Wells Fargo Bank, N.A. Accused of Control Fraud through Stumpf and Other Corporate Insiders

Wells Fargo Bank, N.A. Accused of Control Fraud through Stumpf and Other Corporate Insiders

By Daniel Edstrom
DTC Systems, Inc.

October 19, 2016

The purpose of Sarbanes-Oxley legislation is to put in place financial controls in order to not only reduce fraud, but to identify risks so that the controls can be expanded or new controls put in place. Large companies such as Wells Fargo Bank have compliance departments and ethics lines where questionable conduct (unlawful or not) can be reported “safely” in order for the company to take action to stop and/or remediate the questionable conduct. This is done so that a business operates safely and soundly, and is the perfect source for implementing new controls, enhancing existing controls, testing the effectiveness of the controls, or at least disclosing material deficiencies that can be identified and corrected at a later date. Continue reading “Wells Fargo Bank, N.A. Accused of Control Fraud through Stumpf and Other Corporate Insiders”

Glaski vs Bank of America NA et al – FOR PUBLICATION

Glaski vs Bank of America NA et al – FOR PUBLICATION

Edstrom_MortgageSecuritization_POSTER_17_x_22_v4_1By Daniel Edstrom
DTC Systems, Inc.

On August 8, 2013 the Fifth Appellate District in the Court of Appeal of the State of California ordered the Thomas A. Glaski vs Bank of America, NA et al decision published, stating:



As the nonpublished opinion filed on July 31, 2013, in the above entitled matter hereby meets the standards for publication specified in the California Rules of Court, rule 8.1105(c), it is ordered that the opinion be certified for publication in the Official Reports.

Based on the importance of this case, the text of the July 31, 2013 ruling is listed verbatim:



THOMAS A. GLASKI,Plaintiff and Appellant,v.


Defendants and Respondents.


(Super. Ct. No. 09CECG03601)



APPEAL from a judgment of the Superior Court of Fresno County.  Alan M. Simpson, Judge.

Law Offices of Richard L. Antognini and Richard L. Antognini; Law Offices of Catarina M. Benitez and Catarina M. Benitez, for Plaintiff and Appellant.

AlvaradoSmith, Theodore E. Bacon, and Mikel A. Glavinovich, for Defendants and Respondents.



            Before Washington Mutual Bank, FA (WaMu) was seized by federal banking regulators in 2008, it made many residential real estate loans and used those loans as collateral for mortgage-backed securities.[1]  Many of the loans went into default, which led to nonjudicial foreclosure proceedings.  Some of the foreclosures generated lawsuits, which raised a wide variety of claims.  The allegations that the instant case shares with some of the other lawsuits are that (1) documents related to the foreclosure contained forged signatures of Deborah Brignac and (2) the foreclosing entity was not the true owner of the loan because its chain of ownership had been broken by a defective transfer of the loan to the securitized trust established for the mortgage-backed securities.  Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.

In this appeal, the borrower contends the trial court erred by sustaining defendants’ demurrer as to all of his causes of action attacking the nonjudicial foreclosure.  We conclude that, although the borrower’s allegations are somewhat confusing and may contain contradictions, he nonetheless has stated a wrongful foreclosure claim under the lenient standards applied to demurrers.  We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date.  Transfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement.

We therefore reverse the judgment of dismissal and remand for further proceedings.

Continue reading “Glaski vs Bank of America NA et al – FOR PUBLICATION”

Lenders Definition of Fraud

Lenders Definition of Fraud

By Daniel Edstrom
DTC Systems, Inc.

I was reviewing the closing documents for a loan when I came across this definition of fraud from Countrywide (now allegedly owned by Bank of America):


Fraud, Misrepresentations, Falsehoods

  1. A fraud or scheme related to the transaction has been or may be committed.
  2. Any party to the transaction, including but not limited to Lender, Borrower, Seller, Real Estate Broker or Agent, Builder, Mortgage Broker, Title Insurer, Appraiser, Signing Agent or Settlement Agent, or an employee of any such party, has made a material misstatement.
  3. A loan document or invoice has been tampered with, falsely generated, bears any incorrect or falsified data, bears different names or addresses for the same party, or bears a fictitious name.  A ficitious name does not include an assumed name field of public record.
  4. A party’s handwriting or signature is inconsistent on the loan documents.
  5. Borrower is being paid to lend credit or identity to the transaction.

Note also that Freddie Mac has the following definition of straw borrower:

A form of fraud where one person purchases property or takes out a mortgage for another to conceal the identity of the real borrower. Usually the real borrower would not qualify for the mortgage.

Does Freddie Mac or any other lender apply this same definition to straw lender?  I would define straw lender as:

A form of fraud where one entity acts as the payee of a note for another to conceal the identity of the real lender. Usually the real lender would not qualify as a mortgage lender.


County Recorder First in Nation to Step Forward and Reject Robo-Signed Documents

County Recorder First in Nation to Step Forward and Reject Robo-Signed Documents

By Daniel Edstrom
DTC Systems, Inc.

