Lisa In The News

Illinois accuses Nationwide Title Clearing of robosigning

Eric — Thu, 02 Feb 2012 15:16:27 -0500

Chicago Tribune, February 2, 2012

The attorney general in Illinois on Thursday sued a mortgage document firm and said it filed "faulty" documents with local governments in a rush to process mortgages and foreclosures.

Nationwide Title Clearing Inc was a "key contributor" to the mortgage crisis by "undermining the integrity and accuracy of the mortgage servicing and foreclosure process," Attorney General Lisa Madigan said in a statement.

The Palm Harbor, Florida-based firm prepares documents for mortgage servicers to use against borrowers who are in default or foreclosure.

A spokeswoman for Nationwide Title said the firm had not yet seen the lawsuit.

The lawsuit comes as Illinois and other states are close to signing an agreement with five top U.S. banks to resolve allegations of mortgage servicing and foreclosure abuses.

Those negotiations began more than one year ago, after reports emerged that workers had "robo-signed," or signed without reading, thousands of pages of mortgage documents, which in some cases led to unlawful foreclosures.

That multistate settlement does not include contractors used by the banks in some of the questionable practices.

Nationwide Title works for eight of the 10 largest lenders and mortgage servicers, according to the lawsuit.

Its employees often signed documents as "vice president" of other companies, even though they were Nationwide Title workers, the lawsuit said.

Crystal Moore, for example, signed documents as a vice president of Citi Residential Lending Inc, even though she was an employee of National Title.

The employees sign a few thousand documents each day, and do not read and verify the documents they sign, according to the lawsuit.

The documents often include statements that the signatory has personal knowledge of the facts in the document, the lawsuit said.

The company is a "document production factory," Madigan said in the lawsuit.

The lawsuit, filed in Cook County Circuit Court, accuses the firm of violating the Illinois Consumer Fraud and Deceptive Practices Act and the Uniform Deceptive Trade Practices Act.

Through the lawsuit Madigan asked the court to require the firm to review and fix documents it unlawfully created and recorded, and pay back revenue and profit it gained through the practices.

The suit also seeks civil penalties of up to $50,000 per violation.

Madigan has stepped up her state's efforts to punish companies for what she views as their role in the 2007-2009 financial crisis.

She sued Standard & Poor's last week, for example, and said it fueled the nation's housing and financial crises by assigning inflated credit ratings to risky mortgage-backed securities.

Madigan also appeared with Attorney General Eric Holder and other top U.S. officials in Washington last week to announce a new federal-state working group that would investigate misconduct in the packaging and sale of home loans to investors.

Madigan offers business tips to protect consumer information

Eric — Mon, 30 Jan 2012 11:47:38 -0500

Woodford Times, January 30, 2012

Attorney General Lisa Madigan today released a 2012 guide for Illinois businesses to better protect consumers’ personal information and help prevent identity theft.

“Illinoisans are vulnerable to identity theft and fraud when security breaches occur,” Madigan said. That’s why businesses that collect personal information have an obligation to comply with Illinois law to avoid breaches and take action to inform consumers when breaches occur. Today, I’m providing guidance to Illinois businesses and government agencies on how to prevent, prepare for and respond to security breaches appropriately.”

More than 550 breaches involving more than 30 million records occurred in 2011, according to the Privacy Rights Clearinghouse. Many of the breaches involved sophisticated computer hackers who accessed networks through highly technical means. While protecting against network intrusions and hacking is important, Madigan said businesses and government agencies should also focus efforts to protect against low-tech breaches. When documents containing personal information are discarded in public, identity thieves have easy access to the information they need to commit fraud.

In releasing her Information Security & Security Breach Response Guide, Madigan encouraged businesses and government agencies to establish an Information Security Program to understand the scope of the personal information they collect and to train employees how to properly maintain and handle information to prevent security breaches, which in turn can help prevent identity theft. The guide can be found on the Attorney General’s website at: http://www.illinoisattorneygeneral.gov/consumers/Security_Breach_Notification_Guidance.pdf

Madigan also noted that a new state law aims to reduce the threat of low-tech identity theft. As of Jan. 1, the Illinois Personal Information Protection Act requires entities to dispose of materials containing personal information in a manner that renders the information unreadable, unusable and indecipherable. This includes redacting, burning, pulverizing or shredding paper documents, and destroying or erasing electronic media so that personal information cannot be read or reconstructed.

