rico-lawsuit

Louisiana sues 17 banks under RICO laws for MERS scheme

April 19, 2012
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rico lawsuit Louisiana sues 17 banks under RICO laws for MERS scheme

Louisiana stands up to big banks

In the State of Louisiana, 30 judges representing 30 parishes are suing 17 banks, stating that the Mortgage Electronic Registration System (MERS) is a “scheme” set up to illegally defraud the government of transfer fees, and that mortgages transferred through MERS’ recording system are illegal as the promissory note of any mortgage is inseparable from the mortgage, which is what MERS does.

MERS was initially established by Fannie Mae and Freddie Mac nearly 20 years ago in conjunction with several major banks as a means to expedite the loan recording process as it used to be done through individual county clerk offices which was slow, and the founders went ahead even though most states did not have laws that authorized them to bypass the required filing with clerks.

Several states like Delaware and Ohio, along with the City of Dallas have already sued MERS and their bank partners, claiming millions were bypassed in filing fees due, and that the banks should have known that their filing system could lead to improper filing. These claims have been supported by numerous studies, one of which asserts that MERS destroyed the entire chain of title in America and is at the core of the housing crisis.



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RICO laws took down the Gambinos, may penalize banks as well

What is different with Louisiana’s lawsuit is that they are pulling out the big guns and suing under RICO laws (Racketeer Influenced and Corrupt Organizations Act), alleging wire and mail fraud and a scheme intended to defraud the parishes out of their lawfully owed recording fees. RICO laws have taken down the Gambino crime family, the Genovese crime family, Hell’s Angels, and the Latin Kings and carry treble damages, which is triple the amount of actual damages.

The banks named in the suit, according to court documents are Bank of New York Mellon, Bank of America, Chase Home Mortgage of the Southeast, JP Morgan Chase, CitiMortgage, GMAC (now Ally Financial), HSBC, Merrill Lynch, Nationwide Advantage Mortgage Company, Suntrust Bank, United Guaranty Corporation, Washington Mutual (now owned by Chase), Wells Fargo, Deutsche Bank, U.S. Bank, and La Salle Bank.

For infractions dating back ten years, the 30 parishes are suing for the following and demanding a jury trial:

  1. Treble damages (which will likely be in the millions)
  2. Prejudgement interest as permitted by law
  3. Reasonable attorney’s fees and costs
  4. Interest on the judgment as provided by law
  5. A permanent injunction
  6. Such other relief as the Court deems just and proper

Tara Steele is the News Director at AgentGenius, covering real estate news, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, she frequently checks her email, simply click the link below.