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Ethics and Consumer Financial Services Law

Thanks to all who attended my November 9 presentation in New York on Ethics and Consumer Financial Services Law. You can obtain a copy of the powerpoint here: Ethics6. The handout can be accessed here: Avoiding ethical pitfalls 20121105.

NYC Grand Jury Indicts Bank for Mortgage Fraud

The New York Law Journal reports today (under a pay wall) that the Manhattan DA has indicted Abacus Federal Savings Bank and 11 of its former employees for “residential mortgage fraud” in addition to other alleged criminal acts arising from mortgage loan originations and sales.

The indictment (available here) alleges that the bank and former employees “participated in a systematic and pervasive mortgage fraud scheme” by falsifying mortgage applications to allow “otherwise unqualified borrowers” to obtain mortgages backed by Fannie Mae.

According to the 95-page indictment, the alleged fraud was perpetrated at every level of the bank’s application process – origination, processing and underwriting. The alleged fraud included the creation of applicants’ false employment, asset and income documents, which netted the bank “many millions of dollars in commissions” and fees. In addition to these allegations, the indictment alleges that the bank “specifically trained [its employees] to carry out the fraud in a manner to avoid suspicion.”

According to Abacus Federal Savings Bank’s website, it has six branches in New York City, Long Island, New Jersey and Philadelphia.