Limited Maturity Bond Fund, Thrivent Limited Maturity Bond Portfolio United States District Court for the District of Minnesota n/a Investors suing countrywide for poor underwriting practices causing securities backed by mortgages to go bad. Defendants removed case to federal court. Thrivent Financial for Lutherans et al v. Countrywide Financial Corp et al 011-cv-01111 n/a www.mortgagedaily.com/litigationmbs051011.asp
Ally Financial, Inc. , Banc of America Funding Corporation , Bank of America Corporation , Bank of America, National Association , Barclays Capital Inc. , Barry J. O’Brien, BCAP LLC , Bear Stearns Asset Backed Securities I LLC , Capital One Financial Corporation , Capital One, National Association , Chevy Chase Funding, LLC , Christopher M. O’Meara, Citicorp Mortgage Securities, Inc. , Citigroup Financial Products, Inc. , Citigroup Global Markets Inc. , Citigroup Global Markets Realty Corp. , Citigroup Inc. , Citigroup Mortgage Loan Trust Inc. , Citimortgage, Inc. , Countrywide Financial Corporation , Countrywide Home Loans, Inc. , Countrywide Securities Corporation , Credit Suisse (USA), Inc. , Credit Suisse First Boston Mortgage Securities Corp. , Credit Suisse Holdings (USA), Inc. , Credit Suisse Securities (USA) LLC , CWALT, Inc. , CWMBS, Inc. , DB Structured Products, Inc. , DB U.S. Financial Market Holding Corporation , Deutsche Alt-A Securities, Inc. , DEUTSCHE BANK SECURITIES, INC. , DLJ Mortgage Capital, Inc. , Edward Grieb, EMC Mortgage Corporation , Fitch, Inc. , GMAC Mortgage Group, LLC , Goldman Sachs & Co. , IMH Assets Corp. , Impac Funding Corporation , Impac Mortgage Holdings, Inc. , Impac Secured Assets Corp. , J.P. Morgan Acceptance Corporation I , J.P. Morgan Mortgage Acquisition Corp. , James J. Sullivan, JPMorgan Securities Holdings LLC , Kristine Smith, Lana Franks, Mark Zusy, Merrill Lynch & Co., Inc. , Merrill Lynch Mortgage Investors, Inc. , Merrill Lynch Mortgage Lending, Inc. , Merrill Lynch Pierce Fenner & Smith, Inc. , Moody’s Corporation , Moody’s Investors Service, Inc. , Morgan Stanley , Morgan Stanley & Co. Inc., , Morgan Stanley Capital I Inc. , Morgan Stanley Mortgage Capital Holdings, LLC , Mortgage Asset Securitization Transactions, Inc. , MortgageIT Securities Corp , MortgageIT, Inc. , Nomura Asset Acceptance Corporation , Nomura Credit & Capital, Inc. , Nomura Holding America, Inc. , Nomura Securities International, Inc. , RBS Acceptance Inc. , RBS Financial Products Inc. , RBS Holdings USA Inc. , RBS Securities Inc. , Residential Accredit Loans, Inc. , Residential Funding Company, LLC , Richard McKinney, Richard S. Fuld, Jr., Samir Tabet, Sandler, O’Neill & Partners, L.P. , Standard & Poor’s Financial Services LLC , Structured Asset Mortgage Investments II Inc. , The Bear Stearns Companies LLC , The McGraw-Hill Companies, Inc. , UBS Americas Inc. , UBS Real Estate Securities Inc. , UBS Securities LLC , Wamu Capital Corp. , Wells Fargo & Company , Wells Fargo Asset Securities Corporation , Wells Fargo Bank, National Association , Defendants John Doe 1-50, JP Morgan Chase & Co. and MORTGAGEIT HOLDINGS, INC. Federal Home Loan Bank of Boston Massachusetts Superior Court- Suffolk County $5,800,000,000 FHLB sues a number of parties related to private-label mortgage backed securities offerings that went bad. FHLB alleges various misrepresentations re: quality of securities Federal Home Loan Bank of Boston v. Ally Financial, et al. 1:2011cv10952 05/26/11 www.mortgagedaily.com/litigationmbs051011.asp
BAC Home Loans Servicing LP MBS investors n/a n/a Agreement reached on Oct. 18, 2010, was extended. The Bank of New York Mell joined the agreement. n/a n/a n/a www.mortgagedaily.com/litigationmbs051011.asp
Countrywide Home Loans, Inc., Park Granada LLC, Park Monoco Inc., Park Sienna LLC, Bank of America Corp., Bank of New York Mellon Walnut Place LLC Supreme Court of the State of New York- County of New York $1,060,000,000 Investors suing to force repurchase of loans underlying securities purchased by plaintiff, alleging breached representations and warranties on the part of Countrywide Walnut Place LLC v. Countrywide Home Loans, Inc. et al 650497/2011 n/a www.mortgagedaily.com/litigationmbs051011.asp
ICP Asset Management, Moore Capital American International Group Supreme Court of the State of New York- County of New York n/a AIG suing managers of CDO’s who allegedly made false representations that CDO’s contained prime mortgages American Int’l Group v. ICP Asset Management n/a n/a www.mortgagedaily.com/litigationmbs051011.asp
