By now, most of our readers and many in the mortgage industry know that we have the largest federal false claims action in the U.S., HUD’s $2.4 billion case against Allied Home Mortgage and CEO Jim Hodge. We have proudly represented former Allied employees who didn’t get paid and the American taxpayers who the government says were fleeced for hundreds of millions of dollars. Naturally, we try to stay atop of all things Allied.  The latest news comes from London. Lloyds of London, to be exact. Several days ago the underwriters at Lloyds filed suit seeking to get out of paying claims on behalf of Allied.

According to the complaint, Lloyds is not obligated to defend Allied in our case because the policy excludes “deceptive trade practices” and because our fraud suit does not arise from Allied’s performance of professional services.

Since we are involved in the underlying lawsuit against Allied, we are unable to comment specifically on Lloyd’s suit. We can say, however, that insurance policies typically exclude claims of fraud from coverage. This is exactly what Lloyds claims in its suit.

The complaint brought by the government against Allied and Hodge claims that Allied “originated loans out of hundreds of branches never disclosed to HUD, submitted knowingly false statements to HUD concerning its branch operations and accumulating sanctions, and lied to conceal its dysfunctional operations from HUD.”

Lloyds says it has no duty to defend Hodge nor to pay any claims arising out of the lawsuit based on the language in its policy. The complaint says they not only want to get released from defending the case they also want the defendants to pay back any money spent by the insurer for Allied’s legal bills to date.

The noose continues to tighten around Allied, Hodge and his henchmen. Although Hodge has apparently started another mortgage company, its remains extremely unlikely that he could ever earn enough to pay all the claims against him and his companies.

A copy of the complaint is available from the United States District Court for the Southern District of New York’s PACER system. If you don’t have access, drop us a line and we will gladly send it to you.

The law firm of Mahany & Ertl represents whistleblowers in suits against banks, mortgage servicers, health care companies and government contractors. If you know of fraud in which taxpayers were harmed, give us a call. Whistleblowers are entitled to up to 30% of what is collected on behalf of the government. We also represent bank mortgage company employees with claims for unpaid commissions.

For more information, contact attorney Anthony Dietz at adietz@mahanyertl.com. For immediate help, contact attorney Brian Mahany at brian@mahanyertl.com or by direct dial at (414) 704-6731. All communications are covered by the attorney - client privilege and are kept in confidence.

Mahany & Ertl - America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Services available in may jurisdictions.

For those wondering who Scott Anderson is, join the club. We have been asking that question too. He has “signed” hundreds of mortgage documents (if not tens of thousands) as a Vice President of MERS, the infamous Mortgage Electronic Registrations Systems, Inc. Several people, potential clients and readers of this blog have documents “signed” by Mr. Anderson. One astute person, however, realized that Mr. Anderson’s signature varies greatly. Same with the notary’s signature. (We have not compared the signatures but have absolutely no reason to disbelieve the information we have received.)

Last year, the rage was “robo-signing” by MERS and others, including some well known lenders. Robosigning occurs when a person signes hundreds or thousands of documents a day attesting that he has read each and is familiar with the transaction. That one person can be familiar with tens of thousands of mortgage files and can attest that each is accurate is a farce.

If robo-signing is bad, forgery is worse. We have been seeing and hearing of many cases where critical mortgage documents were not signed by the people who said they signed them. In other words, they are forgeries.  That a banker would forge a mortgage document is terrible. But notaries too? Apparently.

We have even seen mortgage documents signed by lawyers for the bank.  The forgeries and improperly signed documents are just starting to surface as more people become aware of the problem and more foreclosures proceed through court.

Forgery is a crime.  The banks and their lawyers might argue that it was done for “convenience” but it is still against the law. If bankers, lawyers and even notaries can freely forge documents there can be no integrity in the system.  If you are aware of forged documents that were used against you, let us know.  We are currently investigating several cases against several large lenders and foreclosure mills (law firms that represent lenders) including Bank of New York, Bank of America, Wells Fargo and Blommer Peterman. [An investigation does not mean that we have concluded any wrong doing by any party named in this post.]

And if anyone knows Scott Anderson, let him know we would love to meet him (or them).

–

Mahany & Ertl is a full service law firm. As a general rule, we do not handle foreclosure defense work. Instead, we sue lenders and loan servicers in state and federal court for their wrongful and illegal conduct.  Presently we have the largest federal false claims act case in the United States against a lender - HUD’s $2.4 billion fraud case against Allied Home Mortgage.

