Banker pleads guilty to secondary marketing scheme

by Rachel.Norvell14 Oct 2014
A banker who sold mortgages on behalf of GMAC, now Ally Financial, pleaded guilty in San Diego federal court to receiving more than $1 million in bribe payments.

Prosecutors said Robert Moreno, 42, took the bulk of the bribe payments from San Diego businessman Israel Hechter, who pleaded guilty in September to paying bribes to Moreno and "bank insiders" at JPMorgan Chase Bank, National City Bank and other financial institutions.  Hechter used the bribes to win bids for mortgages sold on the secondary market.

In order to make sure that Hechter’s bids were accepted, the bankers rigged the bidding process for the mortgage loans and would reject other bids and erase or ignore bids from other qualified competitors.

Moreno pleaded guilty to conspiracy to commit bank bribery and tax evasion and faces a maximum sentence of five years in prison. As detailed during his guilty plea, Moreno used his position and influence to ensure that his customers won their bids to purchase mortgage notes.

The mortgages Moreno sold on behalf of GMAC were mostly non-performing or distressed second mortgages. After purchase, Hechter pooled the loans and sold shares of the pools to investors, usually friends and family members.
Hetcher’s company Ocean 18 LLC would service the loans and collect monthly payments from the borrowers or would initiate foreclosure proceedings when the borrowers defaulted..

Ally Financial, originally known as GMAC when it was the in-house financing arm of General Motors Corp, announced last year it would stop offering or servicing home loans. During the bust, the Detroit-based company was burdened by mortgages made to borrowers with troubled credit, and in 2007, it started to reported losses that reached $10.3 billion in 2009.


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