Kerry K. Killinger; Stephen J. Rotella; David C. Schneider; Linda C. Killinger; and Esther T. Rotella The Federal Deposit Insurance Corporation United States District Court for the Western District of Washington n/a Settlement is being negotiated in the lawsuit by federal regulators against three top WaMu officers. Defendants are accused of pushing WaMu into making billions in high-risk home loans, despite knowing the nation was in the midst of an unprecedented housing bubble and being warned that the company was unprepared to handle so much risk. Defendants accussed of gross negligence in the bank’s failure. The complaint alleges that they gambled billions of dollars and pursued a high-volume lending strategy that rewarded them financially while disregarding warnings by regulators and internal risk officers. FDIC v. Killinger et al. 2:2011cv00459 03/16/11 www.mortgagedaily.com/MctLawsuitWamuFdic040411.asp
Desiree E. Brown SEC United States District Court for the Eastern District of Virginia $1,500,000,000 The SEC alleged that Brown, the former treasurer of Taylor, Bean & Whitacker, enabled the sale of $1.5 billion in fictitious and impaired mortgage loans from Taylor Bean to Colonial Bank. SEC v. Brown 1:11cv192-GBL/TRJ 2/24/2011 (plea) www.mortgagedaily.com/TaylorBeanSentences061011.asp
Raymond Bowman United States United States District Court for the Eastern District of Virginia $1,500,000,000 SEC alleges that Bowman, the former president of Taylor Bean, allegedly enabled the sale of $1.5 billion in fictitious and impaired mortgage loans from Taylor, Bean & Whitacker Mortgage Corp., Colonial’s biggest customer, to Colonial Bank. SEC v. Bowman 1:11-cr-00118-LMB 03/14/11 www.mortgagedaily.com/TaylorBeanSentences061011.asp
Bank of America Corp. Pennsylvania Public Employees’ Retirement System, et al. United States District Court, Southern District of New York n/a U.S. District Judge William Pauley ordered Bank of America Corp. to stand trial in a consolidated civil case involving alleged “dollar rolling” following the certification of another case in the same court: Public Employees’ Retirement System of Mississippi et al. v. Merrill Lynch & Co. et al. Pennsylvania Public Employees’ Retirement System v. Bank of America Corp. 1:2011cv00733 n/a www.mortgagedaily.com/LitigationInvestor062911.asp
BankAtlantic Bancorp, Inc., James A. White, Valerie C. Toalson, Jarett S. Levan and Alan B. Levan Joseph C. Hubbard, as lead plaintiff United States District Court for the Southern District of Florida n/a Federal judge reversed a $2.41-per share jury award against BankAtlantic noting that shareholder losses could have been the result of changed economic circumstances. In re: BankAtlantic Bancorp Inc. Securities Litigation 07-cv-61542 10/29/07 www.mortgagedaily.com/LitigationInvestor062911.asp
Citigroup Inc. and over a dozen current and former executives including Charles Prince, Robert Rubin, George David and John Deutch Shareholders United States District Court, Southern District of New York n/a The District Court dismissed this shareholder lawsuit filed against Citigroup and more than a dozen of its current and former executives. The Judge said the Plaintiffs erred in failing to first approach bank directors to take action on their behalf over the alleged wrongdoing. In Re: Citigroup Inc. Shareholder Derivative Litigation 1:2007cv09841 (SHS) n/a www.mortgagedaily.com/LitigationInvestor062911.asp
Countrywide Financial Corp., Countrywide Home Loans, Inc., CWALT, Inc., CWMBS, Inc., CWABS, Inc., CWHEQ, Inc., Countrywide Capital Markets, Countrywide Securities Corp., N. Joshua Adler, Ranjit Kripalani, Jennifer Sandefur, David Sambol, Banc of America Securities LLC, Barclays Capital Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Edward D. Jones & Co., L.P., Deutsche Bank Securities Inc., Goldman Sachs & Co., RBS Securities Inc., HSBC Securities (USA) Inc., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Morgan Stanley & Co., Incorporated, UBS Securities LLC, David A. Spector, Stanford L. Kurland, and Eric P. Sieracki David H. Luther et al. Court of Appeals of California, Second District, Division Five n/a A 2010 state court decision dismissing an investor class action against Countrywide for lack of subject matter jurisdiction was overturned on May 18. Investors successfully argued that the state court improperly interpreted portions of the federal Securities Act of 1933. Luther et al. v. Countrywide Financial Corp. et al. B222889 05/18/11 www.mortgagedaily.com/LitigationInvestor062911.asp