If you think you have a case that meets our criteria and feel that you have been denied justice, give us a call.  For a confidential consultation, contact attorney Anthony Dietz at adietz@mahanyertl.com. For immediate assistance, contact attorney Brian Mahany at brian@mahanyertl.com or by telephone at (414) 704-6731 (direct).

Mahany & Ertl - Giving Homeowners a Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota.  Services available in many states.

Forged mortgage documents are nothing new. Even making that statement pains me greatly. Once upon a time, no one would dream of a bank, mortgage lender or lawyer routinely forging documents. Today, its common place. A case pending before the Florida Supreme Court is set to determine if a bank that gets caught with forged documents gets a 2nd bite at that apple. We hope the justices in Florida send a clear message to Wall Street and big lenders and answer that case with a resounding “NO”!

According to published reports, Roman Pino went through a foreclosure of his home in 2008. During the case it was discovered that critical bank documents were signed by a “robo-signer” and were improperly notarized. A deposition of the bank’s lawyers apparently revealed widespread robosigning, forgeries and back dated documents. Instead of facing trial, Bank of New York dismissed the case. Sounds like a proper ending, right?

It might be if the story ended there but it doesn’t. Bank of New York filed another suit, this time claiming they had located the “real” paperwork. In the words of writer Charles Seavey, these were the “ta da” documents, or as I call them, the “sorry judge, we lied about the original foreclosure documents but this time we are really really telling the truth so believe us.”  If this sounds far fetched, its not. We are getting ready to sue Bank of New York and their lawyers here in Wisconsin for a case with remarkably similar facts.

The question being considered by the Florida court is whether a lender can dismiss a foreclosure, only to come back and refile based on the same facts. The case was argued last week - a YouTube video of the oral argument is available here from firedoglake.com - but may take months before its decided. After listening to the entire 43 minute court proceedings it isn’t clear which way the court is leaning.

This case is significant because it is being heard by the Florida Supreme Court. Any decision would be binding on all the trial courts with that state.

Forged documents, papers that aren’t properly notarized and back dated assignments and mortgages are a huge problem. If you believe your lender foreclosed on you using forged paperwork you may have a claim against the bank, loan servicer or law firm representing the bank.

If you think you have a case and would like to confidentially discuss it with us, contact attorney Anthony Dietz at adietz@mahanyertl.com. For immediate assistance, contact attorney Brian Mahany at brian@mahanyertl.com or by telephone at (414) 704-6731 (direct).

Mahany & Ertl is a full service law firm. As a general rule, we do not handle foreclosure defense work. Instead, we sue lenders and servicers in state and federal court for their wrongful and illegal conduct including forgery. If you think you have a case that meets our criteria and feel that you have been denied justice, give us a call. Presently we have the largest federal false claims fraud case in the United States against a mortgage lender, HUD’s $2.4 billion case against Allied Home Mortgage. Large or small, we help homeowners pursue fraud cases against lenders.

Mahany & Ertl - America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota.  Services available in many states.

No one likes FATCA, the Foreign Account Tax Compliance Act. Passed by Congress in 2010, the law requires both U.S. taxpayers and foreign banks to report Americans with foreign accounts. U.S. taxpayers are already subject to FBAR filing rules. (An “FBAR” is a Report of Foreign Bank and Financial Accounts.) Having a second report with different rules adds more confusion and a greater liklihood of fines if a mistake is made.  Foreign banks hate the law because it forces them to become informants for the IRS and adds a tremendous amount of extra work.

Although foreign banks have long complained about the law, the volume and frequency of those complaints is increasing. A sample of headlines this week reads as follows:

• “FATCA’s ‘Vulnerabilities Evident’, Washington Expert Claims, Calls For Repeal” - MarketWatch
• “…Banking Execs Say Majority of Banks to Miss FATCA Deadlines” - MarketWatch
• “Why FATCA Should be Repealed” - UPI
• “Banks Expect To Miss FATCA Deadlines” - Accounting Today
• “Most banks will miss FATCA deadlines” - International Adviser
• “Industry Concerned About Extraterritorial Tax Clampdown Plan” Financial Times
• “KPMG - FATCA Deadline Will Be Missed”

The administration needs money meaning that efforts to repeal FATCA will face a difficult road. Budget analysts say that the new law will raise $800 million. Industry folks estimate the cost of compliance may be significantly greater, however. Unfortunately, increased accounting and bank fees are ultimately born by the taxpayer anyway.

