U.S. plans new bank fraud cases in early 2014-attorney general
Matt Rourke/APU.S. Attorney General Eric Holder
By David Ingram
and Aruna Viswanatha


WASHINGTON -- The U.S. Justice Department plans to bring mortgage fraud cases against several financial institutions early in 2014, using as a template the case that ended last month in JPMorgan Chase's $13 billion settlement, U.S. Attorney General Eric Holder said Wednesday.

In an interview with Reuters, Holder wouldn't say which companies or how many could face lawsuits but said the Justice Department was in contact with them and it was hard to say whether the talks would lead to settlements.

"We have a number of investigations that are coming to a head at the same time," he said. "It is my hope that the next round of these cases will be filed soon after the new year."

JPMorgan (JPM), the largest U.S. bank, agreed last month to pay $13 billion to end a series of government investigations into its marketing and sale of mortgage-backed securities.

That settlement included a $2 billion penalty to resolve civil fraud claims from the Justice Department and an acknowledgement from JPMorgan of problems in the securities it sold in the run-up to the financial crisis.

It also included $4 billion in help to consumers and didn't cover an open criminal investigation into the conduct.

Holder said the government would seek similar elements in any future resolutions.

"Those four things I think comprise what we think of as a template for the resolution of these other matters as they're brought," he said.

Taks Force

The cases stem from a government task force the Obama administration created in early 2012 to probe the packaging and sale of shoddy home loans. At the time, the department sent subpoenas to more than a dozen financial institutions and warned of action.

Other institutions including Bank of America (BAC),
Citigroup (C) and Goldman Sachs Group (GS) have disclosed related investigations and could face future lawsuits.

Bank of America is already contesting a lawsuit the Justice Department filed earlier this year over its mortgage securities, but expects more cases.

In October it disclosed that staff at a U.S. Attorney's office intended to recommend a civil suit against Bank of America affiliates over mortgage securities. The bank also said staff at the New York Attorney General's office, which is part of the task force, planned to recommend action against Merrill Lynch, which the bank acquired in 2008.

Citigroup in November said it continues to respond to subpoenas and other requests for information about its mortgage securities from authorities including the Justice Department's civil division.

Goldman Sachs in its latest quarterly report said future claims from the task force could result in a "significant increase" in the company's liabilities. It said it continues to receive requests for information from members of the group.

Another bank, Credit Suisse (CS), faced one of the first lawsuits stemming from the task force, filed by New York Attorney General Eric Schneiderman last November.

Representatives of Bank of America, Citigroup, Goldman and Credit Suisse either declined comment or didn't immediately respond to requests for comment.

Holder said he was meeting with the head of the task force and its leaders on a weekly basis, including on Tuesday this week.

-Additional reporting by Karen Freifeld.


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RouteUS66Busload

Sweep them clean, I don't like to enter a bank cuz of some possiblity of "bad apple" bank workers that are too egar to get your signature after some "account screw ups" that they call "just error" but it's really a felony theft if customers don't notice it in their statement? Mortage is a lot worse that I would avoid the most.

December 06 2013 at 1:55 AM Report abuse rate up rate down Reply
demannmarine

The Banks screwed the home owners, the home owners lost their houses and THE GOVERMENT GETS THE MONEY???

December 05 2013 at 1:00 PM Report abuse +1 rate up rate down Reply
Katherine

Yeah right. There's not a member of Congress, Dept. of Justice, or President who has truly sought justice on behalf of the American population versus lining their own pockets at the expense of public (who were lied to about the securitiztion process) and pension and retirement investors who of course own nothing for their hard earned dollars. The investment banks and servicing banks will clean up until someone puts a stop to it, and that's not Congress, Dept. of Justice, President or the judiciary. It's not in their best interest to not keep lining their pockets.

December 05 2013 at 12:50 PM Report abuse +2 rate up rate down Reply
pattynken1

And what about Romney's "corporations are people?" When will the decision makers be held personally responsible, and made to be punished as we'll as giving back the millions they took in personally off these scams. Not a dime of that is being returned, is it.

December 05 2013 at 11:20 AM Report abuse rate up rate down Reply
gjohn411

There fines are small compared to the money the banks made during the Bush administration and the tax payer bailout he provided.

December 05 2013 at 10:22 AM Report abuse +2 rate up rate down Reply
1 reply to gjohn411's comment
KSMITHSPECTRUM

There making twice as much under Obama, Look at their balance sheets. Lets see borrowing money at 1\'4 percent and loaning it at 6-21 percent. Can you say ripoff. Thanks Barrack for your lack of oversight!

December 05 2013 at 11:49 AM Report abuse +2 rate up rate down Reply
fishlover

CEO made the most out this fraud . They make there money.

December 05 2013 at 10:04 AM Report abuse +1 rate up rate down Reply
k4jlp

I'm sure the bank ceo's are just quivering in their shoes with worry....

December 05 2013 at 7:16 AM Report abuse +4 rate up rate down Reply
Holli, Chaney

Holder goes after anyone he thinks he can get money out of. And if you\'re Jewish its just candy on the apple.for them.

December 05 2013 at 6:39 AM Report abuse -1 rate up rate down Reply
Holli, Chaney

Sounds more like \"hey..we got 2 billion out of these guys..who else can we get money out of\"

December 05 2013 at 6:37 AM Report abuse +3 rate up rate down Reply
johnny18350

I hope wells fargo is high on that list. my moms house is with them and she died almost 4 years ago and i inherited it. the title was changed to my name within 5 months in court but wells fargo keeps telling me they wont convert the loan cause govt documents are not good enough for them. I've had enough of their bs and poor customer service. I'd love nothing more than to see them put out of business for good.

December 05 2013 at 3:35 AM Report abuse +3 rate up rate down Reply
1 reply to johnny18350's comment
Larry D. Joshway

Wells Fargo is correct. The inherited asset (Real Estate) and title being transfered to you does not change the mortgage and note agreement your mom signed. Your deed after recording, only gives notice to all that you have interest by title in the property. You should go to another Lender and refinance the existing mortgage and get a lower interest rate.

December 05 2013 at 10:11 AM Report abuse +1 rate up rate down Reply