Federal Home Loan Mortgage Corp. Central States, Southeast and Southwest Area Pension Fund, and National Elevator Industry Pension Plan, Louisiana Municipal Police Employees Retirement System United States District Court, Southern District of New York; U.S. Court of Appeals for the Fourth Circuit n/a The U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s decision to dismiss this putative class action lawsuit filed by shareholders who alleged that Freddie Mac made misrepresentations or misstatements relating to its exposure to non-prime mortgage loans, accuracy of financial reporting and its capital adequacy. The court held that Plaintiffs failed to adequately plead that Freddie’s disclosures on those issues were either false or misleading. Louisiana Municipal Police Employees Retirement System v. Federal Housing Finance Agency 1:2008cv7281; 09-01973 Aug. 2008 www.mortgagedaily.com/LitigationInvestor062911.asp
First Horizon National Corp., First Tennessee Bank, N.A., Highland Capital Management Corp., Martin & Company, Inc., members of First Horizon’s Board of Directors, the Retirement Investment Committee and its members, and the Pension, Savings & Flexible Compensation Committee and its members John Yost and Gerald Sanders, individually and on behalf of all others similarly situated United States District Court of the Western District of Tennessee n/a The court granted a conditional class certification against defendants. Plaintiffs are employees of and participants in Defendants’ 401(k) plan who are trying to recover alleged losses suffered as a result of imprudent investments in the company’s stock and mutual funds. Yost, et al. v. First Horizon National Corp., et al. 08-2293-STA-cgc 06/30/08 www.mortgagedaily.com/LitigationInvestor062911.asp
Robin E Rubin, C. Michael Armstrong, John M. Deutch, Anne M. Mulcahy, Vikram Pandit, Alain J.P. Belda, Timothy C. Collins, Jerry A. Grundhofr, Robert L. Joss, Andrew N. Liveris, Michael E. O’Neill, Richard D. Parsons, Lawrence R. Ricciardi, Judith Rodin, Robert L. Ryan, Anthony M. Santomero, Diana L. Taylor, William S. Thompson, Jr. and Ernesto Zedillo William Fitzpatrick United States District Court, Southern District of New York n/a Plaintiff sued defendant executives of Citigroup, alleging that the board ignored shareholder warnings then refused to take action. Fitzpatrick v. Rubin et al. 1:2011cv02822 04/26/11 www.mortgagedaily.com/LitigationInvestor062911.asp
Robin E Rubin, C. Michael Armstrong, John M. Deutch, Anne M. Mulcahy, Vikram Pandit, Alain J.P. Belda, Timothy C. Collins, Jerry A. Grundhofr, Robert L. Joss, Andrew N. Liveris, Michael E. O’Neill, Richard D. Parsons, Lawrence R. Ricciardi, Judith Rodin, Robert L. Ryan, Anthony M. Santomero, Diana L. Taylor, William S. Thompson, Jr. and Ernesto Zedillo Michael Brautigam United States District Court, Southern District of New York n/a Plaintiff sued defendant executives of Citigroup, alleging that the board ignored shareholder warnings then refused to take action. Brautigam v. Rubin et al. 1:2011cv02693 04/20/11 www.mortgagedaily.com/LitigationInvestor062911.asp
Washington Mutual Inc. Investors – class action United States District Court for the Western District of Washington n/a In April, the court was notified that Washington Mutual Inc. and its shareholders who sued the company were close to a settlement. In re: Washington Mutual Inc. Securities, Derivatives & ERISA Litigation 2:08-md-01919 02/21/08 www.mortgagedaily.com/LitigationInvestor062911.asp
Ally Financial Inc. and subsidiaries Securities and Exchange Commission n/a n/a Ally and its subsidiaries were subpoenaed. n/a n/a n/a www.mortgagedaily.com/GmacIpo062911.asp
Ally Financial Inc., GMAC Mortgage LLC U.S. Department of Justice n/a n/a Ally and GMAC subpoenaed. n/a n/a n/a www.mortgagedaily.com/GmacIpo062911.asp