While banks are complaining, some governments are jumping on the bandwagon and have entered into reciprocal agreements with the IRS. Just as the administration wants to combat tax evasion, so do other developed countries like the United Kingdom and Germany.

The voices in opposition continue to grow louder, however, we believe that FATCA will survive largely intact. Only a change in administration could likely lead to the law’s repeal at this point.

Whether or not FATCA is repealed, Americans with unreported foreign accounts are still at tremendous risk. The level of international cooperation is at an unprecedented level and more and more countries are entering into tax exchange agreements allowing the IRS to obtain records from foreign banks.

Remember, that even if FATCA is repealed, U.S. taxpayers are still required to report most foreign accounts and file annual FBARs. The penalty for not filing an FBAR may involve 5 years of prison, a civil penalty of $100,000 or 50% of the highest account balance for each year the account is unreported.

Whatever Congress may do with FATCA has little impact on taxpayers with unreported offshore bank accounts. Bank secrecy is largely dead.  If you have an unreported foreign account, now is the time to come forward. The IRS is currently offering an amnesty program (the offshore voluntary disclosure program or “OVDI”) for those taxpayers who have failed to file the required annual FBAR forms identifying their offshore holdings. The penalties are steep (27.5%) for most taxpayers but the program avoids audits, onerous monetary penalties and keeps participants from worrying about criminal prosecution.

We believe the decision to disclose is clear. How one should disclose, however, requires a knowledgable tax lawyer or CPA well versed in foreign reporting issues. Amnesty may not be the best deal for everyone.

For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at brian@mahanyertl.com.  All calls are protected by the attorney client privilege and are kept in strict confidence. Our tax lawyers have helped many taxpayers with a wide variety of foreign reporting issues including FBARs, the new FATCA requirements, tax amnesty, OVDI, voluntary disclosures, foreign gift reporting and Swiss accounts.

Mahany & Ertl - America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. IRS services available worldwide.

The grand daddy of federal false claims act cases (whistleblower law) is HUD’s $2.4 billion case brought against Allied Home Mortgage. That is music to our ears since our firm represents the whistleblower in that case. Although we are aware of other billion dollar cases right now, very few are brought in local state courts. That may be changing.

Last week we wrote about New York’s landmark case against Sprint Nextel seeking $300 million for unpaid taxes and damages. Since then we have received several calls wanting to know more about state false claims laws.

Many states have their own whistleblower statutes and some are quite generous. Currently 29 states have false claims laws. Several cities have them too including Chicago and New York City. This means if you know of fraud affecting state or municipal taxpayers in those places you can also bring an action.  State cases often involve padded expenses or substandard work charged at premium prices on road and public improvement projects.

One of the states with a generous whistleblower law is New York. Acting on a complaint filed by a whistleblower, New York’s attorney general filed an action against Sprint Nextel last month accusing the telcom giant of defrauding the state of $100 million in taxes.  Under N.Y. law, those damages could be trebled meaning the state could collect $300 million.

N.Y.’s law allows the whistleblower to receive up to 25% of the amount recovered meaning the whistleblower could walk away with a check for $75,000,000.00 (less taxes of course)!

New York’s Attorney General Eric Schneiderman called the case a “first of its kind.” By that he means that this is the first case filed under N.Y.’s whistleblower law for unpaid taxes.  (The federal false claims act does not apply to taxes, however the IRS has its own cash award program.) The whistleblower laws in many other states also extend to unpaid taxes.

New York has accused Sprint of not collecting taxes of flat rate telephone access plans. Instead of separating out interstate and in state calls, the phone company lumped the charges together and did not charge customers the proper tax amount. Sprint denies the charges.

New York’s law, and that of most other states, is modeled after the federal law which was originally passed just after the Civil War. A person who has inside knowledge of fraud can file a lawsuit in state court. The case is filed under seal meaning it is secret.  Once filed, the whistleblower must immediately notify the state attorney general and turn over all the information in her possession to document the fraud. The attorney general’s office then has 60 days to investigate and decide whether or not to intervene in the case and adopt it. If necessary, the state can seek more time from the court to investigate.

