by Brian Mahany
America’s “Too Big To Fail, Too Big To Jail” banks have always been favorite targets of ours. Not a day goes by without one of the big banks being in some sort of legal trouble or regulatory hot water. We have heard countless stories of how these lenders have abused their business customers and the stories regarding home mortgage abuses probably number in the tens of thousands. Our standards are pretty low when it comes to banks such as Bank of America and JP Morgan Chase but last week’s report that JP Morgan Chase may have assisted Ponzi scheme giant Bernie Madoff represents a new low.
Actually, no one is completely sure of Chase’s role in the Madoff fiasco. That is because the bank has refused to cooperate in a federal investigation. Last month Treasury Inspector General Eric Thorson ordered the bank to turn over documents related to the bank’s dealings with Madoff to the Comptroller of the Currency. Chase has until later this week to turn over the records or face severe sanctions.
The bank claims that the records are protected by attorney – client privilege. The government says that banks can’t hide wrongdoing behind such privilege.
Separate from the Treasury probe, Madoff trustee Irving Picard sued JPMorgan Chase 2 years ago accusing the bank of aiding and abetting Madoff. Picard lost initially but the dismissal of that lawsuit remains under appeal. Picard’s lawsuit noted that Chase “helped perpetuate Madoff’s fraud by ignoring the red flags, and continuing to structure products and collect fees for their own enrichment.”
There is almost always a large difference between the relative bargaining power of banks and their customers. For that reason, the law requires banks to operate in good faith. In many instances, banks possess a fiduciary duty to their customers. As long as everyone plays by the rules there are usually no problems. Serious problems can develop, however, when banks suddenly try to change the rules on existing customers or operate solely for their own benefit without regard for their customers.
As lawyers that specialize in lender liability and bank fraud, we help businesses and homeowners keep the playing field level. If you believe a bank or mortgage company improperly called a loan, changed the terms of a loan or suddenly required additional guaranties or collateral without any legal basis, give us a call. From the largest false claims act case in the country against a lender – HUD’s $2.4 billion case against Allied Home Mortgage - to cases filed on behalf of individual homeowners, we can help.
For more information, contact attorney Brian Mahany at brian@mahanyertl.com or by telephone at (414) 704-6731 (direct). All inquiries are protected by the attorney – client privilege and kept in strict confidence.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and coming soon, San Francisco, California. Services available in many jurisdictions.
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