While entities that suffer security breaches have been obligated under Illinois law to notify affected individuals since 2006, the law now requires specific information to be included in the breach notification letter. Under the recent amendments to the Personal Information Protection Act, the notification must now include:

Toll-free numbers and addresses for consumer reporting agencies,
Toll-free number, address and website for the Federal Trade Commission, and
Statement that the individual can obtain information from these sources about fraud alerts and security freezes.
By developing a comprehensive data security policy, businesses will be better suited to respond to the discovery of a security breach. Madigan encouraged businesses and consumers to contact her office’s Identity Theft Hotline at 1-866-999-5630 to learn how to better protect personal information.

Data Privacy Day aims to unite businesses, individuals, government agencies, nonprofit groups and academics in a dialogue about how personal data should be collected, used and stored.

Attorney General Lisa Madigan today released a 2012 guide for Illinois businesses to better protect consumers’ personal information and help prevent identity theft.

“Illinoisans are vulnerable to identity theft and fraud when security breaches occur,” Madigan said. That’s why businesses that collect personal information have an obligation to comply with Illinois law to avoid breaches and take action to inform consumers when breaches occur. Today, I’m providing guidance to Illinois businesses and government agencies on how to prevent, prepare for and respond to security breaches appropriately.”

More than 550 breaches involving more than 30 million records occurred in 2011, according to the Privacy Rights Clearinghouse. Many of the breaches involved sophisticated computer hackers who accessed networks through highly technical means. While protecting against network intrusions and hacking is important, Madigan said businesses and government agencies should also focus efforts to protect against low-tech breaches. When documents containing personal information are discarded in public, identity thieves have easy access to the information they need to commit fraud.

In releasing her Information Security & Security Breach Response Guide, Madigan encouraged businesses and government agencies to establish an Information Security Program to understand the scope of the personal information they collect and to train employees how to properly maintain and handle information to prevent security breaches, which in turn can help prevent identity theft. The guide can be found on the Attorney General’s website at: http://www.illinoisattorneygeneral.gov/consumers/Security_Breach_Notification_Guidance.pdf

Madigan also noted that a new state law aims to reduce the threat of low-tech identity theft. As of Jan. 1, the Illinois Personal Information Protection Act requires entities to dispose of materials containing personal information in a manner that renders the information unreadable, unusable and indecipherable. This includes redacting, burning, pulverizing or shredding paper documents, and destroying or erasing electronic media so that personal information cannot be read or reconstructed.

While entities that suffer security breaches have been obligated under Illinois law to notify affected individuals since 2006, the law now requires specific information to be included in the breach notification letter. Under the recent amendments to the Personal Information Protection Act, the notification must now include:

Toll-free numbers and addresses for consumer reporting agencies,
Toll-free number, address and website for the Federal Trade Commission, and
Statement that the individual can obtain information from these sources about fraud alerts and security freezes.
By developing a comprehensive data security policy, businesses will be better suited to respond to the discovery of a security breach. Madigan encouraged businesses and consumers to contact her office’s Identity Theft Hotline at 1-866-999-5630 to learn how to better protect personal information.

Data Privacy Day aims to unite businesses, individuals, government agencies, nonprofit groups and academics in a dialogue about how personal data should be collected, used and stored.

State investigation: ComEd should pay for outages

Eric — Mon, 30 Jan 2012 11:36:00 -0500

Chicago Tribune, January 28, 2012

Prolonged outages that at one point left more than 800,000 people in Northern Illinois without power during last summer's storms were not unpreventable acts of God, but were caused by years of neglect of equipment and lack of tree-trimming by ComEd, according to a report from the Illinois Attorney General's office.

If the Illinois Commerce Commission agrees with the AG's findings the utility could be required to pay claims to people who lost refrigerated food and suffered other damages because of outages.

The Tribune reported in October that the ICC has never held ComEd liable for damages in extreme outages -- defined as those that leave more than 30,000 customers without power for at least four hours and could have been prevented.

ComEd, a unit of Chicago-based Exelon Corp., has maintained that storm-related outages cannot be prevented because they are caused by nature.

