2011-03-13 Bank Employee Urges Anonymous to Help Other Bank of America Employees Leak Details on Fraud

Anonymous, the hacktivist group known for supporting WikiLeaks and mounting actions in cyberspace in defense of freedom of information and transparency, launched “#BlackMonday” at midnight. Emails between an Anonymous user and an employee with Balboa Insurance, whose work is connected to the operations of Bank of America, were posted.

The employee claims to have worked for the company for the last seven years. He writes, “Many of you do not know who Balboa Insurance Group (soon to be rebranded as QBE First by Australian Reinsurance Company QBE according to internal communication sent to all Balboa associates) is, but if you’ve ever had a loan for an automobile, farm equipment, mobile home, or residential or commercial property, we knew you. In fact, we probably charged you money…a lot of money…for insurance you didn’t even need.”

Emails from the employee allegedly affirm suspicions that banks like Bank of America have been engaged in rampant fraud. But, the bigger story here is Anonymous has made contact with an employee at Balboa Insurance and opened up a conduit for getting information out to the world. He appears intent to push others to blow the whistle of Bank of America fraud.

In an email sent on March 11, 2011 at 7:06 pm, the Balboa Insurance employee writes about a key strategic issue that Anonymous faces in its campaign to take down Bank of America for its disingenuous and fraudulent dealings (particularly a campaign that began when the bank announced it would cease to process donations to WikiLeaks).

The employee describes only having emails that focus around a core group of managers. He suggests the emails only “drive the nail into 1 of the hydra’s many heads” and that “Bank of America knows damage control.” He goes on to write, “All you have to do after bringing the one story to light is create an avenue for everyone else to start doing what I did. Once employees see that they can be successful at it, you won’t just have a stronger axe to cut off 1 head…you’ll have 1000 axes aimed at all of the heads.”

It is clear the employee has followed the operations of Anonymous closely. Continuing the hydra metaphor, he notes that, while HBGary Federal had a “handful of people” destroyed, a head will grow in place of where those people used to be and be smarter and faster.

The employee is prepared to work with Anonymous to get in touch with others, who can share emails or evidence of criminal conduct. He writes in an email what he thinks of Bank of America is that it is “a faceless corporation but it is managed and operated by real people like you and I. These people are scared because the Bank of America family is the only safe place they know. Some of them are bad, but some of them are good people that don’t even realize what they’re involved in is wrong. They’re bombarded with corporate brainwashing on a daily basis and never told the full story. They’re encouraged to ignore the media and only listen to official Bank of America internal emails for legitimate news.”

When told Anonymous is can help others tell their story, he reacts, “Don’t hold your breath. These people are conditioned to take orders and not think about anything. Nobody works at BofA because they grew up dreaming to work there. They work there because they’re too scared to stand on their own in this world and want to be protected by the corporate family.”

“This place is run like a cult,” writes the employee. It is clear that he is significantly appalled with Bank of America. And, he pleads with Anonymous to encourage those within Anonymous to listen to other employees’ stories and take them seriously “no matter where they are on the corporate ladder.” He urges Anonymous to “encourage them to take a stand against what they know is wrong. Let them know the BofA way of life is not the only way of life. Give them a voice. What you’ll find when you do that will amaze you.”

Key Exchange Indicating Fraud

An operations manager sends the following:

Subject: GMAC DTNís for Image Removal ñ Urgent Request
Importance: High
Hello,
The following GMAC DTNís need have the images removed from Tracksource/Rembrandt.
354499768
354499769
354499770
354499771
354499772
354499773
354499774
354499775
354499776
354499777
354499734
354499735
354499736
354499739
354499740
354499741
354499742
354499745
354499746
354499747
354499750
354499751
354499754
354499725
354499726
354499727
354499728
354499729
354499730
354499731
354499732
354499733
354499718
354499719
354499720
354499721
354499722
354499723
354499724
354499707
354499708
354499710
354499711
354499713
354499714
354499715
354499697
354499698
354499699
354499700
354499702
354499704
354499705
354499706
354499667
354499668
354499669
354499670
354499671
354499672
354499673
354499674
354499675
354499676
354499677
354499678
354499679
354499680
354499681
354499682
354499683
354499686
354499687
354499688
354499691
354499692
354499693
354499694
354499695
354499696

These are "document tracking numbers," a number assigned to all incoming/outgoing documents (letters, insurance documents, etc).

A woman with Balboa Insurance replies:

I have spoken with my developer and she stated that we cannot remove the DTNís from Rembrandt, but she can remove the loan numbers, so the documents will not show as matched to those loans.

I will need upper management approval from Jason, Peggy and Kirsten, since this is an usual request, before we move forward.

Rembrandt is the insurance tracking system.

Peggy with upper management replies, "Where will these letters show up then?" The woman from Balboa responds, "The letters will not show in Rembrandt if you search by loan number. If you search by DTN, you will find the document, but it will not be matched to any loan."

The numbers' removal are then "approved."