Under most state programs, the state has several options. It can simply take over the case, intervene and work with the whistleblower or simply refuse to become involved. If the latter happens, the whistleblower can proceed alone but often the case is simply dismissed at that point. If the whistleblower does proceed alone, any recovery goes to the state and the court determines how much the whistleblower should receive in compensation.

By allowing whistleblowers to file their own suits against tax cheats, New York’s law, and that of many other states, is more powerful than the federal law.

As more and more people get fed up with high taxes, fraud and corruption, more and more whistleblowers are coming forward. Ripping off the government is not a victimless crime. Fraud against the government often means fewer services are available for the truly needy and almost always means higher taxes. In the case of health care fraud, it often means unnecessary medical procedures for patients. With contracting fraud, it could mean substandard equipment for our military or unsafe roads and buildings.

Although doing the right thing is what motivates most whistleblowers, getting a big chunk of what the state of federal government collects is certainly a nice incentive too.  In most instances, the whistleblower is an employee of the company committing the fraud but not always. Employees that do come forward are usually protected by both state and federal law against retaliation.

If you have knowledge of fraud involving government contracts, federally insured mortgages or Medicare reimbursements, give us a call.  All communications are protected by the attorney client privilege and kept in strict confidence. For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at brian@mahanyertl.com.

Mahany & Ertl - America’s Fraud Lawyers.  Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Legal services available in many jurisdictions.

Most of our readers know that we sue banks and mortgage lenders on behalf of homeowners victimized by predatory foreclosure practices. Lately, we have been gathering information against Wells Fargo, Bank of America, Bank of New York and others after hearing horror stories of robo-signing, forged documents and even foreclosing against a couple who never missed a payment.  The other part of our business, however, is suing banks on behalf of taxpayers. This post discusses Swiss bank UBS’ attempt to dismiss a suit against it by the Federal Housing Finance Authority.

The UBS case is much like our landmark $2.4 billion claim brought on behalf of taxpayers against Allied Home Mortgage. Many lenders misled Fannie Mae and Freddie Mac into purchasing risky or toxic mortgage debt. Most residential mortgages today are sold. That means that the bank who loans you the money to purchase your home usually doesn’t hold the paper. Once the mortgage is written, the note is sold to investors.

To insure that there is liquidity and money available for homebuyers when needed, Freddie Mac and Fannie Mae guaranteed many of those loans.  Although technically not government entities, the two agencies are backed by the government. That means when the agencies ran out of money, the government stepped in. In 2008, after running low on funds to pay the mortgage guarantees, the government took over both agencies.

Last year, the government sued UBS bank saying that it misrepresented the mortgages being sold to investors. Specifically, they say that loans sold by UBS did not meet underwriting guidelines resulting in billions of losses to taxpayers.

UBS denied the allegations and argued that the government waited too long to bring the claims. The latter point has become an issue as the housing crisis dates back to 2007 and state and federal laws say that most complaints must be brought within a few years of being discovered.

In this case, the court ruled that the Housing and Economic Recovery Act of 2008 (HERA) supercedes the normal time limits and gave the government more time to file suits - 3 years from the date it took over Freddie Mac and Fannie Mae.  HERA was rushed through the Senate during a special weekend session. It authorized the government to take over both agencies.  The judge noted that the 2008 law specifically charged the government with taking such actions as necessary to “preserve and conserve” their assets. From that language, she gathered it was Congress’ clear intent to give the government more time to bring claims.

In addition to UBS, the government filed 16 other cases against large mortgage lenders including Bank of America, Chase, Citigroup and Ally. Although its now been more than 3 years since the government took over both agencies, there is still $100 billion in claims pending. Last week’s decision should make those banks nervous.

We like the case because it reaffirms that banks can be held liable for the actions of third parties. U.S. District Court Judge Denise Cote ruled that a “defendant cannot simply claim that she blindly reported information given to her by third parties and thereby avoid liability for inaccuracies that made their way into the offering materials.”

To date the government has lost $150 billion on Freddie Mac and Fannie Mae.

Many of the largest fraud cases against lenders were started by whistleblowers - concerned workers who don’t like seeing taxpayers getting ripped off.  If you work or previously worked for a bank and know of illegal conduct resulting in losses to the government, give us a call. For more information, contact attorney Anthony Dietz at adietz@mahanyertl.com. For immediate assistance, contact attorney Brian Mahany at brian@mahanyertl.com or by telephone at (414) 704-6731 (direct). All calls are protected by the attorney client privilege and kept in strict confidence.

