Cities file new Fair Housing suits against Wells Fargo; Petters gets 50 years

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Friday, April 9, 2010


Cities file new Wells Fargo housing suits

Baltimore and Memphis have filed new federal lawsuits accusing Wells Fargo of steering black borrowers into expensive mortgages, only to later conduct many foreclosures that cost the cities property tax revenue and forced both to spend more on public safety.

The cities filed complaints Wednesday, the same day Wells Fargo agreed to settle an NAACP lawsuit accusing it of steering blacks into subprime mortgages while giving comparable white borrowers better loan terms. As part of the accord, Wells Fargo will let the civil rights group review its lending practices.

Baltimore's amended Fair Housing Act complaint comes three months after an earlier lawsuit was dismissed for being too broad. In its amended complaint, Baltimore identified specific expenses it said it incurred because of Wells Fargo foreclosures, including costs for inspections, condemnations and boarding up of homes, as well as increased police and fire costs.

Memphis's lawsuit filed in December also alleged FHA violations. The 83-page amended complaint adds a claim that Wells Fargo violated Tennessee consumer protection law.

-- Reuters

Tycoon gets 50 years for Ponzi scheme

A federal judge sentenced fallen Minnesota tycoon Tom Petters to 50 years in prison for orchestrating a $3.7 billion Ponzi scheme that counted hedge funds, pastors, missionaries and retirees among its victims.

Petters, 52, apologized at his sentencing hearing to family, friends, co-workers and others who were hurt, but he did not concede guilt. U.S. District Judge Richard H. Kyle said he didn't believe Petters, the onetime owner of Polaroid and Sun Country Airlines, was unaware of the fraud within his operations at Petters Group Worldwide, as he has claimed.

A jury convicted Petters in December on 20 counts of wire fraud, mail fraud, money laundering and conspiracy.

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