In a Grand Jury indictment written by the United States Attorney's Office for the Southern District of Florida, filed on January 7, 2014, one of the seven (7) indicted defendants was indicted as "a loan officer for Sun Trust Mortgage." (Paragraph 32, p. 6, in Download US Atty SD FLA Indictment Bank fraud and wire fraud (M Fraud N.,C.) F'd 01.07.14.) This individual is one of the few bank employees/officials to be criminally indicted as a result of allegedly criminal activities during the great financial crisis, if he is not the first of his kind.
The alleged conspiracy in which the former bank officer allegedly participated, included the signing and processing of false affidavits and declarations, and other things which were arguably released in the national mortgage fraud settlement as to five mortgage servicers. Two of the mortgage servicers released by the Federal Government and by the State Attorneys General who participated in that national settlement, are also two of the Banks which were allegedly the object of the conspirators in the recently filed criminal indictment: Bank of America and Wachovia n/k/a Wells Fargo.
This means that at least as to the extent of the conduct released in the course of the national mortgage fraud settlement, the parties released including B of A and Wells Fargo would claim that they are immune from suit now, assuming that a civil release would bar a criminal prosecution in this case.
Two other Banks are also identified in the current indictment as objects of the conspirators' mortgage fraud: Regions Bank and the indicted individual loan officer's employer, Sun Trust. They are neither of them named in the releases in the national mortgage fraud settlement. It is difficult to see how either Regions or Sun Trust could have standing to raise the national mortgage fraud settlement releases as a defense to their criminal prosecution.
Which raises questions here.
Why is an individual loan officer of Sun Trust indicted because of his alleged fraudulent, conspiratorial mortgage-related conduct (see ¶ 37 p. 6; Count I ¶ 2 pp. 7-8 and ¶¶ 8-19 pp. 10-14; and Count II ¶ 2 pp. 15-16 and ¶ 5 pp. 17-22), but not his bosses or any of his co-workers at Sun Trust?
Particularly when at one point, the indictment lists fifteen (15) specific instances of alleged criminal mortgage fraud conduct (specifically, alleged bank fraud) including "[s]ubmission of fraudulent mortgage loan application, closing, and related documents" for the purpose of obtaining loans to purchase land and for the purpose of obtaining loans to begin construction on that land -- and 9 out of the 15 specific instances involved fraudulent submissions accepted by Sun Trust? Is it credible that one and only one loan officer had the power to totally review every document in every single one of these (and certainly other) loan submissions -- and that no-one else at the bank, not his superiors, not his coworkers, no-one -- reviewed either a single one of these documents or this one loan officer's job performance?
These are only some of the questions raised here. Let's start with asking these questions and we'll work our way through others.
The national mortgage fraud settlement is examined in a four-part series here and on Insurance Claims and Issues Weblog. The series began on Monday, Jan. 30,2012 on Insurance Claims and Issues Weblog. Part 2 was posted on Tuesday, Jan. 31, 2012 on Insurance Claims and Bad Faith Law Blog, and Part 3 was posted on February 1, 2012 on Insurance Claims and Issues Weblog. The final leg of the series, Part 4, was posted here on Insurance Claims and Bad Faith Law Blog on February 2, 2012.
© 2014 by Dennis J. Wall. All rights reserved. No claim to original U.S. Government works.