WEISS vs BANK OF AMERICA | PA: Homeowners file RICO class action against Bank of America
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF PENNSYLVANIA
WILLIAM WEISS and ROBERT LESSMAN, and ANN HARRELL and EDDIE HARRELL, individually and on behalf of all others similarly situated, Plaintiffs, v. BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., and BANK OF AMERICA REINSURANCE CORPORATION, Defendants.INTRODUCTION
1. Defendants Bank of America Corporation (“BAC”), Bank of America, N.A, (“BoA N.A.”), and their affiliated reinsurer, Bank of America Reinsurance Corporation (“BoA RE”) (collectively, “Bank of America”), have engaged in a pattern of racketeering activity in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by effectuating a captive reinsurance scheme which defrauded Plaintiffs William Weiss, Robert Lessman, Ann Harrell and Eddie Harrell (collectively, “Plaintiffs”) and the Class (defined below) and compelled them to fund illegal kickbacks and referral payments in the form of purported reinsurance premiums that were paid by United Guaranty Residential Insurance Company, Triad Guaranty Insurance Corporation, Republic Mortgage Insurance Company, Mortgage Guaranty Insurance Corporation, Radian Guaranty Inc., Genworth Mortgage Insurance Corporation, and PMI Mortgage Insurance Company (collectively, the “Private Mortgage Insurers”) to BoA RE. 2. This is a proposed nationwide action brought by Plaintiffs on behalf of themselves and a class of all other similarly situated persons who obtained residential mortgage loans originated, funded and/or originated through correspondent lending by BAC and/or BoA N.A. and their mortgage lending subsidiaries and/or affiliates between January 1, 2004, and the present (the “Class Period”) and, in connection therewith, purchased private mortgage insurance and whose residential mortgage loans were included within Bank of America’s captive mortgage reinsurance arrangements (hereinafter, the “Class”). 3. Captive reinsurance schemes, such as the scheme involving Defendants described herein, have been widespread throughout the mortgage lending industry. As American Banker magazine reported in connection with an investigation by the Inspector General of the Department of Housing and Urban Development (“HUD”), “beginning in the late 1990s major U.S. banks began coercing [private mortgage] insurers into cutting them in on what would ultimately amount to $6 billion of insurance premiums in exchange for assuming little or no risk.” See Jeff Horwitz, Bank Mortgage Kickback Scheme Thrived Amid Regulatory Inaction, American Banker (Sept. 16, 2011, 7:45 PM), http://www.americanbanker.com/issues/176_181/mortgages-reinsurance-deals-kickbacks- HUD-1042277-1.html, attached as Exhibit 1 (hereinafter referred to as “Mortgage Kickback Scheme”); see also Jeff Horwitz, Banks Took $6B in Reinsurance Kickbacks, Investigators Say, American Banker (Sept. 6, 2011, 4:55 PM), http://www.americanbanker.com/issues/176_173/mortgage-reinsurance-respa-kickbacks-hudinvestigation-doj-1041928-1.html, attached as Exhibit 2 (hereinafter referred to as “Reinsurance Kickbacks”). [...]