A former Chase Bank loss mitigation specialist faces up to 95 years in prison after being convicted of alerting a borrower — who’d fallen behind on payments on seven properties — of a possible criminal mortgage fraud investigation.
Frank E. Mendoza, 45, of Victorville, Calif., allegedly demanded a $25,000 bribe from the borrower, who contacted the FBI.
A jury determined that Mendoza agreed to accept $10,000 in cash, and that the the borrower made two payments of $5,000 to him. Mendoza was arrested after making the second payment on June 29, 2009.
Prosecutors said that as part of his work duties, Mendoza had been conducting an investigation of the delinquent borrower on loans made on seven properties in Palmdale, Calif.
Mendoza reported to Chase that he suspected the mortgages were obtained fraudulently, and in November 2008 Chase filed a Suspicious Activity Report with the Financial Crimes Enforcement Network (FinCEN).
Several months later, prosecutors said, Mendoza approached the borrower and suggested that he pay $25,000 in exchange for Mendoza’s assistance with Chase and a possible federal criminal investigation.
Mendoza allegedly disclosed that the SAR had been filed and that a federal criminal investigation of the borrower was imminent.
He was convicted Monday after a one-week jury trial of three counts of bank bribery and one count of unlawfully disclosing a SAR. The jury found Mendoza not guilty of attempted economic extortion. He is scheduled to be sentenced May 25.
FinCEN is a bureau within the Treasury Department that requires all banks to report suspicious transactions and large currency transactions. FinCEN receives approximately 1 million SARs every year.
Lenders and regulators filed 35,135 SARs related to mortgage fraud in the first half of 2010, up 7 percent from a year before. Some 78 percent of SARs reported in the first quarter of 2010 were related to activity that occurred more than two years ago, FinCEN said.
