Philadelphia sues Wells Fargo over discriminatory lending

Cites recent Supreme Court decision that gave cities right to sue lenders

Scales of justice with gavel

Earlier this month, the Supreme Court ruled that cities have the right to sue banks over discriminatory mortgage lending practices, but the ruling established a standard that might be tough for the city in question to prove.

Now, one city is going to put that standard to the test.

The city of Philadelphia announced Monday that it is suing Wells Fargo for alleged discriminatory lending practices against minority borrowers.

Philadelphia’s announcement specifically cites the recent Supreme Court decision, which stemmed from a lawsuit brought by city of Miami against Bank of AmericaCitigroup, and Wells Fargo in 2013.

In its lawsuit, Miami claimed that the banks engaged in predatory lending to minority borrowers in the city, and accused the lenders of “reverse redlining,” which led to a large number of foreclosures, lower property tax collections, and increased cost to the city to deal with the resulting property value loss and blight.

The Supreme Court ruling granted cities the right to sue banks under the Fair Housing Act, but established that the city must prove direct harm to itself caused by the lender’s actions.

Philadelphia is taking that challenge head-on.

According to the city’s announcement, its complaint alleges that beginning in 2004 through today, Wells Fargo violated the FHA by “steering African-American and Latino borrowers towards high-cost or high-risk loans even where those borrowers’ credit permitted them to obtain more advantageous loans.”

Philadelphia’s complaint also alleges that Wells Fargo was “aware and, in fact, incentivized the marketing of the high-cost or high-risk loans to minorities.”

According to the city, the incentivized loans included “lender credit” loans, in which Wells Fargo pays the borrower’s closing costs in exchange for receiving a loan with a higher interest rate.

Then, the borrower has to pay the higher interest rate well after the “lender credits” are repaid, which generates additional revenue for the bank with no additional benefits for the borrower, the city claims.

According to the city, its lawsuit is based on a review of Wells Fargo’s lending practices, the city’s applicable legal authority, and an analysis of available loan data by the city legal counsel.

The city claims that that analysis found that 23.3% of loans Wells Fargo made to minority customers in Philadelphia were “high-cost or high-risk,” while only 7.6% of loans made to white customers were “high-cost or high-risk.”

Additionally, the city’s lawsuit claims that Wells Fargo’s lending practices have a “disparate impact” on minority borrowers in Philadelphia, including (claims direct from the city’s announcement):

  • A loan in a predominantly minority neighborhood is 4.7 times more likely to result in foreclosure than is a loan in a predominantly white neighborhood
  • African-American Wells Fargo borrowers were 2.1 times more likely to receive a high-cost or high-risk loan than a white borrower
  • Latino borrowers were 1.6 times more likely to receive a high-cost or high-risk loan than a white borrower
  • The disparity remained even among borrowers with FICO credit scores above 660 as African-Americans with FICO scores greater than 660 were 2.5 times more likely to receive a high-cost or high-risk loan than a white borrower and Latino borrowers with FICO scores greater than 660 were 2.1 times more likely to receive a high-cost or high-risk loan than a white borrower

“The practices of Wells Fargo disproportionately affected minority borrowers here in Philadelphia, and because many of these loans resulted in foreclosures, all neighborhoods throughout the city suffered the harm,” Philadelphia Mayor Jim Kenney said.

“I am proud that the city is committed to fighting against practices that unfairly impact its minority population and have drained resources from all Philadelphia neighborhoods,” Kenney continued. “And I particularly thank members of City Council who have long battled predatory lending in their districts and across the entire city.”

Wells Fargo, for its part, denies the city’s allegations and says it intends to fight the charges.

“The city’s unsubstantiated accusations against Wells Fargo do not reflect how we operate in Philadelphia and all of the communities we serve,” a Wells Fargo spokesperson said in a statement to HousingWire.

“The U.S. Supreme Court’s recent ruling in the city of Miami case means that, for Fair Housing Act claims, financial institutions cannot be held responsible for harm they didn’t cause,” the spokesperson continued.

“These types of cases have been pending in other states and have been rejected by all courts who have addressed the merits of the claims,” the spokesperson added.

“Wells Fargo has been a part of the Philadelphia community for more than 140 years and we will vigorously defend our record as a fair and responsible lender,” the spokesperson concluded. “We will continue to focus on helping customers in Philadelphia and its surrounding communities succeed financially, and on expanding homeownership in Pennsylvania and across the United States.”

