BOA DEATHWATCH: COUNTRYWIDE SLAMMED FOR FIRING WHISTLE-BLOWER ON FRAUDULENT LENDING AND PROCESSING PRACTICES
Posted on September 27, 2011 by Neil Garfield
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WHISTLE-BLOWING FOR FUN AND PROFIT
THANKS TO INVESTIGATION OF SALLY ROBINSON BURKE, AWAITING HER LICENSE AS A DOCUMENT PREPARER IN TUCSON, AZ. CONTACT HER AT SJBURKE09@GMAIL.COM FOR INVESTIGATION SERVICES. LIVINGLIES ENDORSES HER AND WILL SHORTLY OFFER HER SERVICES DIRECTLY TO THE PUBLIC THROUGH THE AMERICAN HOMEOWNERS COOPERATIVE SITE.
Editor’s Note: I was just saying last night that these Ponzi schemes always collapse on themselves. Now the whistle-blowers are not only getting heard, they are getting paid in class action, qui tam actions and other proceedings. But this one is from an unlikely source. Countrywide has been investigated for fraud and found guilty in loan processing and origination and as a result, the employee they fired who was asking them for years to correct these abuses, just made himself a tidy sum of money.
Here are some interesting excerpts from the entire document:
Following an investigation by a duly authorized investigator, the Secretary of Labor, acting through her agent, the Regional Administrator for the Occupational Safety and Health Administration (OSHA), Region finds that that there is reasonable cause to believe that Respondent violated SOX and issues the following findings:
Complainant -
investigated, directed others to investigate, and reported to upper management that company fraud investigators concealed and manipulated findings to hide widespread bank, mail, and wire fraud. Complainant was particularly concerned that ER was engaged in the systematic cover-up of various types of fraud through terminating, harassing, and otherwise trying to silence employees who reported the underlying fraud and misconduct.
investigated, directed others to investigate, and reported to upper management that company fraud investigators concealed and manipulated findings to hide widespread bank, mail, and wire fraud. Complainant was particularly concerned that ER was engaged in the systematic cover-up of various types of fraud through terminating, harassing, and otherwise trying to silence employees who reported the underlying fraud and misconduct.
Complainant participated in an investigation which revealed multiple incidents of egregious baud spread throughout the entire region, including loan document forgery and alteration, manipulation of borrower’ assets and income, manipulation of the company’ automated underwriting system, the
destruction of valid client documents, and evidence that blank templates of bank statements from several different financial institutions were emailed back and forth among–loan- officers in- – - – - various branches for use in forging proof of borrower income and assets.
destruction of valid client documents, and evidence that blank templates of bank statements from several different financial institutions were emailed back and forth among–loan- officers in- – - – - various branches for use in forging proof of borrower income and assets.
Examples of the fraud revealed by these investigations include, but are not limited to, loan document forgery and alteration, underwriting system, the destruction of valid client documents, evidence that blank templates for bank statements were emailed back and forth among loan officers in various branches document forgery, document alteration, destruction of genuine income documents, and other improper and/ or fraudulent activities in order to obtain funding for loans, the destruction of documents, loan’ manipulation, the knowing submission of false documents, and conspiracy . .. . with outside business partners to-obtain loans for such businesses Complainant also engaged in protected activity under SOX when she reported that employees -
who attempted to report underlying wire, mail, and bank fraud to ER suffered pervasive retaliation. SOX was enacted to protect whistleblowers who report fraud.6 SOX protects whistleblowers such `as Complainant who report that employees were retaliated against for reporting the very frauds SOX was designed to preventRespondent management had extensive knowledge of Complainant protected activity.-
who attempted to report underlying wire, mail, and bank fraud to ER suffered pervasive retaliation. SOX was enacted to protect whistleblowers who report fraud.6 SOX protects whistleblowers such `as Complainant who report that employees were retaliated against for reporting the very frauds SOX was designed to preventRespondent management had extensive knowledge of Complainant protected activity.-
Order
1. Respondent shall pay Complainant back wages, less interim earnin@at the rate of
1. Respondent shall pay Complainant back wages, less interim earnin@at the rate of
(1) $100.96 per hour for a 40 hour workweek from September 8, 2008 to December 31, 2008,
(2) $110.50 per hour for a 40 hour workweek from Ianuary 1, 2009 to December 31, 2009
(3) $114.92 per hour for a 40 hour workweek from Ianuary 2010 to December 2010, and
(4) $119.51 per hour for a 40 hour workweek from Ianuary 2011, plus any additional
terminated, until Respondent makes the Complainant a bonafide offer? of reinstatement. Respondent shall pay Complainant interest on the back wages in accordance with 26 U.S.C.6621 Respondent pay. Complainant compensatory damages in the amount $37,998.00, which is- comprised of. costs Complainant has incurred to complete a Bachelor’s Degree and obtain an additional professional certification to improve her opportunity for employment, commuting costs to travel to work for a new. job, and- – mediation costs. Respondent shall also pay Complainant the value of the Key Associate Stock Options, Key Associate Restricted Stock, 401k Match, Defined Benefit Pension, and paid vacation that would have been granted to Complainant had.she not been terminated. – . -
- Respondent shall pay- Complainant attorney fees in the amount of $229,36400Respondent shall immediately reinstate Complainant to her former position at BofA with all the pay, benefits, and rights she had before her- termination. .
