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

Friday, April 9, 2010; A14

LEGAL

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.

-- Associated Press

EXECUTIVES

Ex-Wyeth CEO joins Carlyle Group as adviser

Former Wyeth chairman and chief executive Robert Essner has joined the Carlyle Group as a senior adviser to its global health-care group, the private equity firm said.

Essner, 62, will advise executives of companies in the firm's portfolio on management and growth strategies. He also will offer health-care investment advice "from sourcing to purchase," the District-based firm said in a statement.

Essner served as Wyeth chief executive from 2001 to 2007 and as chairman from 2003 to 2008.

Essner also is an executive in residence and adjunct professor at Columbia University's business school and a board member for Massachusetts Mutual Life Insurance.

-- Associated Press

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