NEW YORK — Citigroup has agreed to pay $158.3 million to settle claims that its mortgage unit duped the U.S. government into insuring risky mortgage loans for over six years.
The government said Wednesday that Citi Mortgage certified 30,000 mortgages for insurance provided by the Federal Housing Agency and submitted many certifications that were “knowingly or recklessly false.”
More than a third of those mortgage loans went into default, resulting in millions of dollars in losses for the government because of the insurance claims.
“For far too long, lenders treated (the government) insurance of their mortgages like they were playing with house money,” Manhattan U.S. Attorney Preet Bharara said.
As part of the civil fraud settlement, Citi accepted responsibility for failing to comply with government requirements and submitting certifications that were fraudulent.
Wednesday’s payments are in addition to the $1.8 billion Citigroup has to pay in connection with the $25 billion mortgage loan settlement announced last week by the Justice Department and the nation’s top mortgage lenders.
2 former execs sentenced in health care fraud
CHICAGO — Two former executives of health care company Canopy Financial Inc. who pleaded guilty to defrauding investors out of $75 million have been sentenced to prison.
Former President and CEO Jeremy Blackburn was sentenced Wednesday to 15 years in prison. Former Chief Technology Officer Anthony Banas received a 13-year sentence. Both men pleaded guilty in 2010 to one wire fraud count.
According to court documents, Blackburn and Banas used false information about Canopy’s financial condition to obtain about $75 million from several investors in 2009. They also allegedly pocketed about $18 million from accounts meant to pay people’s medical bills.
The then-Chicago-based company declared bankruptcy in 2009.
The 34-year-old Banas is to report to prison April 18. The 38-year-old Blackburn begins serving his sentence March 20.
SEC accuses investor In Ohio of fraud
WASHINGTON — An Ohio investment manager is in trouble with the Securities and Exchange Commission for the second time in three years.
First, he was accused of defrauding clients and was ordered to give up his ill-gotten gains.
Then, in a case filed Wednesday, he was accused of paying the SEC using $632,000 taken from a client.
That’s not all.
The SEC says Robert Pinkas, 58, of Shaker Heights, Ohio, misappropriated $173,000 of client money to pay his legal expenses from the earlier case. Pinkas also violated an order from the earlier case restricting his work in the investment business, the SEC says.
The SEC filed an administrative action against Pinkas Wednesday accusing him of willfully violating the law.
Pinkas denies that he did anything wrong but is not in a position to address the allegations because he is hospitalized and seriously ill, said his lawyer, Stephen Sozio.
Citimortgage did many certifications that were “knowingly or recklessly false,” resulting in foreclosures. They made a huge profit by doing so, while ruining people’s lives.
How does that sit with conservatives who are always ANTI-regulations? The ones who have been quick to dish out 100% of the blame for foreclosures on the people getting the mortgages?
It doesn’t sit well with anyone. Neither does the fact
that many of the liberal politicians were all in favor
of giving loans to just anyone. It also doesn’t sit well
that Fannie and Freddie have gone untouched in
their complicity in the housing bubble. When in fact
they were big players in the scam. It doesn’t sit well
that Barney, Maxine and Dodd and others all didn’t
even want to address the housing fiasco. That Fannie
and Freddie were just wonderful. Wasn’t it the liberal
outcry (Acorn and others) that banks weren’t giving
loans to those who shouldn’t have even been considered?
Instead of blaming just the banks, how about blaming
not only conservatives but your libber saviors who gladly
promoted and aided the banks.
You appear to be trying to shift this discussion from the need for regulation–and the determination of conservatives to make sure regulation does not occur.
Citigroup is paying another settlement. This $158 million comes on the heels of the December settlement for $285 million to an investor group that they swindled. This brings the total to close to half a billion dollars. Remember, settlement indicates they felt this was a better deal than they might have faced with a jury or judge verdict.
Public sentiments are being roused against welfare fraud. Fraud of all types needs to be prosecuted. The scale of fraud perpetrated by the banks over the last decade absolutely dwarfs the amount welfare fraud costs us. Still, few will have anything to comment on this story line.
The media have been effective at distracting attention from the real criminals that have devastated our economy and diverted the anger towards the poor. They are making it seem as though the 1% of fraudulent activity the poor are responsible has brought about our misfortunes. This is nothing more than an elaborate distraction ploy to aid and abet the continued extraction of wealth from our people by the powerful financial elite.
If this was a welfare fraud story, there would be 300 comments by afternoon. This story will be lucky to get 30. This is why the theft persists. Where is the outrage? In a few weeks, spring will return, as will national protests. This story tells the story of why the Occupiers will be back.
Media distraction is a tool for extraction!