In a statement, ComEd said: "Last summer's wave of storms were among the worst in decades and we understand the frustration that 2.5 million outages can cause for the customers who experienced them. We also understand that even though ComEd's system reliability and outage restoration performance compares favorably on a national basis, our customers are seeking a stronger response." The utility also said it was looking to add technology to improve its service.

The attorney general's report, filed Thursday with the ICC, shows that it investigated ComEd's infrastructure in 12 towns and uncovered decrepit utility poles, equipment choked by vegetation and dangerous conditions related to transformers that haven't been replaced since the 1950s, carrying loads far beyond their designed capacity and outdated technology that aids in the spread of outages and makes them more difficult to repair.

"The singular root cause for the very large number and very long duration of outages experienced by ComEd's customers is clear and evident neglect of its distribution facilities over the past 20 years," the AG's office said in testimony included in its report.

The ICC staff also filed testimony Thursday calling ComEd's interpretation of state law "untenable" because the threshold for requiring payment would in all likelihood never be met. The law states that 30,000 customers must be without power for four hours or more to trigger compensation, but as ComEd sees it, outages that start and stop at different times and affect multiple pieces of equipment (or circuits) cannot be aggregated to reach that number.

"No single outage on an individual primary voltage distribution circuits could result in an interruption of service to more than 30,000 customers because none of these distribution circuits supply that many customers," staff testified.

The AG's office based its findings on a three-day investigation this December of ComEd's infrastructure in suburbs that were hard hit by outages in this summer's storms: Elmhurst, Evanston, Highland Park, Lake Forest, Park Ridge, Rockford, Rolling Meadows and the villages of Arlington Heights, Glenview, Morton Grove, Niles and Schaumburg.

"The AG's office embarked on this investigation in response to ComEd's waiver request and in response to the public outcry that arose following the storm outages. -- including at hearings and forums held throughout the service area," said Robyn Ziegler, spokeswoman for the AG's office.

Rather than being caused by "unpreventable damage due to weather," many of ComEd's outages could have been prevented with more consistent tree trimming, the AG's office argued. ComEd's stated policy is that trees should clear lines by at least 10 feet, but many electrical lines in alleyways and behind residences "revealed years of vegetation management neglect," the report states.

"Had ComEd maintained a sufficient tree-trimming program in these areas, many of the outages would have been avoided or shortened," the report concludes.

In Lake Forest, Carina Walters, assistant city manager, reported that while ComEd has said trees are trimmed on a five-year cycle, at least one residence had a tree that would consistently sway into a power line and spark.

A number of homeowners, she said, lost hundreds of dollars of food more than once after suffering three long outages during the summer but were told by ComEd that they would not be reimbursed because the storms were an act of nature.

ComEd has said in testimony in the case -- in which they are seeking a waiver of liability for outages that occurred during six separate storms that occurred in June and July of 2011 -- that its entire distribution system conformed to national standards when the storms occurred.

The utility has said the outages did not result from poor maintenance.

The AG's office calls that statement "blatantly untrue."

Besides overgrown vegetation, inspectors alleged to have found:

-- Over loaded distribution poles in violation of national requirements.

-- Aging poles -- a quarter of which are 50 to 60 years old -- leaving them open to cracking, splitting and rot.

-- Overheating transformers that haven't been replaced since the 1950s, carrying loads far beyond their designed capacity.

-- Outdated technology that aids in the spread of outages and makes them more difficult to repair.

-- Underground cables forced to perform years beyond their life expectancy.

-- That the absence of smart meter technology had no impact on the number and duration of outages

Taking the middle ground, ICC staff testified Thursday that ComEd should be waived of liability for some outages -- those directly caused by lightning strikes or uprooted trees.

The outages were so bad in Highland Park, Mayor Nancy Rotering testified, that they had to set up Dumpsters at the city's expense all over town so that people could get rid of their spoiled food.

For the July 11, Highland Park estimated it directly spent more than $57,000 dealing with the outages. At the same, Rotering said, there was the cost of students missing school, businesses closing, public health and public safety issues "all caused by ComEd's poor response to the storms."

Adding together all customers who experienced interruptions during any single four-hour period, the ICC determined that all six of the summer storms caused prolonged outages for more than 30,000 customers for a four-hour period. After eliminated outages caused by lightning and uprooted trees, staff determined that three storms still created preventable power outages for at least 30,000 customers for four hours or more. If the ICC agrees, it would open ComEd to claims from more than 550,000 customers.

