Self-Styled Robin Hood Banker Pleads Guilty

An ex-vp at a bank plead guilty last week to modifying over 100 loans to make it look like the customers were still current on their loans instead of overdue. This was not a money-making scheme, he was trying to help them. Nevertheless, it was fraud, and he could face up to 30 years in prison and a $1 million fine.

“I thought I was helping the customer stay afloat, so to speak, as the times got bad, and that economically it would improve, and everything would get back to a normal situation. And those loans would be paid off, times would get better, other property would sell, the bank would not take a loss,” the ex-First Security Trust & Savings banker told the court.

Banker pleads guilty in Robin Hood-like scheme [Chicago Tribune] (Thanks to mythago!)


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  1. Loias supports harsher punishments against corporations says:

    That’s a God damned American hero.

  2. qwickone says:

    I thought I would, literally, never see this happen. I applaud his efforts, if not his methods.

  3. aja175 says:

    Uhm. What part of that didn’t sound like a career limiting idea?

  4. Loias supports harsher punishments against corporations says:

    If you read the article, that bank was “in serious troubles” specifically due to the excessive number of mortgages that are “seriously delinquint.”

    So the VP figured that if he loans these people money to stay afloat, then not only would the homeowner keep their home, but the bank wouldn’t have to deal with countless foreclosures. Foreclosures cost the bank a lot of money, and in the long run it’s better for the bank that the homeowner stay in the home rather than foreclose it, assuming they eventually become current on their payments.

    Really, he did the morally and financially right thing, even if it wasn’t the legally right thing.

    • Dutchess says:

      Since when is falsifying documents a “morally” correct thing to do?

      He lied to the bank and told them 100s of people were able to replay their loans who likely weren’t but because he helped the small guy it’s “morally” right?

      If the value of these loans were material and should have been written off it means their financial statements were inaccurate and therefore the company filed incorrect data to SEC or investors.

      So, I would like you to explain how falsifying bank documents in favor of a few home owners is the “morally and financially” correct thing to do?

      • Dory says:

        “Since when is falsifying documents a “morally” correct thing to do?”

        There’s nothing moral or immoral about proper filing of documents. There are ethical issues concerning lying, of course, but that’s not particularly clear-cut.

        • Dutchess says:

          Filing false documents is immoral or do you not consider lying immoral?

          Lie – A false statement that is intended to deceive.

          If you file false document’s you’re lying to the corporation and investors. In this case you lied and said 100’s of loans on the books were still viable investments and were not a going concern for the bank.

          Investors use financial data to determine whether they invest money into the company. You’re lying to make the company look better. No matter WHY he lied it doesn’t negate the fact that he lied.

          So, if that’s not immoral what is?

          • Chinchillazilla says:

            I think that reasons actually do matter with lies. If you ask me if you look fat and I say no to make you feel better, how is that immoral?

            • Doubts42 says:

              because you now have a false body image and will not change the behaviors that made you fat in the first place, which can have serious detrimental effects on your health.

            • Michaela says:

              Rather than lie, it is usually better to just change the subject or offer a positive.

              For example, if a friend asks me if she looks fat in a particular outfit while we are shopping (and it does actually make her look quite broad), then I will usually just say “That dress doesn’t really seem to suit you. Why not try this dress?” and offer a better (more flattering alternative). I would rather my friends do the same for me, rather than let me spend my money on something that will probably cause me future embarrassment and regret.

              Honesty is always the best policy. The issues arise when one must figure out the best way to present the truth.

          • Lucky225 says:

            You mean like what the bank did when it created money out of thin air based on a person’s signature?

            • Michaela says:

              First, as your mommy probably told you, two wrongs don’t make a right. Just because your buddy cheats on the test and the you do the same doesn’t make cheating okay, even though the rules of the test have been compromised.

              Second, the creation of money through loans really isn’t a bad idea when used PROPERLY. It gives opportunity for investment and thus promotes economic growth.

              • Dean says:

                Neither is debt relief, which can have the exact same results (in addition to creating a more stable economy).

                • Michaela says:

                  No. Debt relief still has someone losing the money that they were owed, so I wouldn’t think of it as an ideal situation. I would rather make movements towards giving individuals ONLY the loans they can handle, rather than allow them to get into a deep hole of debt in which others must lose to help them out.

                  • Dean says:

                    There haven’t been home loans that most Americans could handle for the past 10 years or so due to ballooning house values and high interest rates – until recently, of course.

                    The bottom line is that you live in the context of a consistently centralizing representation of wealth. That is to say, the working class has consistently experienced losses in net asset value and wealth. This is also a system which is based on confidence, speculative market activity and other capitalist financial institutions whose primary purpose is to accumulate wealth in the hands of those who have wealth to play the system.

