Hackers Say Email Leaks Offer Evidence of Fraud by Bank of America :: The Construction Management Pro

Hackers Say Email Leaks Offer Evidence of Fraud by Bank of America

 By: Carrie Bay Printer Friendly View

A group of Internet hackers has released internal emails that they say proves Bank of America committed mortgage fraud by “knowingly hiding foreclosure info from federal auditors.”  The hacker group, Anonymous, claims to have obtained a slew of inter-departmental emails from a former employee of Balboa Insurance, a provider of lender-placed hazard insurance coverage that BofA inherited with its purchase of Countrywide and sold to QBE Group of Australia early last month. According to the emails posted on the Anonymous Web site, the exchange between the source, who worked at Balboa for seven years, and several other company employees discusses removing DTNs (document tracking numbers) from supporting documents so they cannot be accurately matched with the corresponding mortgages.

Allegedly, these actions were taken to allow BofA to charge customers for forced-placed insurance that they didn’t need, which in turn permits the bank to adjust a homeowner’s escrow account requirements “for the inflated premium of a full coverage policy placed by Balboa’s insurance tracking group,” according to an email from the former employee.

Anonymous also claims the email conversations provide proof that Bank of America foreclosed on homes without having the proper paperwork to justify a property seizure. Although in one email thread between Anonymous and its source, the hacker group promised the informer that his name would not be divulged, numerous emails posted on the group’s site reveal him to be Jason Vaughn. In one email sent to several other Balboa employees, Vaughn himself questioned the legitimacy of altering DTNs within the company’s tracking system. “I’m just a little concerned about the impact this has on the department and the company. Why are we removing all record of this error?” Vaughn reportedly wrote. “…this to me seems to be a huge red flag for the auditors.”

The whistle-blowing Web site WikiLeaks indicated months ago that it had obtained damaging emails related to the operations of a major U.S. lender. Although the name of the bank was not expressly disclosed, the WikiLeaks target was widely rumored to be Bank of America. The Anonymous hacker group is linked to the WikiLeaks organization. Anonymous claims to have additional emails detailing what is describes as “fraud” by BofA that will be released at a later date. The validity of the leaked information has not yet been verified.

A Bank of America spokesperson said in a statement to DSNews.com that the former Balboa employee is “trying to generate interest in non-foreclosure related clerical and administrative documents that he stole from the company. We are confident that his extravagant assertions are untrue.” The spokesperson says Vaughn departed the company in January, and is releasing stolen Balboa documents with “baseless and unsupportable statements that completely mischaracterize the documents.”

Vaughn asserted in an email directly to Anonymous that Balboa Insurance and Countrywide were “falsifying loan documentation in order to proceed with foreclosures by fixing letter cycles in the system, reporting incorrect volumes to [lenders and auditors] to avoid fines for falling behind on loan modifications, [and] purposely adjusting premiums for REO insurance.” BofA said in its statement, “Contrary to his representations online, the documents that have been published are not indicative in any way of any fraud, deceit, or intentional wrongdoing on the part of Balboa, Countrywide, or Bank of America. The material he has provided is not related to foreclosure.”

The bank went on to explain, “The most specific emails refer to a clerical error made by another former Balboa employee, who transposed information in two places on flood-insurance related documentation. The clerical error was indentified and corrected as a result of Balboa’s own quality assurance processes prior the documents being sent.” When asked by Anonymous why he was revealing the information, Vaughn said, “The only reason I’m doing it is because they already took everything from me….I’ve got nothing left to lose at this point.”

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