That interpretation of the law would also open ComEd up to claims from cities and towns that paid thousands of dollars in overtime to police, firefighters and other personnel because of prolonged outages.

Fred Vogt, director of public works for the City of Rolling Meadows, testified to the ICC that the trees contacting electrical lines have caused outages for days at a time. During the July 11 storm, he said, city offices fielded hundreds of calls and a 911 call center received more than 1,000 calls related to the outages.

"We estimate that the storms cost the city thousands of dollars in overtime costs and lost productivity during outages to public buildings. It is difficult to estimate effects on businesses and residents," he said.

He said he disagreed with ComEd's interpretation that an outage is defined by its start and stop time and it place of origin, not by adding together affected customers.

"Regardless of whether the outages are caused by one or several sources," he said, "when so many people are out of service at the same time and outage times drag into days, customers and municipalities suffer losses that should be compensated."

ComEd has two weeks to respond to the report. There is no deadline set for the ICC to decide on the waiver application.

Lisa Madigan sues S&P for role in housing market meltdown

Eric — Wed, 25 Jan 2012 15:42:27 -0500

Chicago Sun-Times, January 25, 2012

Illinois Attorney General Lisa Madigan has filed a lawsuit against Standard & Poor’s claiming the credit ratings agency fraudulently gave high ratings to risky mortgage-backed investments in the years prior to the 2008 housing market crash.

The suit, filed Wednesday in Cook County Circuit Court, alleged that S&P “compromised its independence” by giving its highest ratings to “unworthy, risky investments as a corporate strategy to increase its revenue and market share,” the Attorney General’s office said Wednesday in a written announcement of the suit.

The suit alleges S&P “ignored the increasing risks posed by mortgage-backed securities” and instead assigned investment pools ratings that favorable to its client base and its own profits, the statement said.

“Publicly, S&P took every opportunity to proclaim their analyses and ratings as independent, objective and free from its desire for revenue,” Madigan said. “Yet privately, S&P abandoned its principles and instead used every trick possible to give deals high ratings in order to retain clients and generate revenue. The mortgage-backed securities that helped our market soar — and ultimately crash — could not have been purchased by most investors without S&P’s seal of approval.”

The suit cites emails and conversations among S&P employees before the housing crash which Madigan claims demonstrate the company misrepresented its ratings as objective and independent. In an April 2007 exchange via instant message, workers discussing S&P ratings compared to the actual risk involved, said investments “could be structured by cows and we would rate it.”

Investors relied on S&P ratings “because they were historically rooted in the agency’s purported independence and objectivity,” Madigan’s statement said. S&P’s internal code of conduct states its goal is to “promote investor protection by safeguarding the integrity of the rating process.”

The lawsuit, however, quotes testimony to Congress by a former S&P managing director who said “profits were running the show” and said ratings were given to risky investments “to help drive profit margins for clients,” the statement said.

Madigan said in the run-up to the financial crisis, S&P consistently misrepresented the risk of mortgage-backed securities, assigning these securities its highest seal of approval — a AAA rating. This spurred investors to purchase securities that were far riskier than the ratings revealed.

It was the misrepresentation of the true value of risky mortgage pools that helped the housing market skyrocket and ultimately led to its collapse in 2008, according to Madigan.

This is not the first time Madigan has gone after financial misconduct.

She sued lender Countrywide, leading to in a nationwide $8.7 billion settlement over predatory lending practices in 2008. She also reached a $39.5 million settlement with Wells Fargo over what she called the deceptive marketing of “extremely risky loans” called Pay Option ARMs. In 2006, Illinois received $10 million as part of a $325 billion multi-state settlement with Ameriquest over “deceptive sales of predatory subprime mortgages,” the release said.

Spokesman for Standard & Poor’s did not immediately respond to a request for comment.

Madigan suing Westwood College

Eric — Thu, 19 Jan 2012 13:02:02 -0500

ABC Chicago, January 18, 2012

Illinois Attorney General Lisa Madigan has filed a lawsuit against Westwood College, accusing the for-profit school of deceptive marketing.

Madigan says Westwood College degrees have failed to qualify graduates for careers in the field of criminal justice. She claims Westwood graduates are also left with thousands of dollars in debt from classes that fail to prepare them for careers.