The city said that its complaint is seeking “equitable relief,” which could include an injunction requiring Wells Fargo to stop engaging in discriminatory lending practices.

The city is also seeking monetary damages based on the city’s loss of property tax revenue resulting from unpaid taxes on abandoned properties, along with the reduction in tax collections due to the decrease in value of foreclosed properties and properties in proximity to foreclosures.

Philadelphia will also seek compensation for non-economic injuries associated with foreclosures, such as interference with the city’s ability to achieve its goals for non-discriminatory housing practices, the city said.

“The city of Philadelphia’s investigation revealed that both the resources of the city and the lives of Philadelphia’s citizens have been negatively affected by Wells Fargo’s discriminatory lending practices,” said Philadelphia City Solicitor Sozi Pedro Tulante. “The Law Department must take action in light of this evidence and halt these discriminatory practices on behalf of the citizens of Philadelphia.”

Miami Sues JPMorgan Over Discriminatory Lending Practices

As further corroboration of the articles on this site and an infinite number of mainstream and not-so-mainstream sites, the banks sold mortgage bonds to investors under the presumption that the risk of loss was nearly zero. If done properly, securitization works. It gives a greater opportunity to more people to get home loan and other kinds of credit financing. And we now know that the primary target of many campaigns was to get new “customers” to take a loan (even if the bank wouldn’t give them a bank account) and in a huge number of cases consisted of those people who were faced with language, education and cultural challenges. Any fool would know that if you are going to do business who are restricted by such challenges, things are not likely to turn out as planned. The City of Miami thinks there is something wrong with that plan. So do I.

It is easy to see why scam artists would target such people. They are easy to convince because the con man convinces them he or she is trustworthy. The “customer” comes to rely on the seller for information about whatever it is he or she is selling. In conventional terms it might be selling insurance on a weekly payment basis or selling an annuity for a large down payment made from the proceeds of life insurance. The insurance turns out not to be real or, in less pernicious cases, the insurance doesn’t cover nearly what was promised by the seller. In any event the Seller makes money because the customer gives money to him or her. The money goes into his or her pocket and they are able to live off their ill-gotten gains.

All this gets a whole lot less obvious when the “seller” is trying to “give” money to the customer and have the customer sign loan papers. Why would anyone give up the money knowing that the loan has a larger risk of failing because the customer is challenged in some ways that make it less likely they will have employment, less likely they will have savings and less likely that they will be able to pay the interest, much less the principal amount “loaned?” It sounds like a fool’s errand — lending money to people who are not likely to pay the money back. And yet, the banks did exactly that and employed tens of thousands (10,000 convicted felons in Florida alone) to sell such loans.

The key question is not whether the banks did it to make money. The answer is obvious. Of course they were making money — but how when they were getting agreements to pay the loan from people who would never pay it back — often because after the teaser period was over it was obvious on its face that nobody in their financial circumstance could pay more than their entire household income? The only rational answer is that the banks had no risk and that they made all their money on the front end AND when the loan failed by betting against the loans they were selling to unsuspecting investors. And the only way they could pull off that maneuver is to intervene in the lending process such that the investor and borrower never meet up. And the only way they could avoid disgorgement of their illegally obtained profits from “proprietary trading” and “fees” is to foreclose on as many mortgages as possible.

So when you take the entire program on its face, you can see that foreclosure was an integral part of their profit model because it cuts off the rights of borrowers, investors, insurers etc. from demanding disgorgement of illegally obtained compensation that was never disclosed at closing — an absolute requirement under the Truth in Lending Act. And they knew the day would come when everything would collapse and the proof of that is that they were betting on exactly that to happen.

And they knew that they would be destroying documents, “losing” documents etc such that they would be fabricating those documents with such advanced technology that the borrower never realized that he was being shown a document he had never seen before, much less signed. And finally, they knew they would be fined and censured. No matter — they simply used investor money again to pay fines and damages that were caused by the banks put are being paid by still unsuspecting investors. (except for people like Vincent Fiorillo bond manager at DoubleLine who has had enough of this game).

The Miami suit needs to result in discovery that digs deep into the books of JPMorgan to see just how much money was made on each of those bad loans (bad for both the investors and the borrowers) to see just how much money they made, how they made it and how much they made. The results will astonish most casual observers. The bottom line is that the banks made profits that were higher than anytime in history but they weren’t really “profits.” They were proceeds of theft.