The news release from Massachusetts speaks for itself:  County Recorders Surprised to Find Acknowledgements Cannot be Relied Upon.

New release:


 Salem, MA

June 7th, 2011


Kevin Harvey, 1st Assistant Register


[email protected]

Jeff Thigpen, Register of Deeds


[email protected]

Massachusetts Register of Deeds John O’Brien is first in the nation to say no to recording robo-signed documents; North Carolina Register of Deeds, Jeff Thigpen agrees. Continue reading “County Recorder First in Nation to Step Forward and Reject Robo-Signed Documents”

L. Randall Wray does it again – Requiem For MERS

L. Randall Wray does it again – Requiem For MERS

By Daniel Edstrom
DTC Systems, Inc.

L. Randall Wray, Professor of Economics and Research Director for the Center for Full Employment and Price Stability, University of Missouri-Kansas City posted an article on the Huffington Post (http://www.huffingtonpost.com) that I somehow missed.  The MERS design was woven in fraud.  Professor Wray points out the two main issues with MERS.  The first is that most foreclosures are illegal because those doing the foreclosing do not have legal standing.  Second the practices that create the foreclosure problems also mean that the mortgage backed securities are actually unsecured debt.  Professor Wray says that this means the banks must take them back, so they are toast.  He also states that it all comes back to MERS business model: it destroyed the chain of title.

Continue reading “L. Randall Wray does it again – Requiem For MERS”



By Anita Carr

Anita Carr is used to discovering fraudulent activities, even when she is not employed.  In 2001 she discovered accounting irregularities at a Fortune 500 where she was a Director in Information Technology.  This led to investor lawsuits against that company for accounting fraud and insider trading.  At a prior employer she contacted the FBI and worked with them to ensure they investigated Medicare Fraud.  The CFO of that company went to prison.

Now, in fighting to determine title on her home, she has discovered something even more slimy and with much broader implications.  In an attempt to validate a ‘squiggle’ type mark on a recorded document with the Alameda County Recorder’s office, Ms. Carr felt it imperative that she obtain a copy of the page from the notarial journal from the California notary who performed the notarization of the ‘Corporation Deed of Assignment’ related to her property.

Ms. Carr, under California laws, is entitled to purchase a copy of the page in the notarial journal related to her property and so she wrote to the Orange County Recorder’s office and sent a check to cover the copy fees.  Orange County is where the notary was registered.  Within weeks she received a certified letter back from the Orange County recorder stating that they should have the notarial journal, but they did not have it.  See, once a notary is no longer a notary in California, it is the law that they must turn in their notarial journal to the county recorder.


Financial Control Fraud

Financial Control Fraud

By Jim Macklin
Secure Document Research

When a person or persons who own or oversee the operations of a seemingly legitimate business or Governmental Agency uses that business or agency as a “weapon”, it is known as a control fraud. The term was coined by UMKC Professor William Black (The Best Way To Rob A Bank Is To Own One, Black, 2005). The “weapon of choice” in a financial control fraud is accounting. More losses occur in financial control frauds than any other form of property crimes …combined!

In the early stages of our most recent financial crisis, the FBI had correctly identified the presence of the type of fraud, yet, the Bush administration failed to effect any real consequences, and so the fraud was swept under the rugs of the administrations’ offices. De-regulation and the advent of hyper-bonuses helped to encourage the practices of the ratings agencies, hedge fund managers, and CEO’s of the Wall Street elite, while the AAA rated “junk bonds” went out for sale with a frenzied push for more paper. Never before, in the history of Wall Street, had a AAA rated bond gone into a default. Remember, these ratings agencies hadn’t even bothered to sample the veracity or viability of the loan files upon which these ratings were issued. This is a control fraud in its’ simplest and purest form, with all of the key players indemnified against losses through trust agreements. This is the smoking gun.

Continue reading “Financial Control Fraud”

Split: The Note and the Deed of Trust (Redux)

The Note and Mortgage are split in judicial states the same as the Note and Deed of Trust in non-judicial states.

Split: The Note and the Deed of Trust (Redux)

by Daniel Edstrom

The Note and Mortgage are split in judicial states the same as the Note and Deed of Trust in non-judicial states.

The first issue is that the note was sold in 2005 but the Deed of Trust appears to have been left behind.  For the uninitiated, if the Note and Deed of Trust are split, this causes a nullity.  A nullity means the security interest is lost and the debt becomes unsecured.  In securitization this is standard operating procedure and is one of the issues that we are left to face.  Upwards of 60,000,000 homes may be unencumbered leaving those who own the notes on these houses with no power of sale.  And more considering MERS wasn’t the only party involved in splitting the note from the security instrument.

Who owns these loans if they are unsecured?  That was the whole purpose of creating the securitization diagram in the first place.

The result?  More questions, few answers. Continue reading “Split: The Note and the Deed of Trust (Redux)”