Mahany & Ertl is a full service law firm. As a general rule, we do not handle foreclosure defense work. Instead, we sue lenders and servicers in state and federal court for their wrongful and illegal conduct including fraud and forgery. If you think you have a case that meets our criteria and feel that you have been denied justice or know of losses to taxpayers, give us a call.

Mahany & Ertl - America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota.  Services available in many states.

[Ed. Note: This post is reprinted in its entirety from Attorney James McGrath's Internal Investigations Blog. Jim is a friend and great lawyer specializing in Foreign Corrupt Practices Act cases and internal corporate investigations. As you read this story and his blog (and we recommend that you follow Jim's blog if this is a topic that interests you), please remember that we are interested in the other sides of these cases - whistleblowers who come forward to report fraud and corporate abuse.]

Like passersby to a horrific accident on the highway, witnesses to the unfolding Wal-Mart de Mexico scandal continue to gawk at the carnage.  And like the speeding, in-and-out-of-lanes, reckless driver that causes his own near-fatal crash, the men at the wheel of the Wal-Mart bus – executives in Mexico and in Bentonville – are hard-pressed to garner sympathy.  The company’s internal investigators should not share that same fate simply because the “tone at the top” seemed wrong.

The complete sets of facts in this case are yet to be determined.  Indeed, there are now going to be two of them:  those attendant upon the underlying Mexican bribery and those attendant upon Bentonville’s purported sabotaging of its in-house investigation.  The first is an FCPA matter in its purest form, while the latter is more of a corporate governance issue.  Regardless, and as any good litigator will attest, fact-finders – and the on-looking public – cannot make an informed decision on guilt or innocence until all of the evidence is produced.

Nevertheless, some of the facts set forth in The New York Times piece that broke this story seem firmly established, in that they were gleaned from Wal-Mart’s own records.  They deal primarily with the timeline and progress of the company’s own Corporate Investigations team and the seemingly commendable job that it did in probing the illicit payments in Mexico at the heart of this FCPA matter.

According to the Times, the internal probe of payoffs in Mexico started in 2005 and was under the nominal direction of Kenneth H. Senser, then Wal-Mart’s Vice President for Global Security, Aviation and Travel. His right-hand man was Joseph R. Lewis, the company’s Director of Corporate Investigations and former top F.B.I. official. Just before this matter arose, these two had found their 70-person unit “wholly inadequate for an organization the size of Wal-Mart” and together they led an effort to strengthen it.

By the time the Mexico bribery allegations surfaced, they had succeeded in hiring four “special investigators” that would be assigned the “most significant and complex fraud matters.” In addition, Corporate Investigations was also to be tasked with handling all allegations of misconduct by senior executives.

One of these “special investigators,” Ronald Halter, was assigned to lead the preliminary inquiry into the Mexico corruption matter.  He had been with Wal-Mart only a few months, but he had spent 21 years as an investigator with the F.B.I. and spoke Spanish.  He would get help from a senior auditor, Bob Ainley, and several Spanish-speaking junior auditors who were sent to Mexico City with him. They started work at Walmex’s corporate headquarters on November 12, 2005 and by the end of that first day had found 441 payments that might have been bribes.

As expected, Halter and his team ran down leads, interviewed witnesses, and accumulated documentation.  The story provided to them by former Walmex executive and whistleblower, Sergio Cicero Zapata, apparently was corroborated by documentary evidence and in a confidential report to his superiors, the lead investigator wrote that there was “reasonable suspicion to believe that Mexican and USA laws have been violated.”  Halter recommended that Wal-Mart expand its investigation.

Confronted with this evidence of corruption in Mexico, top Wal-Mart executives ultimately focused more on damage control than on rooting out wrongdoing, as the Times so aptly put it.  This took the forms of attempting to kill the messenger and frustrating further inquiry by a number of internal machinations.  On the second point and most astoundingly, it included ultimately transferring primary responsibility for the internal probe to Walmex’s general counsel, who was himself among those alleged to have authorized bribes.

By the Times account, Joseph Lewis seems to have backed his people in the field.  And when he was apprised of the transfer of the investigation to Walmex’s general counsel and the lawyers prompt exoneration of his fellow executives, his appraisal was scathing. “Truly lacking,” he wrote in an e-mail.

