To: RetiredNow who wrote (121599 ) 9/23/2012 1:32:15 PM From: tejek Respond to of 149317 WaMu unit banker convicted of fraud By Seattle Times business staffIt took four years, two trials and one unsuccessful appeal by the prosecution to a higher court, but a former sales executive at Washington Mutual’s subprime lending unit Long Beach Mortgage was convicted of fraud Wednesday by a federal court jury in Sacramento. The maximum penalty for mail fraud affecting a financial institution is 30 years in prison and a fine of as much as $250,000, or twice the value of the gain or loss, whichever is greater, according to Bloomberg. The news service said Joel Blanford, 44, was found guilty of six counts of mail fraud for his involvement in a scheme to falsify loan documents that earned him more than $1 million in commissions from 2003 to 2005. According to the 2008 indictment, Blanford worked for Long Beach Mortgage beginning in 1999 in two California offices in Dublin and Pleasanton. He was responsible for promoting the company’s subprime mortgage products to mortgage brokers acting on behalf of borrowers. In 2003 and 2004 he was instrumental in issuing more than 1,700 home mortgages collectively worth $360 million. Blanford paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status, and to turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage, prosecutors said. His commissions were based on the number of loans the bank processed. An earlier trial resulted in a hung jury. Long Beach’s crumbling portfolio of poorly underwritten mortgages was a key contributor to WaMu’s financial collapse, and the company’s top officials later came under fire for not heeding warnings that the unit was rife with fraud. In one WaMu email cited by U.S. Sen. Carl Levin, D-Mich., an internal 2005 audit found that 83 percent of loans approved by the bank’s Montebello, Calif., office were fraudulent. Sentencing is scheduled for Dec. 10.seattletimes.com