Bank of America accused of loan scam by employee
A series of leaked internal emails purported to be sent between Bank of America staff appearing to show improper lending procedures have been released on the internet.
In the documents released so far, staff at Balboa Insurance, a subsidiary of Bank of America, appear to discuss removing details from loan records to hide improper home foreclosures from the US authorities, something the bank denies. Photo: AFP
By Harry Wilson and Steven Swinford 8:15PM GMT 14 Mar 2011 1 Comment
The emails were published by Anonymous, a hacker group, and are said to come from a former Bank of America employee turned-whistleblower.
In the documents released so far, staff at Balboa Insurance, a subsidiary of Bank of America, appear to discuss removing details from loan records to hide improper home foreclosures from the US authorities, something the bank denies.
The emails, which date from November 2010, show employees discussing removing documents from loan files for a group of about 100 properties. One of the managers raises concerns, saying that to do so will raise a "red flag to auditors".
The Balboa employee in one email appears to be worried after receiving an instruction to remove "DTNs" [document tracking number] from loans made by GMAC, a large US mortgage lender.
"I'm just a little concerned about the impact this has on the department and company. Why are we removing all record of this error?" writes the Balboa employee.
Lloyd's insurers drop on '£22bn bill'
14 Mar 2011
Banks have £1,600bn exposure to EU sick club
14 Mar 2011
British bank accounting standards 'not fit for purpose'
13 Mar 2011
Serious Fraud Office plans new Kaupthing raids
13 Mar 2011
Failed Iceland banks owe councils £750m
13 Mar 2011
Tchenguiz brothers on bail as probe widens
11 Mar 2011
In a separate correspondence, the former employee said the emails demonstrated how the Balboa was hiding information about home repossessions from auditors.
In an email message the former employee said he was "well known throughout Bank of America" and accused the bank of choosing to "destroy my personal career".
"There are a lot of honest and good people working for that company, and their concerns are constantly silenced, because it's cheaper and easier to fire people and sweep their issues under the table than it is to fix the problems. Any BofA employee can tell you they are corrupt, but they won't because they need to pay their bills too."
A Bank of America spokesman said that the documents had been stolen by a former Balboa employee, and were not related to home repossessions.
"We are confident that his extravagant assertions are untrue," the spokesman said.
Bank of America is one of the world's largest banks and during the financial crisis in 2008 bought US investment bank Merrill Lynch on the same day that Lehman Brothers announced it had filed for bankruptcy.
The deal proved controversial as it emerged that Bank of America had allowed Merrill Lynch managers to pay billions of dollars to their staff in bonuses, having earlier said that it had had no knowledge of any deal on pay.
The allegations of foreclosure impropriety could again put the spotlight on the way the bank was run in the years running up to the crisis and how much the bank's managers knew about problems in the real estate market.
|Liveleak on Facebook|