Information from the latest article in the Wall Street Journal (What J.P. Morgan Knew about Madoff Fraud, 2/17/11) doesn’t look good for JPMorgan Chase.
The article points to an internal formal report on Madoff that raised suspicions and quotes Bernard Madoff implicating the banks complicity in the fraud:
The question over what the banks knew was rekindled Wednesday when Mr. Madoff, in an interview with the New York Times, asserted that banks and hedge funds, which he declined to name, “were complicit” in his fraud.
“They had to know,” he said.
JPMorgan Chase is asking a judge to move the case filed against them by the Madoff fraud trustee into Federal court, where they can demand a jury trial.
As this nations second largest bank, and a huge abuser of its customers, I’m not sure they are going to have an easy time finding jurors who don’t think they are a money hungry beast, so, good luck with that Chase.
Things just got a little easier for homeowners challenging their foreclosures.
The Massachusetts Supreme Court ruled in two foreclosure cases (WSJ Two Banks Lose in Foreclosure Cases,1/8/11) to void the foreclosures because the owners of the mortgages could not sufficiently prove that they owned the loans.
The Massachusetts case is a closely watched example of what some mortgage experts describe as “show-me-the-paper” cases over widely used procedures for transferring loans after they are made. Individual loans often are sold to an investor, with the new owner’s name left blank in loan documents to minimize paperwork hassles as the loan subsequently changes hands before being combined with other loans into mortgage-backed securities.
The real significance of this ruling however is the fact that the banks could not get the proper paperwork together even after months and for the Supreme Court of Massachusetts. It seems likely that the banks have really screwed up the paper trail in the last several years such that there may be a lot more loans they can not prove ownership on.
Even more reason to challenge your Chase foreclosure before it is final; start asking them now to prove they have the authority to foreclose on you.
JPMorgan Chase is being sued for $6.4 billion by Madoff bankruptcy trustee Irving Picard and is accused of ignoring warning signs so that they could profit from the scam.
Very similar to what they are accused of in the Tom Petters Ponzi Scheme, knowing something was wrong but choosing to profit from the business anyways.
Signing off with our last post for 2010, which happens to be our 1000th post as well, is a really slimy JP Morgan Chase story that does a good job at illustrating how Chase looks out for itself first.
In the earlier part of this decade, a Ponzi schemer named Tom Petters was busy scamming people out of almost 4 billion dollars. At the time, JPMorgan Chase’s own in-house hedge fund owned the Polaroid company and they cut a deal to sell it to Petters for almost $500 million.
JPMorgan Chase is now being sued by the trustee for the Ponzi scheme victims for $300 million and is accused of knowing the purchase was with money that was il-derived, but proceeding anyways so they could profit from it.
But the really bad part is that JPMorgan Chase is also accused of confiscating money that Petters had in the banks accounts just days AFTER HIS ARREST:
“This was JPMorgan trying to step ahead of the Ponzi scheme’s victims and creditors to the tune of $20 million bucks,”
In essence, Chase saw the writing on the wall and grabbed whatever it could to satisfy it’s own claims, regardless of whether they were entitled to it or any claims others might have had on it.
Chase’s philosophy must be that possession is 9/10 of the law.
Well now they are getting sued over it. Good.
And happy new year!
Legacy debt might come back to bite Chase according to this Wall Street Journal article.
Credit card company Providian was acquired by Washington Mutual which was then acquired by Chase. Back in the early 1990’s, Providian had an employee Martha Kunkle who was a robo-signer responsible for many of the affidavits related to debt and debt collection activity. After Ms. Kunkles death in 1995, and apparently until very recently, other employees would routinely sign affidavits as Martha Kunkle. These affidavits were then passed on to debt collectors such as Portfolio Recovery Associates.
So, if you are being sued for Providian/WaMu/Chase credit card debt, check all of your documents to see if any were signed by Martha Kunkle, as you might have a good case.
One interesting statement in the article is worth noting for anyone being sued by Chase (or any other bank) for debt collection:
Large debt collectors such as Portfolio Recovery Associates and publicly traded rivals Encore Capital Group Inc. and Asset Acceptance Capital Corp. frequently buy delinquent accounts in bulk. Information about each debt sometimes is little more than a line in a spreadsheet with the borrower’s name and amount owed, according to lawyers who represent borrowers.
The point is, ask your bank or the debt collection firm to prove you actually owe them money. They may not be able to do so.
I guess Chase just can’t be counted on to be reasonable?
James Shaw of Parsippany, who is being sued by Chase Bank, fits into two of those categories. Shaw, a former landscaper, suffered a hip injury and has been unemployed for three years.
He said he received unemployment compensation “on and off.” Finding it “tough to pay the bills,” he charged expenses to his credit card.
Later, he used what money he had to stay in his home and pay for necessities such as heat and electricity. The credit card payments had to take a back seat.
Eventually, Chase said he owed $17,784, and took him to court in July. Shaw, who is representing himself in the case, filed a response asking that the suit be dismissed.
“I’ve been trying to negotiate a settlement with them, but the amount of payment they’re looking for is more than I can afford at this time,” said Shaw, who recently had hip replacement surgery. His situation is at an impasse.
Read more …
WASHINGTON — US regulators subpoenaed JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Goldman Sachs Group, and Wells Fargo & Co., seeking information on the banks’ role in bundling mortgages for sale to investors, a person familiar with the matter said.
The Securities and Exchange Commission asked the banks for details on how mortgages were selected and bundled into securities, said the person, who declined to be identified because the probe isn’t public. Reuters reported the SEC probe yesterday.
The SEC, which is investigating business practices that might have contributed to the collapse of the subprime mortgage market, has sued companies and executives responsible for selling loan bundles that soured when the housing bubble burst.
Read More …
Bad bad Chase, Lawsuits | admin February 17, 2011 | 
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