Wells Fargo VP accused of playing 'critical role' in fraudulent home loans

Pointing The Finger

Wells Fargo Vice President Kurt Lofrano played a 'critical role' in helping the bank hide fraudulent home loans that cost the U.S. $189m, the U.S. government claimed in a filing in Manhattan federal court.

Bloomberg reports that lawyers for the U.S. today asked a judge to let it add Lofrano to its fraud suit claiming Wells Fargo was reckless in underwriting mortgage loans and failed to report fraudulent and noncompliant loans to the U.S. Department of Housing and Urban Development.

The fraud forced the Federal Housing Administration to pay $189m in insurance claims on defaulted loans, the U.S. said.

Lofrano, who was in charge of self-reporting for Wells Fargo, 'played a critical role in the bank’s decision not to report to HUD, as required, more than six thousand materially defective loans that Wells Fargo had falsely certified to HUD for FHA insurance', the government said in the filing.

The U.S. sued Wells Fargo last year under the Federal False Claims Act and the Financial Institutions Reform, Reinvestment and Recovery Act of 1989. The government said it notified Wells Fargo on 1st November that it planned to add Lofrano to the case.

To access the complete Bloomberg article hit the link below:

Wells Fargo's Lofrano Was 'Critical' to Fraud, U.S. Says

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images: © Lee Haywood, © Lisamarie Babik

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