Upcoming Classes

Search CFLA's Article Archive:

Racketeering Charge Against BofA and MERS

businessinsider.comMay 10, 2012

By Larry Doyle

A little over a year ago I became aware of robo-signing within the mortgage servicing industry and broached the topic that the activity likely rose to a level of racketeering. I aggressively questioned, Did Wall Street Violate the Racketeering Act?

Believing that the activity did likely rise to a level of racketeering, I recommended that attorneys general should pursue institutions involved in these fraudulent and abusive practices with a RICO action.

Well, it appears that somebody is now doing just that with specific focus on  activities that transpired at Bank of America and MERS (Mortgage Electronic Registration System).

American Banker highlights this specific case and much more in writing, Will R-I-C-O Spell Relief for B Of A Mortgage Borrowers?,

So, how might B of A qualify as a likely target? It’s definitely an “enterprise,” one of the criteria of a RICO prosecution. According to several lawyers, there’s a pattern of activities, mainly surrounding B of A’s 2008 acquisition of Angelo Mozilo’s Frankenstein, a/k/a Countrywide Financial, that provide potential prosecutorial fodder insofar as securities fraud and consumer protection violations are concerned.

One crusader in this tight-knit group – Dave Angle, a consumer attorney formerly with the Missouri Attorney General’s office – points specifically to the Federal Trade Commission’s 2010 settlement with B of A, where the bank agreed to pay $108 million to settle claims that Countrywide had laid excessive servicing fees on cash-strapped homeowners.

The upshot, according to Angle, was, essentially, an upraised B of A middle finger as the company continued servicing practices as usual, until the FTC got wise and forced another settlement in February of this year, charging the bank with ignoring the initial settlement and demanding a return to homeowners of an additional $36 million, the ill-gotten gains accumulated in the interim.

The Inspector General at HUD also noted this blatant nose-thumbing in a report issued in March, which took B of A, along with four of its brethren, to task for “widespread questionable foreclosure practices involving the use of foreclosure ‘mills’ and a practice known as ‘robosigning’ of sworn documents in thousands of foreclosures throughout the United States.”

Every day seems to bring another horror story designed to fuel public rage against Bank of America, whether it’s the case of Louise Davidson of Loma, Colorado (whom I wrote about in previous blogs), still sans home thanks to a B of A/Fannie Mae eviction; Los Angeles mother Dirma Rodriguez, fighting B of A to stay in her home with a severely disabled daughter; or a 74 year-old veteran, Larry Anderson, now on the verge of losing his family home to the relentless maws of the B of A foreclosure machine.

But, Mark Malone – a former U.S. and New Jersey prosecutor with RICO experience – firmly believes that the statute could prove a legal trumpet that could bring down the Jericho-style battlements of B of A.

Factually and legally, he claims, there’s no impediment to using the RICO statute to prosecute current and former executives at Bank of America if a “pattern of racketeering activities” can be alleged, meaning people in the organization having committed two or more acts within a 10-year period that violate federal statutes prohibiting the use of the mail or the “wires” (defined as telephonic, and now Internet, communication) to carry out fraudulent schemes. (Malone, serving as a volunteer lawyer for South Jersey Legal Services, is fighting B of A in a client’s foreclosure case.) He, Angle and others in the group believe that much of what went on during Countrywide’s descent into infamy, and its acquisition by B of A, met the fraud criteria.

Malone and Angle doubt Eric Holder’s Department of Justice will wield RICO as a weapon, pointing out that Holder and the DOJ’s Criminal Division head, Lanny Breuer, are both former partners of the white shoe law firm Covington and Burling. That might pose a problem for the two if a RICO investigation were to move forward with alacrity. As Reuters reported on Jan. 20, the firm’s connective tissue binds it to clients that have included Bank of America, Fannie Mae and Freddie Mac, and its lawyers wrote opinions supporting the legality of MERS’ securitization activities.

So, is the use of RICO by DOJ just wishful thinking on the part of this group of legal crusaders? For now, maybe, but there is some action on the state level. Louisiana, for one, has just filed a RICO complaint against MERS and a whole host of megabanks, B of A included. The suit alleges that the defendants used the wires and the mails in a scheme to defraud parishes out of recording fees.

While the crowd in Washington have shown their crony capitalist fabric all too often, thankfully there are some leaders within our states who have the requisite courage to pursue meaningful justice on this front. No doubt many other states’ attorneys general are watching this Louisiana case very closely. If in fact racketeering occurred, then appropriate measures of justice should be meted out accordingly.

Despite what some in Washington may feel, the country will not only survive BUT this path of truth and justice will make us far stronger.

Back to May 2012 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
BBB Logo


Contact us or view our Sample Documents & Audits by completing the form below.

International Bloomberg Securitization Audits


DVD Sets Only $99


FREE Mortgage Fraud Analysis


Order Cutting-Edge Services Now


Quiet Title Packages from Licensed Attorneys


Affiliate Services


CFLA Sponsored Attorney Links


Take-Home Education Package