Michael Lee Wilson The People of the State of California The Superior Court, State of California, For the County of Santa Barbara, Santa Maria Division $14,000,000 Michael Lee Wilson, owner of Pacific Coast Mortgage, was arrested in 2009 over allegations that he deceived elderly investors and committed mortgage fraud. Wilson has been sentenced to 20 years in prison. California v. Wilson No. 09-07-225191 07/10/09 www.mortgagedaily.com/LitigationCriminal041211.asp
Jerry J. Williams, Francesco “Frank” Mileto, Thomas Hebble and Angel Guerzon United States United States District Court for the Middle District of Florida $82,000,000 A grand jury returned an indictment against Jerry J. Williams. He was the president, chief executive officer, and chairman of the board of Orion Bancorp, Inc., and the former Orion Bank, a federally insured financial institution, that was headquartered in Naples, Florida. The indictment alleges that Williams orchestrated a complex conspiracy to fraudulently raise capital and falsify bank records in order to mislead state and federal regulators as to the bank’s true financial condition. U.S. v. Williams n/a n/a www.mortgagedaily.com/LitigationCriminal041211.asp
Donald E. Dodge and Scott Farah United States United States District Court for the District of New Hampshire n/a Dodge received a six-year sentence for operating an unlicensed loan servicing company, C L and M Inc., which serviced all loans brokered through Financial Resources Mortgage Inc., owned by Scott Farah, who also pleaded guilty and received 15 year sentence United States v. Scott Farah and Donald Dodge 1:10-CR-44-PD-01/02, LR021837 04/01/10 www.mortgagedaily.com/financialresources041711.asp
Jeffrey L. Levine, Delroy Oliver Davey, Christopher Bernard Loving, Brent Merriel United States United States District Court for the Northern District of Georgia Atlanta Division $6,761,791 In April, former Omni executive vice president Jeffrey L. Levine, convicted on Jan. 14, 2010, was sentenced to five years in prison and fined $6,761,791. Delroy Oliver Deavy was sentenced to 14 months, Christopher Bernard Loving received a sentence of probation in August 2010 and Brent Merriel was given a more than three year sentence in August 2010. United States v. Jeffrey L. Levine, et al. 1:09-CR-00554-JOF n/a www.mortgagedaily.com/LitigationCriminal061711.asp
Joseph Mazella United States United States District Court Eastern District of New York $12,000,000 Defendant was arrested on April 21 , 2011, on charges of securities fraud, wire fraud, and money laundering for allegedly soliciting over $12 million from investors for investments that he told them would be secured by mortgages on real estate projects. Instead, he used investor funds to pay personal expenses-including payments for a Porsche, a mortgage on his personal residence and family expenses. United States v. Mazella 11-cr-00300 04/21/11 ww.mortgagedaily.com/LitigationInvestor062911.asp
Donna Shebetich United States United States District Court for the Western District of Pennsylvania n/a Shebetich pleaded guilty in June to filing a false report to bank regulators. Shebetich was vice president, director and loan officer for Metropolitan Savings Bank when she filed five reports in 2005 and 2006 that understated how many of the bank’s mortgages had gone delinquent. The government estimates that the FDIC and 24 individuals whose deposits weren’t entirely covered by FDIC insurance lost more than $10.2 million. United States v. Shebetich n/a n/a www.mortgagedaily.com/MctPleaMetropolitan061511.asp
Raymond Bowman United States United States District Court for the Eastern District of Virginia $2,900,000,000 Raymond Bowman was sentenced to 40 months for one count of conspiracy to commit bank, wire and securities fraud, and one count of false statements for his role in a more than $2.9 billion fraud scheme that contributed to the failures of Colonial Bank and Taylor, Bean & Whitacker. U.S. v. Bowman 1:11-cr-118-LMB n/a www.mortgagedaily.com/LitigationCriminal041211.asp www.mortgagedaily.com/SentenceFarkas063011.asp www.mortgagedaily.com/TaylorBeanSentenceCeo062111.asp
Teresa Kelly United States United States District Court for the Eastern District of Virginia $2,900,000,000 Teresa Kelly, former operations supervisor for Colonial Bank’s warehouse lending division, pled guilty to knowingly and intentionally placing Colonial Bank and Colonial BancGroup at significant risk by causing them to purchase more than $400 million in assets that had no value. The fraud scheme caused Colonial Bank and Colonial BancGroup to purchase tens of millions of dollars of worthless assets, caused Colonial BancGroup to report false information in its financial statements, and artificially inflated the value of Taylor, Bean & Whitacker’s mortgage servicing rights. U.S. v. Kelly 1:11-cr-119-LMB 03/16/11 www.mortgagedaily.com/LitigationCriminal041211.asp www.mortgagedaily.com/SentenceFarkas063011.asp www.mortgagedaily.com/TaylorBeanSentenceCeo062111.asp