It should all be disgorged and the communities that were decimated by the Bank should be restored. That is the RIGHT thing, especially when you learn that many of the “loans” were the result of hard sell, midnight visits signing piles of documents the customer had no way of understanding and no opportunity to read even if they could understand them. Add to that the refi’s were really homes that were paid off or  nearly paid off. If they had just been left alone, the same people would have actual positive net worth and would never have faced foreclosure.

JPMorgan sued by Miami over mortgage discrimination

  • At issue are alleged predatory lending practices in minority neighborhoods since at least 2004 which Miami blames for causing waves of foreclosures in the housing bust. After issuing high-cost loans to minorities, JPMorgan (JPM -0.3%), says the city, refused to refinance on the same eased terms extended to others.
  • The lawsuit follows a similar one launched a few weeks ago by Los Angeles.  Wells Fargo, Citi, and BofA face similar charges.
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Florida Wrongful Foreclosure Victims Get $2k, Banks get $2,000k

If you are looking for legal representation in S Florida, please call 520-405-1688 where Neil has established an office again after 30 years of practicing trial law in S. Florida.

Editor’s Note: For those who have given, up, moved on and don’t want to fight about it, the $2,000 check they are about to receive is like found money. But it is a surrender to greed, bullying and criminal behavior. The banks are giving the paltry sum of $2,000 in exchange for an average loan of $200,000 which they neither funded nor purchased, but which they sold multiple times, 1000 cents on the dollar.

As I understand it, you can take the $2,000 and also sue for wrongful foreclosure, but you can be sure that despite that, most people will not sue and those who do are going to be met with the argument that we already settled that.

For those interested in getting their check, read the article below or go to the Sun Sentinel or You’ll get the information you need.

From WPTV.Com by Donna Gehrke-White, Sun Sentinel

Some 167,398 Floridians who lost homes to foreclosure may each get about $2,000 as part of the nation’s largest consumer financial protection settlement.

The checks will be sent out in early 2013, with more than a third going to people who lost homes in Broward, Palm Beach and Miami-Dade counties, estimated Jack McCabe, a housing analyst based in Deerfield Beach.

People need to send in forms to receive the money by Jan. 18. How much people will receive depends on how many borrowers participate.

Already, Minneapolis-based Rust Consulting has “sent out notification postcards to eligible borrowers nationwide,” said John Lucas, a spokesman for the Florida Attorney General’s Office that is helping administer the historic federal, 49-state settlement.

“A low percentage of those postcards were returned, and Rust is conducting further research to locate those borrowers,” Lucas added in an e-mail. People can call toll-free 866-430-8358 to see if they qualify to be part of the settlement.

A former Pompano Beach homeowner who would only give his first name, Mike, said he called and found that he was on the list to get a check. He said he hired too late an attorney to fight his foreclosure. “I was in denial,” he said. “Divorce, job and house — I lost all three.”

In all, about $1.5 billion will be given nationwide to people who lost homes to foreclosure, with Floridians getting about $334 million.

The agreement covers borrowers who lost their homes to foreclosure from 2008 to 2011 and whose mortgage were serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo.

The five lenders agreed to a massive $25 billion national settlement earlier this year. By August more than 23,000 struggling Floridians had received $1.7 billion in mortgage relief, including principal forgiveness, loan modifications and the suspension of mortgage payments until a later date, according to an interim report by the independent National Mortgage Settlement Administrator. Floridians will ultimately receive about $8 billion in relief.

Part of that includes money to owners who already have lost homes to foreclosure, including those Floridians served fraudulent “robo-signing” foreclosure notices by the five lenders. State and federal investigations found that the banks had routinely signed foreclosure-related documents outside the presence of a notary public and without really knowing whether the facts they contained were correct.

Roy Oppenheim, a foreclosure defense lawyer in Weston, said the projected $2,000 settlement to each foreclosed homeowner doesn’t go far enough in helping those South Floridians who were tossed out of their homes with such fraudulent paperwork.

“They should have been given more money,” Oppenheim said. “Those were criminal acts.”

But the settlement makes no distinction and gives the same amount, regardless of the circumstances of how people were foreclosed on, Oppenheim said.

Other foreclosure victims have been given much more money, he added. Another unrelated foreclosure settlement, for example, gave $25,000 to each soldier who was foreclosed on while fighting overseas, Oppenheim said.