Lewis had an investigative predecessor and an ally in Maritza I. Munich, then General Counsel of Wal-Mart International.  “The wisdom of assigning any investigative role to management of the business unit being investigated escapes me,” she wrote in an e-mail to top Wal-Mart executives when that move was finally made.  The investigation, she urged, should be completed using “professional, independent investigative resources.”

Munich was familiar with the challenges of avoiding corruption in Latin America.  Before joining Wal-Mart in 2003, she had spent 12 years in Mexico and elsewhere in Latin America as a lawyer for Procter & Gamble.  At Wal-Mart, she had pushed the board to adopt a strict anti-corruption policy that prohibited all employees from “offering anything of value to a government official on behalf of Wal-Mart.” It required every employee to report the first sign of corruption, and it bound Wal-Mart’s agents to the same exacting standards.

As the original recipient of the Cicero e-mail reporting the bribes in Mexico, she had hired Juan Francisco Torres-Landa, a prominent, Harvard-trained lawyer in Mexico City, to debrief Cicero within days. Ms. Munich even flew in from Bentonville for his third debriefing.  It was from these humble beginnings that the investigation susequently made its way to Lewis’ desk.

Despite this support from a C-suite occupant, the Corporate Investigations team felt resistance to their mission in general and the Mexico probe in particular.

By the time the corruption in Mexico allegations made it to him, Lewis had ruffled executive feathers.  After doubling his unit’s caseload to roughly 400 per year, some grumbled that he acted as if he still worked for the F.B.I.  There he had supervised major investigations. They accused him and his people of being overbearing, disruptive, and naïve about the moral ambiguities of doing business abroad.

At the same time, Walmex executives were continuing to complain to Bentonville about the investigation; protests that “just never let up,” according to a Timessource.  Another source proffered his or her belief that Wal-Mart would have reacted “like a chicken on a June bug” had the allegations concerned the United States.  But because executives saw Mexico as a country where bribery was embedded in the business culture, it simply did not merit the same response.

In the end, these considerations – the disruption that investigations posed to doing business, the necessary moral ambiguities about doing it abroad, and the latent corruption perceived in Mexican business culture – appear to have won out.

Seemingly spurred by this decision, Maritza Munich left the company on February 1, 2006.  Before leaving, she drafted a memorandum that argued for expanding the investigation and giving equal respect to foreign anti-corruption statutes.  “The bribery of government officials,” she noted dryly, “is a criminal offense in Mexico.”

She also warned against allowing implicated executives to interfere with the investigation.

“Given the serious nature of the allegations, and the need to preserve the integrity of the investigation,” Munich wrote, “it would seem more prudent to develop a follow-up plan of action, independent of Walmex management participation.”

Joseph Lewis appears to have been a casualty of his own investigation, as well.  According to the Times, he left Wal-Mart earlier this year.  It does not indicate the circumstances of his departure, although it is hard to think that his work on this case burnished his chances for a friendly work environment and advancement in Bentonville.

It won’t be known whether Wal-Mart’s “tone at the top” and “buy-in” was for real or not until this matter is fully re-investigated and finally put to rest.  But as far as conducting the original investigation goes, the company’s own records appear to document a total failure of adherence to elemental – let alone, best – practices.

In speeding toward construction targets, store openings, and profitability, the people at the top of the Wal-Mart heap seem to have unwisely hurtled down an icy road.  That recklessness should not sully the reputations of the Corporate Investigations unit and its people who worked on this case and look to have been the only ones to recommend applying the brakes.

In order to foreclose on a home, a bank must prove that the homeowner has defaulted on the loan and that the bank owns the mortgage. Because mortgages today are routinely sold to investors, banks usually hold an assignment of the mortgage showing they are the rightful owner. As we learned in the “robo-signing” scandal, the banks often can’t prove they own the paper.

While properties were increasingly weekly, no one really worried to much about a default. The buyer could simply sell the property and every one would be made whole. Obviously, the bottom dropped out of the market several years ago. The banks dirty secrets like Robo signings and forgeries probably would have gone on forever if the market had not crashed.

During the robo-signing scandal, it became clear that the banks were using low level employees to sign affidavits attesting that the borrower was in default and that the bank held the mortgage. Often, these employees had no personal knowledge of the loan whatsoever. They simply signed hundreds of affidavits per day. These affidavits clearly were fraudulent.

