A former account executive for Washington Mutual Inc.’s subprime lending unit who earned more than $1 million a year has been found guilty of mortgage fraud.
Long Beach Mortgage originated residential subprime loans as a WaMu subsidiary until it was closed in 2007. A report from the Center for Public Integrity indicated that Long Beach was the fifth-biggest subprime lender between 2005 and 2007.
John Ngo, a loan coordinator at Long Beach, pleaded guilty in December 2007 to lying to a grand jury about accepting $100,000 in bribes from mortgage broker William T. Bridge between 2003 and 2006. Ngo allegedly ensured that fraudulent mortgages were funded.
A nine-month sentence was handed down to Ngo in September 2010.
Bridge, who operated as San Francisco-based The Loan Center, admitted paying the kickbacks in June 2008 and was sentenced in April 2010 to 21 months in prison. His brother and Loan Center employee Paul Bridge pled guilty in June 2008 and was sentenced in August 2010 to probation.
Another player is the bribery scandal was Joel Blanford, a former sales representative at Long Beach Mortgage.
Blanford, 44, earned volume bonuses by defrauding Long Beach Mortgage during 2003, 2004 and 2005, according to the Department of Justice. He operated the scheme by paying a loan coordinator more than $50,000 to fraudulently document loan files and look the other way at bogus files
The allegations include falsifying file documents, using fake verifications of employment and providing false professional licensing status.
During each of the three years in question, Blanford earned more than $1 million in commissions and other compensation, according to the government.
He was originally tried in May, but the trial resulted in a hung jury.
On Wednesday, however, Blanford was convicted of six counts of mail fraud by a federal jury in U.S. District Court for the Eastern District of California.
He is scheduled for sentencing on Dec. 10.
In addition to Blanford, Ngo and the Bridge brothers — other defendants in the case include Iftikhar Ahmad, who was sentenced to 36 months in February 2011; Manpreet Singh, who was sentenced in February 2009 to 60 months; and Jose Serrano, who was sentenced in November 2008 to 15 months.
