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Countrywide Retaliates Against Employees Digging Up Fraud on Foreclosures in New York

It’s obvious that banks across America have had problems in recent years with the out-of-control foreclosure process.

But a recent article by iwatchnews.org shows that banks were so overwhelmed by what was going on that they were fraudulently altering documents in foreclosure cases and fired employees who saw it and reported it.
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Retaliation in New York and elsewhere is against the law, plain and simple. A company cannot fire an employee because they are a whistleblower or reported something illegal or wrong was going on in the business. This includes safety violations.

Sadly, this happens, however. Employers know they are doing wrong and when someone confronts them or points out what is happening because they are trying to do the right thing, the company comes down with the hammer.

Countrywide was one of the largest lenders in the country when Bank of America bought it in 2008. Since then, many reports have detailed the problems that Countrywide had with loan servicing, robo-signing and filing fraudulent documents in foreclosure cases.

But this story goes beyond signing fake signatures to documents. According to the news story, in 2007, corporate investigators for Countrywide sifted through paper that was in shred bins in the Boston area.

By finding the documents before they were shredded, investigators were able to find evidence that Countrywide workers were using scissors, tape and Wite-Out to create documents — fake banks statements, inflated property appraisals and appraisals switched on different properties.

This documentation was being used to kick people out of their homes. They were literally cutting and pasting documents together to make this happen.

Eileen Foster, the company’s fraud investigations chief, began looking into the problems and immediately got pushback from the company’s brass. One executive sent an e-mail to dozens of workers in the Boston area, warning them that there was an internal investigation and telling them not to put anything that could hurt them in writing. And she got a call from another chewing her out.

A senior manager who oversaw the branches wasn’t made available for an interview by investigators. Instead, the company’s “Employee Relations Department” did the interview and let managers vet the transcript before handing it over to investigators.

While employees were fired and branches shut down, many of the executives who likely authorized or demanded such actions went unscathed. Others who spoke up about the fraud were laid off. And when Bank of America bought out Countrywide, they fired her for “unprofessional conduct.”

But after the U.S. government intervened recently, she was given her job back and paid $930,000, after it was found that she was fired for retaliation for being a whistleblower. Others who worked with her say there was no way she was unprofessional, but only that the company had had enough of her digging.

Issues like these must be brought to light. A person cannot face this type of retaliation or discrimination in New York and allow companies to get away with it. It’s wrong and it’s unlawful.

The Law Offices of Ira S. Newman provides employment law legal counsel in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or contact us through the website.

More Blog Entries:

Documentation often Critical when Proving Employment Retaliation Lawsuits in New York: March 29, 2011
Additional Resources:

Countrywide protected fraudsters by silencing whistleblowers, say former employees, by Michael Hudson, iwatchnews.org