More recently, we have begun to encounter loan documents that were forged!  The signatures of the borrowers or lenders were not genuine. Because most mortgage documents are notarized and forgery is a crime, the banks’ conduct has become criminal.

Notary publics are the people entrusted to witness and endorse signatures. A notary’s seal means that the notary has witnessed the signing of the document and personally knows the signers or has obtained some time of identification to verify their identity. Courts routinely accept notarized documents as authentic.

For hundreds of years, we have relied on notarized documents. As a disinterested party, all sides could generally rely on a notarized document being real. Once the banks started employing the notaries, that notion ended. In the name of “business convenience,” bankers have subverted the rule of law and the integrity of the judicial process.

Back in 1984, our U.S. Supreme Court recognized the importance of notaries and the weight their signature and seal carries. In a case challenging Texas prohibition on allowing non U.S. citizens to be notaries. The court had this to say about the importance of notaries:

“With the power to acknowledge instruments such as wills and deeds and leases and mortgages; to take out-of-court depositions; to administer oaths; and the discretion to refuse to perform any of the foregoing acts, notaries public in Texas are involved in countless matters of importance to the day-to-day functioning of state government. The Texas political community depends upon the notary public to insure that those persons executing documents are accurately identified, to refuse to certify any identification that is false or uncertain, and to insist that oaths are properly and accurately administered. Land titles and property succession depend upon the care and integrity of the notary public, as well as the familiarity of the notary with the community, to verify the authenticity of the execution of the documents…

To be sure, considerable damage could result from the negligent or dishonest performance of a notary’s duties.”

We hear that one register of deeds in North Carolina has brought suit to clean up the mess caused by fraudulent land records. Hopefully the banks that employed these dishonest notaries will be held accountable for the thousands of questionable documents recorded in foreclosure cases across the nation.

If you were the victim of a foreclosure using forged documents, you may be entitled to relief.  Courts are beginning to take notice and question banks. Although a notarized document still caries a great deal of weight, it is possible to challenge those documents. Chances are good that if properly questioned, many bank notaries will admit they never witnessed anyone sign the documents they notarized.  We are aware of one bank that apparently had the notary forge the signature of a bank officer and then notarize her own forged signature!

If you would like to confidentially discuss your case with us, contact attorney Anthony Dietz at adietz@mahanyertl.com. For immediate assistance, contact attorney Brian Mahany at brian@mahanyertl.com or by telephone at (414) 704-6731 (direct).

Mahany & Ertl is a full service law firm. As a general rule, we do not handle foreclosure defense work. Instead, we sue lenders and servicers in state and federal court for their wrongful and illegal conduct including forgery. If you think you have a case that meets our criteria and feel that you have been denied justice, give us a call. Presently we have the largest federal false claims fraud case in the United States against a mortgage lender, HUD’s $2.4 billion case against Allied Home Mortgage. Large or small, we help homeowners pursue fraud cases against lenders.

Mahany & Ertl - Giving Homeowners a Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota.  Services available in many states.

Wireless giant Sprint - Nextel has been accused of defrauding New York tax authorities out of $100,000,000. Under New York’s false claim law, the phone company could also be liable for treble (triple) damages and legal fees. The case is the first whistleblower case filed in the state over aleged unpaid taxes.

Under N.Y,’s law, a whistleblower with inside information can file a suit in state court on behalf of the government. If the state likes the case, it can adopt the case and take over. The whistleblower is entitled to up to 25% of whatever the government collects. For the whistleblower in that size case, any award is certainly a life changing event.

New York’s attorney general says that Sprint failed to collect$100 million in sales tax on flat rate calling plans. Under the state’s tax code, that portion of the bill related to interstate calls is not subject to state tax. They say that the company arbitrarily determined what percentage of charges were not subject to tax.

The lesson here is that these laws have empowered employees and competitors to report fraud. The motivation between those two groups may differ but the result is often the same - a long drawn out audit for the business and a large cash award for the whistleblower.

29 states have joined the federal government and passed false claims act statutes that pay awards to whistleblowers.  There is a great financial incentive for people to report fraud. Although most false claims laws do not include unpaid taxes like the New York law, the IRS has its own whistleblower law. That means unreported taxes, phony medicaid billing, padded defense contractor invoices and questionable federally insured mortgages are all subject to whistleblower claims.