                    And this is why we have the highest level of wealth disparity since the Great Depression. Like I said, screw frivolous notions about “honesty” (that’s been discarded decades ago in our finance sector) and “the poor banks.” We live in a completely predatory financial system and I’ll be damned if I’m going to shoot myself in the foot for the sake of “being honest” or “respecting bank property.”

                    I’ve never had those luxuries from them, and neither have you, so you may as well act toward your own self interests – lie on your taxes, manipulate your financial agreements, game the coupon system. We know for a fact that their gaming of the system against you will have a more compelling effect than your manipulations. So you may as well offset it.

            • peebozi says:


              and they did this 30 times for every dollar deposited.

          • Dean says:

            Morality should not be defined along the lines of frivolous principles like “honesty.” The material reality endemic to an increasingly stratified society (that is to say, The Real World) is a much more important consideration.

            The fact that you retards are more interested in childish notions like “honesty” and the rights of a banks whose purpose is to extract about 180% the value of a house from homeowners says really terrible things for the future of American society.

          • Loias supports harsher punishments against corporations says:

            I think you missed the distinction between morality and illegality that I was trying to make.

            Breaking the law = illegality.

            Doing something that benefited other people in a profound and positive way, while strengthing his business over the long term = morality.

            I never said his actions weren’t illegal. What I said was that had it been done openly, and legally, it would have benefited both his business and his customers. The same actions could have been done legally had he received approval from his superiors and shareholders.

      • Loias supports harsher punishments against corporations says:

        You misunderstand. If the bank had done this openly, it would not have been illegal. It also would have been “morally and financially right” as I stated.

        The legally wrong thing was that it was done under the table by falsifying documents. But the concept of what he was doing would probably help the bank.

      • mac-phisto says:

        this i really interesting, b/c there’s a very fine line between the two arguments. if this individual had a methodology that he used to modify the loans & that methodology was approved by senior management, then he should be right.

        however, i’m guessing you are closer to the truth. he noticed an increasingly bad situation of higher than normal delinquencies & took it upon himself to adjust the numbers willy-nilly. hence the fraud charge. it sounds like a nice thing to do, but when we consider the small guys on both sides of the equation (the homeowner & the shareholder), in the end this guy was really screwing them both.

      • coffeeculture says:

        Yeah this sounds like a reverse-Bernie-Madoff scheme going on, still illegal. I’d be pissed if were a stockholder and I bought based on an inflated (falsified) # of performing loans on the books.

      • RvLeshrac says:

        That’s right. Hang the bastard. What we need is more homeless people, clearly. I mean, I don’t trip over one every five feet yet.

      • Marshmelly says:

        “because he helped the small guy it’s “morally” right?” …yes?

  5. Oranges w/ Cheese says:

    Ah, at least he wasn’t taking it off the top for himself :(

    Sad that he’s such an optimist…

  6. Cicadymn says:

    Wait wait wait wait wait.

    Let me get this straight. A VP for a bank was caught in a scheme, but the outcome of this scheme wasn’t to make him, or his close personal minions money, but instead save the lives of a hundred people caught up in this “Summer of Recovery”?

    I just…

    • Rectilinear Propagation says:

      Huh. You know, I was expecting that image to be of the Grinch’s heart growing three sizes.

  7. clownsRcreepy says:

    We really need an asian sims-styled animated reenactment in order to understand what has happened here.

  8. barcodetattoo says:

    This guy is a true prince. Finally, someone in the financial sector with a heart.

    • Michaela says:

      Ouch. The sector isn’t as full as creeps as you seem to think. There shouldn’t be this “us vs. them” mentality. Workers in the financial section are people too.

      • brinks says:

        Yeah, but we never have the privilege of hearing about the ones who do good things.

      • Dean says:

        Actually, I agree with you here. It’s like the Manhattan project where (iirc) each scientist worked on their own individual problem, unknowing the whole scheme. It was a morally ambiguous situation, too.

        I’m considering going into finance. It’s one of the few growing industries, and ultimately, even nurses have their labor transfored into salable capital that goes into the same systems.

        The real enemies are
        -the whole system
        -the Bilderberg group (where Blair and Clinton were courted)
        -Privileged Saudis and other elites

        If you’re not among them, you’re middle class if you’re local government, managerial finance and the like, and lower/working class below that (roughly). You’re 100% that Us-Them mentalities are counter productive.

  9. Cantras says:

    So is he one of those guys who makes a hojillion dollars a year, or is he someone who’d appreciate donations to a legal/PR fund?

  10. kursk says:

    As a former banker, I must say I’m of 2 minds.
    1) He’s sure as hell guilty of financial fraud. His first responsibility is to exercise fiduciary responsibility with his banks money. He didn’t. Anyone hiring him from now on will always wonder if there is some rule of theirs that he doesn’t agree with will he break that law?
    2) He may go to jail but by God he’s got his soul back. Working in finance literally eats your soul away. It wasn’t until I quit after 15+ years and more VP titles than you can shake a stick at to teach math in inner city schools that I felt good as a person.