The operations manager expresses his concern:

I'm just a little concerned about the impact this has on the department and company. Why are we removing all record of this error? We have told Denise Cahen, and there is always going to be the paper trail when one of these sent documents come back, this to me, seems to be a huge red flag for the auditors: example: a scanned document that was mailed to us asking why the letter was received when the letter, albeit erroneous ñ this being the letters that went out in error ñ the auditor sees the erroneous letter but no SOR [System of Record] trail or scanned doc on the corrected letter is in the SOR and scanned in). What am I missing? This just doesnít seem right to me.

What Goes on When Working

The employee describes Balboa Insurance Group as a business that profits off of “insurance tracking and Forced Placed Insurance (aka Lender Placed Insurance, FOH, LPI, etc).”

What this means is that when you sign your name on the dotted line for your loan, the lienholder has certain insurance requirements that must be met for the life of the lien. Your lender (including, amongst others, GMAC, Aurora Loan Services [a subsidiary of Lehman Bros Holdings], IndyMac Federal Bank [a subsidiary of OneWest Bank], Saxon, HSBC, PennyMac [a collection agency started by former Countrywide Home Loans executive Stan Kurland after CHL and Balboa were sold to BAC], Downey Savings and Loans, Financial Freedom, Select Portfolio Services, Wells Fargo/Wachovia, and the now former owners of Balboa Insurance themselves…Bank of America) then outsources the tracking of your loan with them to a company like Balboa Insurance.

Balboa makes some money by charging these companies to track your insurance (the payment of which is factored into your loan). If you do not meet the minimum insurance requirements set by your lienholder, Balboa Insurance places a force placed insurance policy on your loan. You are sent a letter telling you that you do not have insurance, and your escrow account is then adjusted for the inflated premium of a full coverage policy placed by Balboa’s insurance tracking group.

One email in particular details fraud and alleges Balboa Insurance/Countrywide knowingly hid foreclosure information from federal auditors during the federal takeovers of IndyMac Federal (a subsidiary of OneWest) and Aurora Loan Services (a subsidiary of Lehman Bros holdings). The email says loan documentation was falsified “in order to proceed with foreclosures by fixing letter cycles in the system, reporting incorrect volumes to all of their lenders and to the federal auditors to avoid fines for falling behind on Loan Modifications, purposely and knowingly adjusting premiums for REO (Real Estate Owned) insurance for their corporate clients while denying forbearance for individual borrowers.”

Such a revelation, when coupled with the revelation that IndyMac/OneWest had “robosigners” sign at least 24,000 mortgage documents monthly, simply adds to the sea of evidence that has been stacking up against banks like IndyMac and Lehman Bros. In fact, a group of homeowners filed a class-action lawsuit against Aurora Loan Services on August 20, 2010, “claiming the mortgage company duped them into paying tens of thousands of dollars each to have troubled mortgages reviewed by the company with promises of loan modifications, only to have their property foreclosed with little or no notice.” The suit stated Aurora Loan had “reaped more than $100 million” in “illicit profits” from the “scheme.”

He details coming in from Countrywide through a buyout and having “inside knowledge” of portfolios transferred to Bank of America with them. He discusses what happened when a Countrywide/BAC contract was made and how he was soon sitting in the same building. The “cross pollination of customer information” (that he considers to be “shady”) happened, and he thinks that should have been addressed by the government during Bank of America’s buyout.

He outlines what is going on: “When you call Blockbuster, you’re not talk to a Netflix rep, or when you return an item to Target, you don’t get Walmart store credit, but somehow that’s allowed in the banking industry. A data entry processor can be working on a loan for GMAC one minute, BofA the next and HSBC the next.”

It gets better: “When you have a loss and call in to their claims department, their representatives aren’t trained on the federal regulations quoted at the bottom of their emails. When you call in to Sprint, for example, you’re required to verify the last four digits of your social security number, date of birth or some other type of information, but when you call in for a home or auto claim to Balboa, regardless of the lender, they will give you any loan information you ask for without you ever having to verify any personal information as long as you know either your loan number, VIN number, or property address, depending on the situation.”

Another couple of emails highlight the division of labor among employees and a “prize” system. The detailing of that system reveals that “mundane tasks” are “outsourced to SPI in the Philippines and Mphasis in India.” He writes, “Every day, there is a call where the execs at those companies are disputing errors” for things like errors with addresses because the “address system is different so they often don’t realize that 123 N Main St is the same address as 123 Main St.”

This highly anticipated release of material should have high impact throughout the day. It is not the release of material Julian Assange or WikiLeaks has been promising, but it looks like the emails will be enough to re-focus people’s attention on the issue of mortgage fraud.

Unfortunately, much has come to the fore in the US on fraud but no executives from banks have faced prosecution or gone to jail.

There is little question that it has taken place. Groups or organizations have engaged in specific actions to call attention to the fraud. Arizona and Nevada have sued Bank of America for "misleading customers with 'false promises' about their eligibility for modifications on their home mortgages." And, US Uncut(a newly formed coalition of activists inspired by UK Uncut) has launched actions against Bank of America to catalyze a movement that will bring an end to the corporate tax dodging Bank of America routinely engages in.