Lee Farkas United States United States District Court for the Eastern District of Virginia $2,900,000,000 30-year sentence for Farkas, the former chairman of Taylor, Bean & Whitacker Mortgage Corp., allegedly enabled the sale of $1.5 billion in fictitious and impaired mortgage loans to Colonial Bank. United States v. Farkas 1:15:10-cr-mj-1028 06/15/10 www.mortgagedaily.com/LitigationCriminal041211.asp www.mortgagedaily.com/SentenceFarkas063011.asp www.mortgagedaily.com/TaylorBeanSentenceCeo062111.asp www.mortgagedaily.com/taylorbeanconviction042011.asp
Catherine L. Kissick United States United States District Court for the Eastern District of Virginia $2,900,000,000 Kissick sentenced to 8 years for assisting in carrying out a scheme involving $1.5 billion in fraudulent mortgages at Taylor, Bean & Whitacker Mortgage Corp. U.S. v. Kissick 1:11-cr-88-LMB n/a www.mortgagedaily.com/LitigationCriminal041211.asp www.mortgagedaily.com/SentenceFarkas063011.asp www.mortgagedaily.com/TaylorBeanSentenceCeo062111.aspwww.mortgagedaily.com/LitigationCriminal061711.asp
Paul Allen United States United States District Court for the Eastern District of Virginia $2,900,000,000 Paul Allen, a former chief executive officer of Taylor, Bean & Whitacker, was sentenced to 40 months for making false statements and conspiring to commit bank and wire fraud. The government claimed that when Allen failed to secure $50 million of $300 million needed to acquire Colonial Bank, Taylor Bean chairman Lee Farkas fraudulently moved $5 million into an escrow account set up in an investor’s name and tried to portray it as a required 10 percent escrow deposit. U.S. v. Allen 1:11-cr-165-LMB n/a www.mortgagedaily.com/LitigationCriminal041211.asp www.mortgagedaily.com/SentenceFarkas063011.asp www.mortgagedaily.com/TaylorBeanSentenceCeo062111.asp
Sean W. Ragland United States United States District Court for the Eastern District of Virginia $2,900,000,000 Sean Ragland, a former Taylor, Bean & Whitacker senior financial analyst, sentenced to 3 months for conspiring to commit bank and wire fraud. Ragland reportedly learned of inadequate assets at Taylor Bean subsidiary Ocala Funding to back up commercial paper so he covered up the deficiency by providing false information to financial institution investors, other third parties, and an outside audit firm. U.S. v. Ragland 1:11-cr-162-LMB n/a www.mortgagedaily.com/LitigationCriminal041211.asp www.mortgagedaily.com/SentenceFarkas063011.asp www.mortgagedaily.com/TaylorBeanSentenceCeo062111.asp
Desiree Brown United States United States District Court for the Eastern District of Virginia $2,900,000,000 Brown sentenced to 72 months for assisting in carrying out a scheme involving $1.5 billion in fraudulent mortgages at Taylor, Bean & Whitacker Mortgage Corp. U.S. v. Desiree Brown 1:11-cr-00084 n/a www.mortgagedaily.com/LitigationCriminal041211.asp www.mortgagedaily.com/SentenceFarkas063011.asp www.mortgagedaily.com/TaylorBeanSentences061011.asp
Peter Bakowski United States United States District Court for the Middle District of Florida $16,100,000 Mortgage broker sentenced to 15 years for mortgage fraud- selling same mortgage to multiple investors promising investors returns of 15-20 percent. United States v. Bakowski No. 8:09-CR-491-T-33TBM 10/20/10 www.mortgagedaily.com/litigationsecondary051111.asp
Amerifund Financial Inc., Eric Matthew Anderson, et al. FDIC as receiver for Downey Savings & Loan Association United States District Court for the Central District of California $1,200,000 FDIC alleges that Anderson, a California mortgage broker purported to use Amerifund as his alter ego, submitted $2.4 million in fraudulent loans to Downey S&L before Downey failed. The FDIC claims the losses resulting from the alleged mortgage fraud is around $1.2 million. FDIC v. Amerifund Fin. Inc. 8:11-cv-00840-DOC-RNB 06/03/11 www.mortgagedaily.com/LawsuitFDICAmerifund060711.asp
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