The one main thing missing from the recent escalation in charges against the major banks in regard to the fraudclosure scandal has been an internal whistleblower who can corroborate that all the charges against the various illicit mortgage practices. After all, it is one thing to lay allegations, and totally different for a court of law to find that these are validated. So far it is precisely the latter that has been missing as no court is willing to escalate an issue that could potentially unwind decades of mortgage securitization. Yet all that may be about to change. Daily Finance's Abigail Field presents the case of one Linda Almonte, a former employee of JPM, who is not only suing the bank for wrongful termination, but has now also filed a whistleblower complaint with the SEC. Filed says: "The core allegations add context to her lawsuit, and they charge Chase with grotesque and illegal practices involving its credit card debt processes, including robo-signing." Sure enough, JP Morgan is denying everything. Yet a close look at the details presented by Almonte indicates that either she is blatantly lying, or JPM may be in water just as hot as Bank of America.
Per the formerly confidential statement, Almonte's 5 main allegations regarding JP Morgan are as follows:
1. Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts. . .when in fact Chase Bank executives knew that many of those accounts had incorrect and overstated balances.
3. Chase Bank executives routinely destroyed information and communications from consumers rather than incorporate that information into the consumer's credit card file, including bankruptcy notices, powers of attorney, notice of cancellation of auto-pay, proof of payments and letters from debt settlement companies.
4. Chase Bank executives mass-executed thousands of affidavits in support of Chase Banks collection efforts and those Chase Bank executives did not have personal knowledge of the facts set forth in the affidavits.
5. When senior Chase Bank executives were made aware of these systemic problems, senior Chase Bank executives -- rather than remedy the problems -- immediately fired the whistleblower and attempted to cover up these problems.
As for the background on Almonte, here is what field dug up on the former employer:
During her time at Chase, Almonte was a "mid-level executive" who "supervised employees across the litigation and post-judgment functions" of the credit card litigation department.
In March, she sued the bank, claiming that she was fired for refusing to participate in the sale of 23,000 credit card accounts Chase had packaged for sale. Almonte says 5,000 of the accounts listed the wrong amount owed, and thousands more had other problems. By going forward with the sale after being informed of the problems, Almonte says, Chase was breaking the law.
Almonte's whistleblower complaint provides big-picture context for the sale she refused to participate in, providing background on how so many credit card accounts could contain flawed data.
To be sure, there may be some prior animosity which has only bubbled to the surface due to the termination, which may serve to diluate Almonte's claims somewhat, which may be perceived as retaliation. What will be far more useful is finding a whistleblower who is still in good standing and employed by either JPM or any of the other large mortgage lenders. We are confident that following this important example, many more far more credible cases will soon emerge. The result will be another major push against the auditors and FASB in general, to make even legally mandated price discovery irrelevant when it comes to the trillions of "assets" held on the bank books. Either that, or a prompt settlement with the various AGs who are currently investigating the bank and its peers, so as to remove any future legal standing of new claims to the bank's mortgage practices.
Full Almonte whistleblower complaint: