Deutsche Bank Sued for Defrauding the U.S. Government of More Than $1 Billion

Deutsche Bank Sued for $1 Billion

May 4, 2011

Press TV - According to the complaint, Deutsche Bank's MortgageIT subsidiary lied in order to get Federal Housing Administration (FHA) insurance for its loans, state-run BBC reported.

FHA rules say lenders must make sure the borrower will be able to repay the loan, but the Justice Department claims Deutsche did not do so.

The claim is "unreasonable and unfair” and "we intend to defend against the action vigorously," a Deutsche spokesperson said on Tuesday.

The lawsuit is one of the first targeting mortgage lenders under the federal False Claims Act.

The government says that between 1999 and 2009, MortgageIT endorsed more than 39,000 mortgages for FHA insurance.

Deutsche Bank bought MortgageIT for USD 430m in 2007, and the government said it had paid out more than USD 386m in FHA insurance claims and related costs.

The global financial crisis was sparked by mortgages being given to people who could not afford them, with the debt then being repackaged and sold on to investors.

The US government has been trying to hold the mortgage industry responsible for the crisis as well as the housing slump and large numbers of foreclosures.

Deutsche Bank is One of The Too-Big-To-Fail Banks:

99% of what the Fed’s done in the last two years has been aimed at supporting the large, Too-Big-To-Fail (TBTF) Wall Street banks.

The reasons for this are:

1) The Fed is in fact CONTROLLED by these banks via the Primary Dealer network

2) Fed leaders are all front-men for Wall Street

In order to understand these, you need to know that the REAL power of the Fed lies in its primary dealer network, NOT stooges like Ben Bernanke.

If you’re unfamiliar with the Primary Dealers, these are the 18 banks at the top of the US private banking system. They’re in charge of handling US Treasury Debt auctions and as such they have unprecedented access to US debt both in terms of pricing and monetary control.

The Primary Dealers are:

1. Bank of America

2. Barclays Capital Inc.

3. BNP Paribas Securities Corp.

4. Cantor Fitzgerald & Co.

5. Citigroup Global Markets Inc.

6. Credit Suisse Securities (USA) LLC

7. Daiwa Securities America Inc.

8. Deutsche Bank Securities Inc.

9. Goldman, Sachs & Co.

10. HSBC Securities (USA) Inc.

11. J. P. Morgan Securities Inc.

12. Jefferies & Company Inc.

13. Mizuho Securities USA Inc.

14. Morgan Stanley & Co. Incorporated

15. Nomura Securities International Inc.

16. RBC Capital Markets

17. RBS Securities Inc.

18. UBS Securities LLC.

[Source]

Read More...