Real estate analyst Jack McCabe agreed that the estimated $2,000 settlement doesn’t fully resolve the pain of foreclosure. “It’s like pocket change,” he said. Some homeowners, for example, lost tens of thousands of dollars in home equity when they were foreclosed on, McCabe said.

Still, it’s some cash: Most Floridians who lost homes to foreclosure won’t get anything, McCabe added. About 400,000 Floridians were foreclosed on between 2008 and 2011 but the settlement affects only 167,398 of them, he said. About 233,000 others had lenders who aren’t part of the agreement.

In addition, there are now about 339,000 more Floridians fighting foreclosure in court. More than a third — or 38 percent— live in Broward, Palm Beach or Miami-Dade counties, McCabe estimated.

In addition another 530,000 Floridians are more than 90 days late in paying their mortgage and face losing their home, he said.

“We’ve still got a full ways to go before we resolve this foreclosure crisis — another two to three years,” McCabe said.


If you believe that you are eligible for relief and have not received a Claim Form, please contact the National Mortgage Settlement Administrator at 1-866-430-8358, Monday through Friday 7 a.m. – 7 p.m. Central Time

South Florida Foreclosures Rising Sharply

For Legal Representation in South Florida call 520-405-1688. Neil Garfield has established an office there again, where he practiced for 30 years.

Editor’s Notes: With the increase of over 37% over last year, S. Florida is becoming a hotbed of foreclosure activity just as some “old” foreclosure areas are rising and a lot of new areas are suddenly experiencing a vast increase in foreclosure activity.

The Banks are on the move again and all I see, with a few exceptions, is lawyers and pro se litigants admitting practically everything, not knowing when to object or take control of the narrative, and then asking for relief. If you do that, you are not giving the Judge any choice.

Once you have admitted all the essential elements of the foreclosure, the forecloser has “proven” its case in satisfying the doctrine of a prima facie case. Even if you only admit most of what is alleged the rest will likely be presumed. And then, your affirmative defenses and counterclaim sound like hollow protests against the bad guys or pleas for mercy.

The judicial system exists in order to bring finality to any controversy that is properly brought within its jurisdiction. Judges are not there to give you mercy or to fashion their own ideas of justice. And the system is not  corrupt just because you lost.

Even in the appellate decisions the courts are telling us over and over again that the “facts” of the case clearly show the loan, obligation, note and mortgage were all valid. The loan receivable account is presumed to exist, and the obligation of the  borrower to repay the loan is not subject to any effective defense even if you find some evidence of fabrication or even forgery. (More on forgery and fabrication later this week).

This is why I have coined the defense tactic “Deny and Discover.” The tactic is nothing more than a restatement of common litigation where the party sued denies anything that is either not known by them or is arguably deniable, which simply means that the allegations must be PROVEN not accepted as the truth.

The wording varies but you will notice in many cases that the pleading states that the borrower entered into a deal with the mortgage originator in which a mortgage was executed. Denied. You don’t know that the originator was actually the source of the loan funding so why would you admit that? In fact, you will also find that through discovery and information obtained from Title and Securitization Analysis and Commentary that the funding came from an undisclosed third party.

So if you look at yesterday’s post on interrogatories you can see what you you should be looking for. The point is that I have decided to get personally involved in cases in South Florida (especially since I am moving back to Florida soon).

If you represent a client, be careful what you admit and don’t refer to the note as evidence of the loan because in most cases it probably is not evidence at all but rather an executory contract in which the loan was NOT funded by the originator (the payee on the note and mortgage).

You should be directing the attention of the court to the obligation, not the note. You will remember, lawyers, from first year law school, that the note is not the the obligation. It is supposed to be evidence of the obligation. And the mortgage is the tail of the dragon that can only be a perfected lien capable of foreclosure if it refers to a valid note.

If the note contains the wrong payee because that payee funded nothing and if the note differs from the repayment terms presented to the lenders (i.e., the mortgage bond issued by an unfunded and therefore non-existent REMIC) then the note is invalid both because it names the wrong party and because the terms are different than the real lender was offering.

You end up with an obligation for which there is no documentation other than the closing instructions and wire transfer receipt from a third party that shows that the transaction is not FBO (for benefit of the originator) but rather creating a common law obligation of repayment, the terms of which are yet to be determined.

There is nothing under Florida law or the law in any state that allows for imposition of an equitable mortgage with terms that are determined by the Court. Thus the obligation, while owed is not subject to a mortgage and thus not capable of being foreclosed.

