Home > business, Real Estate > Latest Headlines: Fraud and Abuse in Real Estate Investment & Banking

Latest Headlines: Fraud and Abuse in Real Estate Investment & Banking

Headline News today – Fraud and abuse in real estate and banking.


Today a press release was issued from The Office of the Comptroller of the Currency (OCC)  assessing $950 million in fines against three national banks for “unsafe or unsound practices related to their foreign exchange trading businesses.”

You can see the press release and the supporting consent orders here

According to the Press Release, “The fines against Bank of America…; Citibank…; and JPMorgan Chase…, follow multiagency examinations and investigations of the banks’ activities in the global [foreign exchange] market.


The OCC indicates in its allegations that:

The foreign exchange (“FX”) market is one of the largest and most liquid markets
in the world. The FX market enables participants to buy, sell, exchange, hedge,and speculate on currencies”


the Bank’s “spot FX traders” participated in multibank chatrooms on instant messaging platforms until it prohibited such communications in January 2013. While participating in multibank chatrooms, some of the Bank’s G10 spot FX traders discussed engaging in potential misconduct with traders from other banks or market participants.



Skeptical of big banks? I don’t see why…


In other news…


The DOJ sentenced a  commercial real estate developer and mortgage broker  to serve 121 months in prison today for his role in a $50 million securities fraud scheme. You can check out the press release here

Apparently, the developer “solicited investors to provide funds for the development …falsely told investors who purchased notes through the program that they would receive a lien on a specific piece of property, and that the lien would be in first position.”

In reality,  “he never provided investors with a lien, and instead conveyed a lesser interest that did not allow investors to directly foreclose on the property to protect their investment.”

The developer will be ordered to pay restitution along with serving his sentence – I feel bad for the unwary investor caught up in that deal, I wouldn’t hold my breath about getting paid back…


Yikes, bad stuff!


Takeaway here: Real estate backed financing can be complicated, and can easily lend itself to fraud and abuse.


Investors: It’s important to vet  opportunities out through your counsel!


Questions? Comments?

email: Jeshua@dwlawpc.com



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