Washington DC, June 11 - complaint was simultaneously filed with Office of the Comptroller of the Currency (OCC), the Securities and Exchange Commission (SEC) and respective Committees of the US Congress by Dr Joseph Zernik, a fraud victim and shareholder of Bank of America Corporation. The case, subject of the complaint, originally involved merely real estate fraud, as opined by the highest reputation fraud experts. The initial fraud was small-scale fraud - at less than $2.0 millions. However, by 2010 – it involves the highest levels of management in Bank of America, US banking regulators, law enforcement, and inquiries by US Congress on such agencies. Moreover, evidence inherent in the case demonstrated the large-scale fraud on the US taxpayer in disintegration of underwriting, “sound banking principles”, and both internal and external audit at Countrywide and Bank of America. It provides unique insights into US financial infrastructure, banking regulation.
The fraud was initiated in 2004 by low-level Countrywide personnel: Convicted felon – Jae Arre LLOYD (formerly Timothy Lloyd Morrow) – doubling as Countrywide “Loan Originator”, and Maria MCLAURIN – San Rafael Branch Manager. By December 2006 Dr Joseph Zernik uncovered the fraud, and with it – documented the large-scale funding of government-backed Uniform Residential Loan Applications (1003s) in Countrywide with no underwriting at all. In January 2007, the first complaint was filed with FBI alleging large-scale fraud on the US government and shareholders by Countrywide, and projecting losses in the hundreds of billions of dollars. Such predictions came true a year later – with Countrywide’s collapsed. By June 2007 direct involvement of Angelo MOZILO– then CEO, and Sandor SAMUELS – then Chief Legal Officer was documented. In response – Countrywide initiated in July 2007 a campaign of alleged harassment, intimidation, retaliation, and extortion through employment of a large law firm, which to this date falsely appears in court, under the false designation of “Non Party”. From July 2008 to December 2008, Timothy MAYOPOULOS - then General Counsel halted such conduct after the takeover of Countrywide by Bank of America. However, Brian MOYNIHAN – today Bank of America President – resumed it immediately upon ouster of Mr MAYOPOULOS in December 2008. Direct involvement of Brian MOYNIHAN was further documented starting December 20, 2009. Moreover, starting January 2010, as President, Brian MOYNIHAN signed periodic SEC reports certifying no fraud in Bank of America operations, as well as disclosures pursuant to Basel II banking accords, Pillar III.
The pattern of conduct of Bank of America Corporation and Brian Moynihan documented in the complaint, as a whole is alleged as fraud, deceptive business practices, and extortion. Additionally, violations are alleged of Sarbanes Oxley Act (2002) relative to reporting requirements by corporate counsel, certifications by corporate officers, and review of complaints by the Audit Committee. Additional allegations include fraud on shareholders, on banking regulators, on US taxpayers, and on the international banking community. Furthermore, the published Bank of America Code of Ethics and Outside Counsel Procedures are alleged as fraudulent representations. Most alarming – regardless of provisions enacted in the Sarbanes Oxley Act (2002), the pattern of conduct of most senior corporate officers and their relationship with both inside and outside corporate counsel is alleged as the core of the violations, and therefore, reflects on various other past and ongoing actions against Bank of America. The case as a whole provides unique insights into US financial infrastructure, banking regulation, and law enforcement, and with it – prevailing risk levels during the current protracted banking crisis.
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