    • dragonfire81 says:

      I’m with you. The ends don’t justify the means. I respect the hell out of this guy for having the moral integrity to do what he did, but a crime is a crime,

    • peebozi says:

      His first and ONLY responsibility is to the bank’s shareholders…just like every other publicly traded company.

      morals and ethics have no place on wall street.

      the question s always asked on wall street….will the fine/bad PR/etc we could receive be more than the profits? if the answer is “no” then their fiduciary responsibility is to break the law and take the fine.

  11. Warren - aka The Piddler on the Roof says:

    Banks screw customers by committing fraud = taxpayer-funded bailout

    Bank VP tries to help customers by committing fraud = 30 years in prison + $1 million fine

    • aaron8301 says:

      That’s the best summary of this event. I must say, COTD.

    • Mike says:


    • Doubts42 says:

      so you are going with the 2 wrongs make a right argument?

      The answer here isn’t to let one criminal go. It is to punish both of them.

      • Warren - aka The Piddler on the Roof says:

        Uh, no. That wasn’t my point at all. My point is, when banks screw customers (through fraudulent activities) they get a bailout. When a bank VP tries to help customers (by committing fraud — not saying it’s right, but he’s not the only guilty party in the banking industry) he’s burned at the stake. Two sets of rules for two sets of people. “All men are created equal. But some are more equal than others.”

        I think this clearly proves who’s really in charge of the U.S., which is very, very sad indeed.

    • myCatCracksMeUp says:

      It’s very sad that you statement is so true.

    • Duke_Newcombe-Making children and adults as fat as pigs says:

      I’m pulling for…
      1. Request trial by jury
      2. Stack jury
      3. try hearstrings tactic/jury nullification
      4. not guilty verdict
      5. profits! (via book deal and inspirational speaking tour)

  12. sopmodm14 says:

    if that’s fraud, what do they call what those CEO’s plans ?

    i like how “…lose at least $5.5 million …” but if assets get repossessed, they flip houses/cars for a profit on someone else, or raise fees

    they became a “…$220.6 million-asset bank …” somehow…

  13. Buckus says:

    Well-intentioned, but not well-planned. Much like every Obama housing rescue plan.

  14. Nighthawke says:

    He should have let it go to trial. I seriously doubt any jury would allow such a stiff sentencing to happen. 15/500K maybe, but no 1 million.

    The Chicago DA copped out on the deal.

    • aaron8301 says:

      I agree. With most of the country wanting to hang bank execs for shafting homeowners, I think any jury would have let this guy walk for trying to help.

    • Fantoche_de_Chaussette says:

      95% of people charged with a crime strike a plea “deal” rather than take their chances with a jury, partly because prosecutors are experts at piling on so many charges that even a small chance of conviction is a hugely unacceptable risk.

      30 years for this is insane; you can murder someone and get less time.

      The USA’s “justice” system is by far the worst, the most unfairly barbaric, of any advanced democracy. But because it’s worst abuses are largely reserved for the poorer underclass, and the members of the upper classes can usually buy themselves fairer, more humane treatment (i.e. they can afford bail and a savvy lawyer), we mostly don’t care.

  15. Ichabod says:

    And wait he’ll do more time than anyone at Goldman…

    • Buckus says:

      I’d laugh except it’ll probably be true. And not one of those fancy-smhancy country-club prisons, he’ll be someone’s wife for sure…

    • NeverLetMeDown says:

      Well, he committed a crime, they didn’t.

      • Ichabod says:

        So you’re a lawyer who’s familiar with the case? So you just leaked information that was before now behind close doors?

        I thought not.

        • NeverLetMeDown says:

          OK, if you want to be pedantic about it, “he was convicted of committing a crime.” Which, in our system, means you did it.

          As for the Goldman folks, nobody’s been convicted, and nobody’s even been charged with a crime.

  16. slimeburg says:

    What he did is called “advancing due dates” and it is not generally done to protect borrowers from foreclosure – it is most often done to manipulate the banks delinquency rate – which is a big deal to regulators. He may have done it to help borrowers but typically this kind of thing is done to make it appear that the loan portfolio is performing better than it is – which may impact bonuses or hide poor underwriting. I have no idea what his intentions were, but I’m not sure I accept the whole selfless action theory.

  17. DerangedKitsune says:

    Please say this goes to jury trial. No way I could see him convicted over that.

  18. DallasM says:

    I have always believed that when you choose to do something, you must weigh the consequences of your actions. Even good deeds often have consequences. If the good deed is worth the consequences then do what your heart tells you to do, but be prepared to man up to your actions and your decisions. This banker is a prime example of this philosophy.