Madigan says a Westwood College diploma is not likely to get graduates jobs with state or local police departments. She accuses Westwood of lying to students about its accreditation status.

Todd Brown's goal was to become an Illinois State Trooper. He was counting on his degree from Westwood College to get him there. The 24-year-old Bolingbrook resident was well into the interview process when his dream was cut short.

"You got your foot in the door, and two weeks later they call, say you can't have the job because your school is not regionally accredited," Brown said.

Brown is now left with a worthless degree and over $50,000 in school loans to pay back, Brown said, and he is not alone.

Westwood graduates joined Illinois Attorney General Lisa Madigan as she announced a lawsuit against the for-profit Westwood College. Illinois is home to four campuses.

Madigan accuses Westwood of using deceptive practices and advertising when marketing its criminal justice program.

"Westwood consistently misrepresented its accreditation status, which barred many students from pursing careers in law enforcement," said Madigan.

Westwood is nationally accredited, but not regionally.

The Denver-based Westwood College says it is cooperating with the Illinois attorney general's office. In a written statement, Westwood College spokesperson Emily Port said, "We have hundreds of successful graduates working in the private and public criminal justice field throughout the State of Illinois."

But none of the Illinois residents interviewed by ABC 7 have a job in the field they were promised by Westwood recruiters.

Single mother of four Annette Arkema went back to school in her 40s with the goal of a career as a victims advocate. She now works at Sam's Club.

"I wanted to teach my children, no matter how old you are, education is important," said Arkema, a Westwood graduate.

Madigan's goal with the lawsuit is to shut Westwood's Illinois campuses down and force the college to return students their money.

Madigan says, according the federal government, a degree from a for-profit college costs five times more than a community college.

Madigan says federal student loans account for close to 90 percent of for profit college revenues.

Illinois attorney general's office plans to sue Westwood College

Eric — Wed, 18 Jan 2012 09:15:00 -0500

Chicago Tribune, January 18, 2012

The Illinois attorney general's office is lashing out at Westwood College, which has four Chicago-area campuses, claiming the institution misleads students enrolled in its criminal justice program, putting them deep in debt and saddling them with a nearly worthless degree for pursuing careers in Illinois law enforcement.

Westwood, a career college owned by Alta College of Denver, is the latest for-profit school to come under scrutiny by regulators and consumer advocates, who claim some for-profit schools overpromise and underdeliver.

Among the complaints are poor job-placement rates, high-pressure sales tactics, low graduation rates, excessive profit margins and the burdening of students with crushing debt, often from taxpayer-backed loans on which students default. Schaumburg-basedCareer Education Corp., for example, is dealing with fallout from a scandal in which some of its schools misrepresented job-placement rates of its graduates.

Westwood has run afoul of regulators in several states, including Texas and Wisconsin.

Illinois is home to four of Westwood's 17 campuses. They are located in Chicago's Loop, nearO'Hare International Airport, Woodridge and Calumet City.

The office of Attorney General Lisa Madigan has been investigating Westwood and plans to file suit against the college Wednesday, sources said. A draft of the suit, obtained by the Tribune, claims students who want to be police officers in Illinois need a degree from a school that is "regionally" accredited. Westwood is not, although it is nationally accredited.

"Many Illinois students who tried to better themselves through a criminal justice education at Westwood now find themselves saddled with more than $50,000 in student loans, and no way to pursue a law enforcement job because their Westwood education was not regionally accredited and therefore was not recognized by other regionally accredited colleges or law enforcement employers, such as the Chicago Police Department, the Illinois State Police and many suburban police departments," the attorney general's office said in the draft of the lawsuit.

The draft suit says that Westwood, through its marketing, "made a variety of misrepresentations and false promises."

A Westwood spokesman issued a statement, saying, "We continue to cooperate with the Illinois (attorney general) to resolve any outstanding issues. We are proud of our legacy of helping students obtain their educational goals. We have hundreds of graduates working in the private and public criminal justice field throughout the state of Illinois."

The company also provided a Westwood College disclosure form that requires students to initial the following statement: "Westwood College is nationally accredited, not regionally accredited, which could have an impact on employment opportunities with some Chicago and surrounding area employers, including the City of Chicago."