5. Respondent shall post the- attached “Notice to Emp1oyees” in a . .
conspicuous- place its office(s), including. all places where notices for employees are customarily posted and on the company’ internal website, and maintain for a period of at least 60 consecutive days from the date of posting. Said Notice to Employees shall be signed by a responsible Respondent official and the date of actual posting shall-be shown thereon.
6. Respondent shall not retaliate or against Complainant in any manner for instituting or causingto be instituted any proceeding under or related to SOX. -
7. Respondent shall provide Complainant a neutral employment reference, to include dates of employment, job title, andfinal wage rate, to all potential employers regarding Complainant., . .exercise of her rights under the whistleblower provisions of SOX and of any references to Complainantis termination.
Respondent-and Complainant have 30 days from thereceipt of these Findings to file objections and to request a hearing before an Administrative Law Iudge lf no objections are filed these Findings will become final and not subject to court review.
Related articles
- Countrywide Whistle-Blower Had Alleged Subprime Fraud (online.wsj.com)
- Op-Ed Contributor: To Save on Health Care, First Crack Down on Fraud (nytimes.com)
- Facing Complaints, S.E.C. Opens Whistle-Blower Office (dealbook.nytimes.com)
- Nevada AG Catherine Cortez Masto Destroys BofA in New Lawsuit (news.firedoglake.com)
- Is the SEC Covering Up Wall Street Crimes? (wilderside.wordpress.com)
- HMM: Whistle-blowers allege corruption, cartel ties. wo former law enforcement officers allege t... (pajamasmedia.com)
- Report: SEC has destroyed Wall Street probe records for 20 years (content.usatoday.com)
- BLOWING THE WHISTLE ON A 'WHISTLE BLOWER' (via Desertpeace) (allianceforanidiotfreeamerica.wordpress.com)
- Countrywide protected fraudsters by silencing whistleblowers, say former employees (tipggita32.wordpress.com)
- 'Cut-and-paste' forgery hits CBA (theage.com.au)
Bank of America Will Pay Whistleblower $930,000Bank of America can’t catch a break. A whistleblower, Eileen Foster, brought fraud at Countrywide Financial Corp. to the attention of Countrywide’s Employee Relations Department shortly after Bank of America acquired the company. Bank of America then allegedly fired the whistleblower in retaliation, although the bank claims the termination was due to the employee’s management style, not the fact she led an investigation that uncovered fraud.
Published or updated September 26, 2011. If you enjoyed this article, subscribe to theRSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
The U.S. Department of Labor says Bank of America must reinstate the employee and pay her $930,000 for lost income, interest, damages, and attorney fees.
Countrywide specialized in subprime loans, and the employee’s investigation uncovered wire, mail and bank fraud at the company, as a matter in the course of doing business. Countrywide used predatory lending tactics and falsified loan documents.
As a result of the investigation, six branches of Countrywide in Boston closed. After the closings, Countrywide agreed to pay $3.1 million to Massachusetts and $3 billion in loan modifications. According to the Department of Labor, also as a result of the investigation, Bank of America retaliated by firing Foster.
From the Wall Street Journal:
Countrywide then initiated an investigation into allegations of harassment and misconduct by Foster, the report says. The report says Foster wasn’t initially informed of the investigation but several employees were interviewed for it. One employee who was interviewed went to the general counsel and the chief operating officer of Bank of America to express concern Foster was unfairly targeted, the report says.An employee told the Department of Labor the investigators asked “leading questions and had a profoundly biased view” of Foster.Foster was fired in September 2008. An executive said she engaged in “inappropriate and unprofessional conduct with your staff and displaying poor judgment as a leader,” according to an email cited in the government’s report.
Bank of America will repeal the Department of Labor’s decision.
Despite protections for whistleblowers, many who believe they witness unethical activities in an organization may not raise the issue to the appropriate authorities. The culture of an organization plays a larger role in decisions to go against co-workers and superiors than documented protections. Even though retaliation is not permitted, the fear is great enough to keep most people silent. Particularly when the unemployment rate is high, employees are willing to stay silent and keep their jobs. The Department of Labor is charged with ensuring that employees are not afraid to speak out when there is evidence of wrongdoing.
In addition to this issue for employees, consumers should also pay attention. While Countrywide Financial (Bank of America Home Loans) is not the same entity that provides savings accounts and credit cards within Bank of America, it is part of the larger organization. Interest rates and customer service tend to be the biggest drivers for the choice of banks, but the attitude of the larger corporation can legitimately play a role in these decisions, as well.
While Bank of America may not be continuing any possible retaliation, they are appealing the decisions. Of course, this is the only possible course of action because in the end, the company must answer to its shareholders who expect the company to avoid any unnecessary expenses if possible. When shareholders’ priorities are different than customers’ priorities, it may be time to consider alternatives, like credit unions and mutual insurance companies.
Published or updated September 26, 2011. If you enjoyed this article, subscribe to theRSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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I wish, too, that companies that make money off customers would consider the needs of those customers at least as important as the needs of the shareholders. (Yeah, I crack *myself* up, too.)