Bankers Bribed in Secondary Marketing Scheme

The scheme was used in the trading of mortgages, many of which were non-performing or distressed second mortgages, according to the Department of Justice.

In addition to Chase, the defendants allegedly paid bribes to insiders at GMAC Mortgage LLC and National City Bank.

With the bribes in hand, the bank insiders corrupted the bidding process by altering, rejecting and erasing or ignoring qualified competing bids.

Among the defendants is Israel Hechter, who owned Ocean 18 LLC and Note Tracker Corp., a pair of mortgage investment firms operating from San Diego.

Hechter, who had been struggling to get his bids accepted prior to the conspiracy, admitted last month that he paid $1 million in bribes.

Also pleading guilty were Hechter’s brother, Amir, and Jack Prober, who both admitted writing personal checks to the bankers in order to help them evade income taxes.

Hechter’s father, Zeev, admitted delivering $330,000 in cash to Robert Moreno, a banker who sold mortgages on behalf of GMAC. Moreno also pled guilty. The payments were made in 2012.

Moreno collected the bribes right on the streets of New York and at Israel Hechter’s car wash, which the government claims was used to launder money. Tens of thousands of dollars in cash were handed to Moreno in bags.

The bribes were disguised as legitimate commissions unrelated to the bankers’ positions at the banks. Hechter and Moreno set up a bank account, a bogus consulting agreement and a business, Phoenix Asset & Acquisition Inc., to launder the bribe money. Moreno copied the agreement to use with other bidders — collecting over $500,000 from them.

In all, Moreno collected more than $1 million from Hechter and his associates, according to the U.S. Attorney for the Southern District of California. He also accepted hundreds of thousands of dollars in bribes from another Southern California customer and traveled the country taking cash bribes from other parties..