If the Banks were playing this straight up, they would have funded the REMIC and put the name of the REMIC on the mortgage or the actual funding source (investment bank) on the note and mortgage, but that would have subjected them to lender liability under various laws (TILA, RESPA, Deceptive Lending) and other misbehavior.

Instead they put the name of a nominee on the note and mortgage (deed of trust) so that they could control the APPARENT movement of the loan through a false chain of securitization starting with an originator who never funded or purchased the loan in a transaction in which money exchanged hands.

This is what enabled the banks to divert money from the investor lenders and money and property from the homeowner borrowers into a wheel and spoke system of multiple sales of the loan for 100 cents on the dollar even if it was known with 100% certainty that the loan would be in default. It was all possible because the actual funding source was left off the documents.

The borrower didn’t mess this up and no incentive to do so. The borrower was required to have disclosure and choices under TILA and state laws, but didn’t get it because of the sneaky game in which they “borrowed” the loan to trade on it, get insurance, credit default swaps and bailouts for loans that the banks never funded not purchased with money.

Thus the loan closings were intentionally “botched” and designed to mislead both the borrower and the lender which was done quite successfully. Recognition of this simple fact, would stop foreclosures and restore the wealth of the middle class partially because the investor lenders would easily be able to recover their full investment from the banks that sold them.

Those investors, lest we forget are not fat cats. They are managed pension and retirement funds, for the most part, that will be begging for federal bailouts next year because of losses caused solely by the misbehavior of the banks and had nothing to do with the borrower. Those retirement accounts and pension funds are the lifeblood of the middle class.

MIAMI—South Florida recorded more than 13,200 foreclosure actions in the third quarter, a 36% year-over-year rise. Lenders also filed 35,700 notices of default so far this year in Miami-Dade, Broward, and Palm Beach counties, according to new report from

Still, that’s a far cry from previous years. In 2009, there were 75,500 foreclosure actions in the same period and in 2010 there were 49,000 through the first three quarters, according to the report based on filings with the Clerks of the Court for each county.

Peter Zalewski, a principal with Condo Vultures, points to administrative irregularities that he calls “robo-singers” in the repossession process that caused a hiccup in the process. He tells robo-singers first surfaced late September 2010, creating a foreclosure freeze.

That slowdown continued through 2011. The nation’s five largest mortgage servicers reached the National Mortgage Settlement Agreement with the federal government and the attorneys general from 49 states to provide at least $25 billion in relief to borrowers in February 2012.

“We are tracking roughly 330,000 foreclosure filings and we’ve seen about 182,000 bank repossessions or forced sales of the properties,” Zalewski says. “Those numbers may be inflated by condo foreclosures, which usually result in multiple filings. So it appears that the worst part of the foreclosure mess is over.”

Zalewski says investment groups set up to buy the bank-owned property are waiting in the wings. As soon as the banks process the repossessions, he says, chances are the product is going move relatively quickly.

“If I were going to guestimate I’d say we are in the seventh inning of a nine inning ballgame,” Zalewski says. “We anticipate there will continue to be foreclosure filings in the upcoming quarters, then you will start to see a slow down. All indications are pointing toward 2014 getting into a growth phase.”


TD Bank Slammed with $67 Million in Aiding Ponzi Scheme


COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

Dear Lawyers Who Would Like to Make a Ton of Money:

Here is a case where the guilt and liability of the Bank (read that as Deep Pocket) was predicated upon circumstantial and direct evidence — the kind of thing that you are currently ignoring in the foreclosure fraud marketplace. This case is a reminder to you that juries will come back with huge verdicts if they are presented with the right evidence and if you don’t concede your case before you begin.

The Rothstein scheme was no better and no worse than the Wall Street securitization scheme. But he only stole $1 billion whereas Wall Street titans stole trillions of dollars plus millions of homes, so far. The only thing different was the numbers.

The specific accusation here is that TD Bank employees knew of the fraud and assisted in assuring investors their money was sound. In the Fake Securitization of home mortgages scheme, the banks and non-bank entities, as well as title companies, title agents, real estate agents, appraisers, closing agents, and pretender lenders knew of the fraud and assisted in assuring people who were buying homes and assisted in assuring people who were buying mortgage bonds that they were buying a safe “investment.”

