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Posts Tagged ‘Most significant white-collar crime cases’

Alayne Fleischmann costs JPMorgan $US9 billion

Posted by Ram Kumar Shrestha on November 9, 2014

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JP

The key witness in one of the most significant white-collar crime cases in US history has spoken out for the first time.

Alayne Fleischmann, whose testimony was used by US prosecutors to negotiate a $US 9 billion ($10.4 billion) settlement with her former employee JPMorgan, said her attempts to stop the bank’s sale of dodgy loans were repeatedly silenced.

In an interview with Rolling Stone, The Cornell Law grad said she witnessed “massive criminal securities fraud” in the bank’s mortgage sales in the months leading-up to the financial crisis.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'”

Ms Fleischmann, who started working at the bank as a transaction manager in 2006, said when she reviewed random samples of loans, her team found that about 40 per cent were based on overstated incomes.

One mortgage involved a manicurist who claimed to have an annual income of $117,000. Ms Fleischmann calculated that the woman would have need to work 488 days a year to make that income possible.

“And that’s with no overhead,” Ms Fleischmann said. “It wasn’t possible.” Read the rest of this entry »

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