    I don’t know who you are, but I solute you all the same. Your personal sacrifice will help a lot of people.

  19. Abradax says:

    This is one of those situations where I’d like to see the judge doing the sentencing give him a fine of 1 dollar and a suspended sentence of 1 day in jail

  20. Mike says:

    When is lying wrong? When is it OK? I have to be honest, in this situation where banks bundled bad mortgages, gave them great credit ratings, then sold these mortgages off to the highest bidder all without doing anything illegal, I have trouble blaming this guy for doing anything wrong in comparison.

    Just because something is illegal on paper does not mean it is immoral. I hope he gets a slap on the wrist because honestly if more people in this world had a heart like his the world would be a better place.

  21. Sheogorath says:

    Of course, if he’d modified 100 loans to make it look like they were overdue he would’ve been promoted.

    • Major Annoyance says:

      This is a problem in a country which is supposedly founded on laws. We have reached a point where anything anyone decides to do is “right” as long as it’s legal. Screw ethics, morality, societal responsibility… if it’s legal, it’s right. Which in my humble opinion just means that there are too many thing that are illegal but shouldn’t be.

      That’s why the first words out of any corporate big shot’s mouth when he gets caught with blowing wads of cash into some Cayman Island or Leichenstein bank nobody ever heard of to hide it from the IRS is, “I didn’t do anything illegal!”, and not, “I didn’t do anything wrong”.

    • Doubts42 says:

      Didn’t read the article did you? When the housing market is in a slump/crash (like now), foreclosures cost banks money. not as much money as a full default, but it is still a loss.

      • peebozi says:

        define loss.

        if the bank had been receiving $1,000 monthly payments for 15 years (most of which is interest) then they have to sell the foreclosed house for $15,000 less than the principle that’s owed (seeing the house was bought in 1995 when market prices were more reasonable), would you consider that a loss or “not as big of a profit?”

        same thing when companies get sold off on wall street because they make 2% less PROFIT then they did a year earlier!

  22. ma1234 says:

    If you can’t afford your mortgage loans, you go into foreclosure. Sucks for them and good to see this jerk in jail.

  23. TheUncleBob says:

    Robin Hood stole from government officials who abused their power and mis-spent tax dollars and gave the money back to the tax payers.

  24. Poisson Process says:

    This guy will end up doing more time than predatory lenders. There is no justice here.

  25. barbcole says:

    His actions had nothing to do with helping homeowners — he (or his lawyer) have just chosen that as a “defense” to hope for better treatment.

    It was only about propping up his banks rapidly declining and failing capital/reserve ratios due to a rapidly declining loan portfolio.

    He didn’t make the loans appear current because he’s jolly Robbin Hood helping the common man, he did it to save himself and his bank from the vultures.

    • Michaela says:

      I am still wondering where he would’ve gotten the idea that the people would eventually pay back the loans. Hasn’t the increasing debt of citizens taught lenders anything?!

  26. MustWarnOthers says:

    If one group is un-punishable, I think the “two wrongs don’t make a right” phrase is a little biased in favor of the wall street criminals.

  27. Gtmac says:

    Hmmm, that guy looks familiar.

  28. banmojo says:

    I applaud this fellow for his spirit/intentions, even if what he did was technically illegal.I hope the judge takes into account his Christian spirit of forgiveness. And on a side note, this bank which was apparently floundering due to an abundance of defaulting loans should have to take SOME responsibility for saddling SO MANY customers with loans they ultimately could not keep up with. Didn’t the bank check the backgrounds of these people first? We know they did not, they acted in a greedy fashion, then expected the customers to pay for dinner. Bull Effing Shite I say, BS!@! (And I AM a fiscal conservative, btw, check my old posts. But in this day and age we ALL must shoulder the blame for the current state of economic affairs, and banks obviously need to take SOME responsibility for tying sheople up into poorly planned loans)

  29. sanjaysrik says:

    I always wonder the same thing abou these “fines” these people are levied, if they go to prison, and they make what .50c/hour working in a prison job and they spent all their money or the government took whatever these people had left, WHO pays this fine?

    I mean, if the guy was making $80k/year or even $100k, that would mean he’d have to have 10 years’ worth of gross salary lying around to pay this fine. So, how does it ever get paid?

  30. Wang_Chung_Tonight says:

    yes his couterpart who modified 1000 loans to default them when barely behind is still in practice!!!

    I see how this is tilted.

    “You gotta be a Spirit Bulworth!, don’t be no ghost!!”

  31. SmittShow says:

    yea that is a a real hero, I hope he doesnt get in to much trouble

  32. Kitteridge says:

    *pled guilty (or pleaded)