Her tenure at the company ended in a lay-off soon after she began issuing warnings to bank executives that the securities being sold to investors were toxic and the bank was engaged in illegal acts.
She later blew the whistle, and as a new article by Matt Taibbi of the Rolling Stone asserts, the Justice Department used the threat of her testimony to elicit a $9 billion civil settlement with the firm last year.
But as our Miami foreclosure lawyers know well, settlements like this did little to actually hold firms accountable, and to hear Fleischmann tell it, they amounted to “the biggest financial cover-up in history.”
In reality, these settlements were reached outside the courts. No judges. No one weighing all relevant evidence. In fact, the pending criminal investigation against the bank dissipated with that $9 billion civil settlement – which was in fact proposed by CEO Jamie Dimon.
One would be hard-pressed to find any other target of a federal criminal investigation who could simply make a phone call to the prosecutor in charge of his case, offer a payment and have the case dismissed. Apparently, Dimon originally offered $3 billion to make the case go away. That amount was later upped to $9 billion, which Holder accepted.
This was despite ample evidence Fleischmann offered to indicate top-level executives not only knew about the mortgage underwriting failures that thrust the nation into a financial crisis and recession – they actively encouraged it and set the policies to keep those toxic mortgages moving. Executives warned diligence managers to stop sending e-mails so that any indications of wrong-doing wouldn’t be in writing.
In one case, she recalls a manicurist applying for a mortgage cited an annual income of $117,000. Fleischmann told her bosses even if this woman worked seven days a week, she’d have to work 488 days a year to make that much, and that was assuming she had no overhead. Supervisors pushed her and others to force these kinds of toxic loans through the pipeline for approval.
The settlement offer was originally $13 billion, but the reality was $4 billion was for so-called “consumer relief” deals, which didn’t actually come out of the bank’s pockets or affect its bottom line.
This of course wasn’t the only such settlement. Others were struck with Citigroup, Bank of America and others. But rather than use the information clearly available to pursue criminal action against bank executives, U.S. Attorney General Eric Holder effectively accepted “cash for secrecy.”
That is, banks neither had to admit or deny wrongdoing. Chase was allowed to sign off on a 10-page “statement of facts” that was short, vague and didn’t spell out any explicit wrongdoing by any named executive.
The company issued a statement days later, incredibly asserting it had broken no laws. Dimon was given a 75 percent raise, up to $20 million annually.
If you’re battling foreclosure in Miami or the surrounding areas contact Bruce Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Debt Warriors with Bruce Jacobs,” discussing foreclosure topics that matter to YOU.
The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare, Nov. 6, 2014, By Matt Taibbi, Rolling Stone
More Blog Entries:
Sen. Elizabeth Warren: Government Protected Wall Street, Not Families, Oct. 27, 2014, Miami Foreclosure Defense Lawyer