Fifteen consumers filed complaints against Westwood with Madigan's office, the draft lawsuit states.

The attorney general's office also objects to the cost of a Westwood degree. Tuition to complete a degree in criminal justice totals $71,610, compared with $12,672 from the College of DuPage, which is regionally accredited and is located less than 10 miles from Westwood's DuPage campus, the suit says. It claims Westwood misled students "about the magnitude of the financial burden associated with obtaining their degrees, engaging in a pattern and practice of downplaying the burdens of student loans they advised students to take out."

The suit asks for, among other things, that all contracts between Westwood and Illinois consumers be rescinded and "that full restitution be made." It also seeks to revoke, forfeit or suspend Westwood's criminal justice program and assess a civil penalty of $50,000 per violation of the state's Consumer Fraud Act.

Westwood said it has more than 13,000 students enrolled in its degree programs, which include business, design, technology, industrial services, justice and health care.

Synthetic marijuana seized in Vermilion

Eric — Tue, 17 Jan 2012 13:22:16 -0500

The News-Gazette, January 16, 2012

SPRINGFIELD — Authorities seized almost 2,000 packages of synthetic marijuana from stores throughout the state, including four in Vermilion County, in three undercover operations conducted last month by the Illinois attorney general's office and local law enforcement agencies.

Attorney General Lisa Madigan's office on Friday detailed the undercover operations, dubbed "Operation Smoke Out," with law enforcement officials and prosecutors at a series of presentations on the state's work to address the rising number of young people using synthetic drugs.

The chemically-laced substances are akin to marijuana and cocaine and can be found for sale at convenience stores, gas stations and tobacco shops across the state. They are responsible for a number of injuries and deaths in Illinois and across the United States.

"We are only at the beginning of this battle to protect young people from these deadly products," Madigan said. "In order to ensure a strong, effective response to these drugs, law enforcement officials are prosecutors in every county of Illinois need to be empowered with information and other resources to fight this emerging epidemic."

Partnering with Vermilion County Sheriff Pat Hartshorn, Adams County Sheriff Brent Fischer and Bond County Sheriff Jeff Brown, investigators from Madigan's office conducted store "sweeps" in the three counties in late December to determine if retailers were selling the banned products. Test results from the Illinois State Police crime lab showed the presence of Schedule 1 substances or their analogs in the purchased products, which prompted 1,956 packages with a street value of $41,620 to be confiscated, according to Madigan's office.

Investigators confiscated the following number of packages at the following stores in Vermilion County:

— 378 from BP Gas, 901 Vermilion St., Danville.

— 17 from BP Gas, 101 N. Gilbert St., Danville.

— 491 from DP Pit Stop, 445 Vermilion St., Danville.

— 108 from the Hoopeston Convenient Mart, 714 Orange St., Hoopeston.

Investigators also confiscated 534 packages containing synthetic cannabis from a store in Quincy in Adams County and 428 from two stores in Pocahontas in Bond County.

According to Madigan, synthetic drug abuse is on the rise, and poison control centers across the United States have noted a dramatic rise in calls about synthetic marijuana and "bath salts," another type of synthetic drug containing chemical compounds mimicking the effects of cocaine or methamphetamine.

In 2011, she said, poison control centers nationwide received 6,890 calls related to synthetic marijuana use, up from 2,915 calls in 2010. In 2011, they received 6,072 calls about bath salts, up from 303 calls the previous year.

While Illinois and other states passed laws banning specific formulas of synthetic marijuana and bath salts, Madigan said that drug manufacturers attempted to sidestep the laws by replacing the banned chemicals with other ones and stated on their packaging that their products do not contain the banned ingredients.

Madigan said those drugs are extremely dangerous because users don't know what chemicals they are consuming. She also said that individual products can contain a wide range of chemical formulations and potencies, some of which can be two to 500 times stronger than THC, the principal psychoactive component of cannabis.

A new law that took effect Jan. 1 makes it a felony to have products containing chemicals that are structural derivatives of the previously-banned chemicals, Madigan said. She added her office is working with law enforcement to educate retailers about the products and that they are likely to contain the banned substances.

Madigan: 2011 Consumer complaints show debt collectors Using Illegal, Abusive Tactics

Eric — Wed, 11 Jan 2012 14:56:40 -0500

Decatur Tribune, January 11, 2012

Attorney General Lisa Madigan today released her list of the top 10 consumer complaints for 2011, revealing that consumer debt was the upmost concern among Illinoisans.