If you know of illegal conduct that costs the government or taxpayers money, you may have a claim. The IRS whistleblower law requires filing a form with the IRS and assisting them in understanding how the fraud is taking place. In false claims act cases, the  whistleblower generally files a law suit in the name of the government. That suit is filed under seal meaning it is secret. The government is then given time to investigate and decide whether or not it wishes to intervene and participate. Only after the government decides can the case become public.

The fraud lawyers at Mahany & Ertl have brought the largest whistleblower case in the U.S. against a mortgage lender. In November of 2011, HUD and the U.S. government intervened in our suit against Allied Home Mortgage and brought a $2.4 billion claim against the lending giant.  While not every case can be the large, whistleblower cases are vital for the economy and leveling the playing field for honest businesses.

If you have information about a fraud, give us a call. For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at brian@mahanyertl.com. All inquiries are kept in strict confidence.

Mahany & Ertl - America’s Fraud Lawyers.  Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Services available in many jurisdictions.

More and more homeowners are securing victories within the court system. Unfortunately, only a tiny fraction of struggling borrowers can afford competent legal counsel. Many homeowners are behind on their payments because of illness, disability or lack of employment. Obviously if they had funds they could pay their mortgage and wouldn’t need a lawyer. This post is dedicated to Ana Casas Wilson, a 49 year old woman suffering from cerebral palsy ( and the misfortune to have a loan with Wells Fargo).

When Wilson was denied a HAMP mortgage modification, she decided to take her battle to the streets. In her case, from a wheelchair in the driveway of a Wells Fargo senior executive’s home. For her efforts, Wilson was arrested. But the publicity she created by exposing Wells Fargo is priceless.

Wilson says that she fell behind but qualified for the federally funded HAMP program and can make the payments. That didn’t stop Wells Fargo from foreclosing on her childhood home, however.

HAMP stands for the Home Affordable Modification Program. It was created and funded through the federal TARP program, the same program that gave billions to bail out Wall Street and big banks.  Whereas the big banks got billions, HAMP was designed to use a small portion of the bail out money to help struggling homeowners. The program is available to help those that need a little financial help through lowered payments and those that are disabled.

The HAMP program requires banks and mortgage servicers to offer relief to delinquent homeowners. Wilson says that she was improperly denied a modification and continued to face foreclosure even though she was able to make payments. According to published reports, a Wells Fargo spokesperson said that the bank is committed to helping people stay in their homes. We say Bull Shit! The spokesperson also said that once a person is serious delinquent, it is often impossible to catch up.

We have been seeing several of the major banks (Wells Fargo and Bank of America to name two) simply refuse to take the payments. It’s a vicious cycle that spells doom for homeowners.

Recently we have begun a lawsuit against Bank of America on behalf of a homeowner much like Wilson. Despite receiving the first two of three HAMP trial payments, with no reason given, the bank simply refused the third and continued with foreclosure.

In Wilson’s case, she took her battle to the pavement. Wilson and approximately 80 other protestors showed up outside the home of Wells Fargo’s CFO, Tim Sloan.  Wilson was arrested after going up Sloan’s driveway in her wheelchair to deliver her check that the bank had already refused to accept. A video is available from the website of the San Gabriel Valley Times.

If you have been the victim of forged documents, improperly denied modifications or other forms of predatory foreclosure practices, we’d like to hear your story. Currently we are seeking clients for possible class actions against Bank of America, Bank of New York and Wells Fargo.

The only things big banks fear are disabled homeowners in wheelchairs on national TV and multimillion dollar judgments. We can’t help with the former but we can and do sue America’s lending elite. Presently we have the nation’s largest federal false claims act case in the nation against a lender, HUD’s $2.4 billion suit against Allied Home Mortgage.

If you would like to confidentially discuss your case with us, contact attorney Anthony Dietz at adietz@mahanyertl.com. For immediate assistance, contact attorney Brian Mahany at brian@mahanyertl.com or by telephone at (414) 704-6731 (direct).

Mahany & Ertl is a full service law firm. As a general rule, we do not handle foreclosure defense work. Instead, we sue lenders and servicers in state and federal court for their wrongful and illegal conduct. If you think you have a case that meets our criteria and feel that you have been denied justice, give us a call.

Mahany & Ertl - Giving Homeowners a Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota.  Services available in many states.