It took four years, two trials and one unsuccessful appeal by the prosecution to a higher court, but a former sales executive at Washington Mutual’s subprime lending unit Long Beach Mortgage was convicted of fraud Wednesday by a federal court jury in Sacramento.
The maximum penalty for mail fraud affecting a financial institution is 30 years in prison and a fine of as much as $250,000, or twice the value of the gain or loss, whichever is greater, according to Bloomberg.
The news service said Joel Blanford, 44, was found guilty of six counts of mail fraud for his involvement in a scheme to falsify loan documents that earned him more than $1 million in commissions from 2003 to 2005.
According to the 2008 indictment, Blanford worked for Long Beach Mortgage beginning in 1999 in two California offices in Dublin and Pleasanton. He was responsible for promoting the company’s subprime mortgage products to mortgage brokers acting on behalf of borrowers. In 2003 and 2004 he was instrumental in issuing more than 1,700 home mortgages collectively worth $360 million.
- UW, Alaska Airlines agree to naming-rights deal for Husky Stadium's field
- Wife upset dad disappointed in baby's gender
- A couple thoughts on Fred Jackson, Kam Chancellor and the Seahawks
- Seahawks preseason awards: MVPs, surprises, disappointments, toughest roster calls
- Seattle teachers vote to strike if agreement isn’t reached
Most Read Stories
Blanford paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status, and to turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage, prosecutors said. His commissions were based on the number of loans the bank processed.
An earlier trial resulted in a hung jury.
Long Beach’s crumbling portfolio of poorly underwritten mortgages was a key contributor to WaMu’s financial collapse, and the company’s top officials later came under fire for not heeding warnings that the unit was rife with fraud. In one WaMu email cited by U.S. Sen. Carl Levin, D-Mich., an internal 2005 audit found that 83 percent of loans approved by the bank’s Montebello, Calif., office were fraudulent.
Sentencing is scheduled for Dec. 10.
— Rami Grunbaum and news services
Make room for bicycles. That was the message two prominent developers delivered at a real-estate industry gathering this past week.
Wallace Properties put 30 bike racks in the garage of its 107-unit Citizen apartment complex near Seattle University only because the city required that many, President Kevin Wallace told the monthly breakfast gathering of NAIOP-Washington.
He was skeptical the building needed that many.
Now the building, finished in April, is all leased up. All 30 bike racks are spoken for, Wallace said — and Citizen is squeezing in seven more to accommodate additional demand.
That story prompted a nod and a second from fellow panelist Pat Callahan, of Urban Renaissance Group, who represented Clarion Partners in its spring acquisition of the 32-story office tower 1600 Seventh Avenue and concurrent lease of half the building to Nordstrom.
When he was negotiating with Nordstrom, Callahan said, the retailer was much more concerned about accommodating bicycles than cars.
—Eric Pryne, firstname.lastname@example.org
It was a good-news, bad-news kind of week in Oregon for Spokane-based Sterling Bank.
The same week the company announced it had been named by The Oregonian as one of its Top Workplaces 2012, Sterling was hit with a lawsuit by two former mortgage-loan officers claiming it broke federal pay laws by denying them overtime pay.
The former employees, brothers Micah and David DuBeau, worked at a Medford branch of Sterling and its predecessor, Mountlake Terrace-based Golf Savings Bank, between 2010 and 2012.
Their suit, which seeks class-action status, says the bank improperly classified mortgage-loan officers as exempt from overtime-pay requirements and “thus they all performed work without minimum wage and/or overtime compensation.”
The company’s loan officers “routinely work in excess of 40 hours per week in an effort to sell mortgage loans and thus obtain commissions under Defendants’ compensation plans,” says the suit, filed in federal court in Medford.
It also alleges the bank illegally charged them for credit-report fees, appraisal fees and other expenses that were part of the bank’s cost of doing business.
According to the suit, a 2010 Department of Labor interpretation letter says the typical mortgage-loan officer’s duties don’t make them exempt from overtime requirements. “Numerous banks and other entities throughout the United States that have mortgage-loan officers” have been sued on similar grounds and have ultimately changed their pay policies, it says.
The suit, which also alleges the bank violated state wage laws, doesn’t specify the damages sought.
Sterling Bank spokeswoman Andrea Worley said it has no comment on the lawsuit.
— Rami Grunbaum