For the fourth consecutive year, consumer debt complaints in 2011 ranked No. 1 on the Attorney General’s annual top 10 list of complaints. Of the nearly 5,900 debt-related complaints, more than 1,100 were filed against debt collectors who illegally threatened and harassed consumers. Madigan said the complaints and calls to her office demonstrate the extent to which consumers are struggling to pay off debt and are being targeted by abusive, aggressive debt collectors. Abusive debt collection is a growing problem nationally, Madigan noted, with the Federal Trade Commission reporting in 2010 its top complaint was abusive debt-collection practices.

As part of today’s announcement, the Attorney General took action against a Skokie-based debt collector, PN Financial Inc., filing suit in Cook County Circuit Court. Madigan said PN Financial emerged last year as one of the most egregious cases of illegal debt collection during her tenure as Attorney General.

“As this difficult economy persists, honest, hard-working families are increasingly targets for debt collectors that operate outside the law,” Madigan said. “Though consumers may be struggling under the weight of debt, they still have the right to be protected against illegal harassment and fraud.”

Madigan’s lawsuit against PN Financial and owner, Nelson Macwan, of Skokie, alleges numerous violations of state and federal laws that protect Illinois consumers from off-limits debt collection tactics. Madigan alleged PN Financial acted illegally by:

· Revealing information about debts to people other than the consumer, including employers or family members;

· Fronting as a law firm and intimidating consumers with fake court case numbers on letters sent to consumers to falsely represent they had been sued for failure to pay a debt;

· Debiting more money from consumers’ bank accounts than consumers authorized, causing some to incur overdraft fees; and

· Accessing consumers’ credit reports without authorization to intimidate them to pay alleged debts.

Additionally, Madigan said in some instances PN Financial attempted to collect debts it was not authorized to collect. As a result, some consumers paid PN Financial, without realizing they didn’t owe any outstanding balances to the collection company, and reported losing at least $9,000. PN Financial also contacted other consumers over debts that had already been paid off.

Fifty-two consumers have filed complaints with Madigan’s office against PN Financial. The Chicago Better Business Bureau has received 82 complaints against the company.

“The BBB has received numerous complaints from consumers who allege a troubling trend in the debt collection industry,” said Steve Bernas, Better Business Bureau of Chicago president and CEO. “According to these consumers, certain debt collection companies are attempting to collect debts that these consumers don’t owe or have previously paid off. We support the efforts of Illinois Attorney General Lisa Madigan to protect consumers. Currently, PN Financial Inc., against which Attorney General Madigan filed suit today, has the BBB’s lowest rating—an ‘F’.”

Madigan’s lawsuit seeks to shut down PN Financial, permanently bar it from debt collection in Illinois, provide restitution to affected consumers and assess an array of civil penalties.

In addition to consumer debt, Madigan said other categories that topped her list of complaints involved identity theft and home repair. In 2011, more than 200,000 consumers contacted Madigan’s office for assistance and a total of 24,516 formal complaints were filed.

Madigan: Employee stole $1 million from Wirtz Beverage

Eric — Fri, 06 Jan 2012 13:44:00 -0500

Daily Herald, January 6, 2012

A 48-year-old Rockford-area woman is accused of stealing more than $1 million over six years from Schaumburg-based Wirtz Beverage, a liquor wholesaler and distributor run by Chicago Blackhawks Chairman Rocky Wirtz.

Linda Bessert of Winnebago was charged with felony counts of theft over $1 million and theft over $500,000, Illinois Attorney General Lisa Madigan announced Thursday in a statement.

While working as an office manager out of the company’s Rockford office, Bessert processed customer payments and was responsible for sending those deposits to the bank by armored car, according to the statement. She’s used her position to steal $1,058,293 between July 2004 and October 2010, Madigan said.

Bessert is being held on $500,000 bail. If convicted of the more serious theft over $1 million charge, she faces a mandatory prison sentence of six to 30 years.

“These allegations show that the defendant devised and executed a scheme to deceive her employer and steal over $1 million,” Madigan said. “This prosecution will ensure she will be held accountable for these illegal acts.”