Everybody except the borrower and the investor knew the deal was cooked, that the appraisal wasn’t real, that the ratings weren’t real and that the pool couldn’t work because the investment bank had already withdrawn more money than could ever be covered, and that the house could never sustain the value used to close the deal.

Everyone knew that the money being used to pay the investors was coming from the flow of new investments and their own money — that is everyone except the person who bought bogus mortgage bonds and the person who bought a bogus loan product.

Like the fraudulent foreclosure marketplace, the Rothstein business model used people who pretended to be bank employees — in the Bank. Sounds like robo-signing and surrogate signing, doesn’t it? And the party named in the loan origination documents as the lender was pretending to be a lender when in fact the real lender was hiding behind four layers of curtains.

Accordingly, both borrowers and investors were deceived into believing and relying upon the assurances that all industry standards of due diligence, review and confirmation were being performed when in fact they were intentionally ignored for the simple reason that the schemers needed the loans to fail and the mortgage bonds to default in order to make even more money from side-bets on the guaranteed to fail deals.

The truth was that everyone in the false securitization chain was being paid to act as though the loans were securitized in communication with the investor and were paid to act as though the loans were not securitized in communications with the borrowers.

The loans were treated as though they were securitized when it suited the investment banks who created the bogus mortgage bonds and then treated as though they were not securitized when it suited them — fabricating, forging and simulating transactions in which the loan was “Sold” without any money exchanging hands, but profits were taken out of the money due investors.

Based on those “sales” they then posed as creditor lenders in foreclosures and who submitted credit bids at the auction which was conducted by their own affiliates if it was a non-judicial state or by clerks of the court in judicial states.

Rothstein is serving a 50+ year sentence. What do you need, Mister or Madame lawyer, to get off your chair and look into this. Using standard contingency fees and applying them against the $6+ trillion stolen already, there is at least $2.4 trillion in fees waiting for you to pluck off the tree on the low hanging branches. What are you waiting for?

MIAMI –  A federal jury decided Wednesday that Toronto-based TD Bank owes an investment group $67 million for its role in a $1.2 billion Ponzi scheme that was operated by a now disbarred attorney, Scott Rothstein.

The verdict came in a lawsuit filed by Coquina Investments, based in Corpus Christi, Texas. It was the first to go to trial of several pending lawsuits filed by wronged investors against the bank and others. Coquina attorney David S. Mandel said the jury “sent exactly the right message to TD Bank.”

Once a prominent South Florida attorney, Rothstein is serving a 50-year prison sentence after pleading guilty to running a massive scam involving investments in phony legal settlements that imploded in 2009. The 49-year-old lawyer has been cooperating extensively with federal prosecutors, and more people are expected to face criminal charges; seven besides Rothstein have already been charged.

The scheme was one of the largest frauds in South Florida history and triggered the failure of the once high-flying Fort Lauderdale law firm Rothstein Rosenfeldt Adler. Rothstein has boasted about paying bribes to unnamed politicians, judges and law enforcement officials, and he raised thousands of dollars for the campaigns of many state and national politicians.

Testimony and court documents show that Rothstein used an account at a TD Bank branch as an integral part of the scheme. Conspirators in his scheme allegedly posed as TD Bank employees, and one of Rothstein’s associates devised a fake TD Bank website on which fake account balances were posted for investors.

“This bank was integral to the fraud, and the fact is that it could not have succeeded without their active participation in the Ponzi scheme,” Mandel said. “TD Bank was Rothstein’s partner in crime.”
Spokeswoman Rebecca Acevedo said TD Bank would explore its legal options and insisted the massive fraud should be blamed squarely on Rothstein.

“We will continue to defend the bank against claims of wrongdoing,” Acevedo said.

TD Bank, a subsidiary of Toronto-Dominion Bank of Canada, operates 1,280 branches in 15 states and Washington, D.C., according to the bank’s website. It had $160 billion in total deposits and $202 billion in assets as of Oct. 31.

Mandel said key TD Bank employees knew of the fraud and assisted Rothstein in assuring investors their money was sound. In a lengthy sworn deposition in December, Rothstein claimed he gave former TD Bank vice president Frank Spinosa more than $50,000 to ignore obvious signs of illegal activity.

Called to testify in the Coquina trial, Spinosa invoked his Fifth Amendment right against self-incrimination. His attorney has repeatedly denied Rothstein’s accusations, contending that Rothstein is falsely implicating other people in hopes of winning a sentence reduction recommendation from federal prosecutors.

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