CfA Calls On Federal Authorities to Investigate Steven Mnuchin’s OneWest Bank For Fraud

CfA Calls On Federal Authorities to Investigate Steven Mnuchin’s OneWest Bank For Fraud
Steve Mnuchin Image source: FBN Video Screenshot

WASHINGTON, D.C. – Today, Campaign for Accountability (CfA) called on the Department of Justice and the Office of the Comptroller of the Currency to investigate OneWest bank for using potentially illegal tactics to foreclose on as many as 80,000 California homes.  Mr. Mnuchin, whom President-elect Trump has nominated for Secretary of the Department of the Treasury, previously served as the CEO of OneWest.

Read the complaint here

Steven Mnuchin

CfA Acting Executive Director Daniel Stevens said, “It appears billionaire banker Steven Mnuchin profited at the expense of thousands of California homeowners who lost their homes because of OneWest’s illegal actions.  Last year, when it was revealed that Wells Fargo had been defrauding consumers, CEO John Stumpf was forced to resign.  In contrast, Mr. Mnuchin may be receiving a promotion.”

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In 2013, the California Attorney General’s Office compiled a litany of OneWest’s egregious practices and drafted a sample legal complaint to file against the bank.  The state’s investigation found OneWest “signed and backdated false instruments, acknowledged them to notaries”; failed to comply with legal requirements related to the “execution, timing, and mailing of foreclosure documents,” and committed numerous other transgressions.

Earlier this week, The Intercept released the leaked memo. Despite the strong recommendation from her deputies, then-California Attorney General Kamala Harris declined to pursue the case against OneWest.  Mr. Mnuchin’s spokesperson told The Intercept that only the federal government has jurisdiction to investigate OneWest.  CfA’s complaint calls on federal authorities to pick up where California officials left off and continue the investigation.

The California AG’s office reported that not only did OneWest resist subpoenas for documents, the bank also obstructed the state’s efforts to obtain evidence from others with information, including Lender Processing Service.  LPS previously had settled a case with the Justice Department for its role in a six-year scheme in which employees prepared and filed more than one million fraudulently signed and notarized mortgage-related documents.

OneWest may have violated numerous federal laws including wire fraud, mail fraud, and conspiracy statutes.  If any employee of OneWest signed or caused documents to be backdated and then transmitted those documents either via mail or wire, they may have engaged in mail and/or wire fraud.  And if multiple employees acted in concert on these actions, as the California Attorney General’s Office memo suggests, they may have engaged in an illegal conspiracy.  DOJ also has the option of pursuing the case civilly through the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

Mr. Stevens continued, “In 2008, America’s banking system nearly collapsed while federal prosecutors sat on the sidelines.  Federal officials need to get off the bench and prosecute the culprits behind the tactics that nearly wrecked our economy.  Donald Trump campaigned on the promise to stick up for little guy against the big banks.  A refusal to investigate OneWest, run by one of his top supporters and now cabinet nominee, would show its just business as usual in the nation’s capital.”

Photo: Andreas Branch/Patrick McMullan/Sipa via AP Images

Campaign for Accountability is a nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.

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