Madigan brought the case based on an investigation and referral from the FBI.

Madigan, U.S. DOJ Reach $335 Million Settlement with Countrywide/Bank of America Over Discriminatory Lending

Eric — Wed, 21 Dec 2011 16:24:15 -0500

Decatur Tribune, December 21, 2011

Washington — Attorney General Lisa Madigan and the U.S. Department of Justice today announced a $335 million joint settlement with Countrywide, a subsidiary of Bank of America, over allegations that the former mortgage giant steered African-American and Latino borrowers into risky subprime loans more often than similarly situated white borrowers and charged them more for their loans during the height of the nation’s housing boom.

The joint settlement reached by Madigan and Department of Justice officials resolves allegations by Madigan and the DOJ of widespread and illegal discrimination against minority borrowers at Countrywide, which was purchased by Bank of America shortly after its collapse in 2008.

“Countrywide consistently sold African-American and Latino borrowers riskier loans at a higher cost than similarly credit-situated white borrowers. Even when Countrywide sold minorities prime loans, they paid more than white borrowers,” said Attorney General Madigan. “Now, African Americans and Latinos are still paying a higher price. No one can dispute that minority communities have been hit hardest by this crisis and will feel its effects longer.

“This settlement upholds the basic American tenet of justice and fairness for all,” Madigan said. “People’s access to credit, and the terms of their credit, should be determined on an equal basis, not on the basis of the color of their skin.”

Today’s settlement provides for an independent administrator to contact and distribute compensation payments to borrowers identified by the Department of Justice as victims of Countrywide’s discrimination. Eligible borrowers will be contacted by the administrator. Individuals who believe they were victims of Countrywide lending discrimination and have questions about the settlement may email countrywide.settlement@usdoj.gov.

The settlement stems from Madigan’s June 2010 lawsuit against Countrywide Financial Corporation, Countrywide Home Loans Inc. and Full Spectrum Lending Inc., an arm of Countrywide that mostly sold subprime loans. Her suit alleged numerous violations of the Illinois Fairness in Lending Act and the Illinois Human Rights Act, and included data to show minority borrowers paid more for mortgages than white borrowers and that they were more often sold riskier home loans, despite their qualifying for prime, or low cost, loans. Madigan’s analysis of Countrywide loan data found that these disparities could not be explained by objective factors, including borrowers’ credit scores or their debt-to-income ratios.

The Attorney General’s lawsuit and subsequent settlement follows years of investigation by her office into Countrywide’s lending policies and practices during the years leading up to the market’s collapse. Madigan issued a fair lending subpoena to Countrywide in March 2008, after a study by the Chicago Reporter of federally collected mortgage lending data for the Chicago area found that, in 2006, Countrywide Financial Corporation sold higher-cost loans to 50.9 percent of its African American borrowers and 33.8 percent of its Latino borrowers, while only 19.5 percent of the company’s white borrowers received high-cost loans.

Madigan’s analysis of Countrywide’s loan data found that African-American and Latino borrowers were three times more likely to receive a higher-cost subprime mortgage than white borrowers, and that Countrywide charged African-American and Latino borrowers higher interest rates and fees on loans spanning the company’s range of products, including its prime products, as compared with similarly-situated white borrowers.

It also found that these disparities in Countrywide’s subprime sales and loan pricing were the result of company policies that gave employees and mortgage brokers almost unlimited discretion in the selection and pricing of loans.

Countrywide was once the largest mortgage lender in the nation, including in Illinois, and led the country in selling subprime loans. The failure of millions of these higher-cost mortgages nationwide contributed to the nation’s housing crash, resulting economic recession and ongoing foreclosure crisis.

This is the second lawsuit Madigan filed against Countrywide. In 2008, the Attorney General filed a consumer fraud lawsuit against the lender for its major role in driving the foreclosure crisis, and in November 2008, she led negotiations that resulted in an $8.7 billion nationwide settlement of that lawsuit with Bank of America.

Her case against Countrywide is also Madigan’s second fair lending lawsuit brought against a mortgage lender. In July 2009, Madigan filed a lawsuit against Wells Fargo for violating the state’s fair lending and civil rights laws, becoming the first state attorney general in the nation to sue a federally chartered lender for its role in creating the foreclosure crisis. The Wells Fargo litigation is ongoing.