Former Deutsche Bank Executive Ordered To Pay $500,000 To Settle Claims Relating To RMBS Fraud
Federal Prosecutors have reached an agreement with former Deutsche Bank executive Paul Mangione. Federal prosecutors and Mangione settled a civil action filed in September 2017. Mangione was a former Managing Director and head of subprime trading at Deutsche Bank.
The federal government sought civil penalties for Mangione’s conduct with Deutsche Bank’s marketing and sale of two residential mortgage-backed securities (RMBS) in 2007. The agreement also provides for payment of $500,000 in civil penalties in exchange for dismissal of the complaint.
United States Attorney for the Eastern District of New YorkRichard P. Donoghue announced the settlement:
Mr. Donoghue also thanked the FHFA-OIG for its assistance in conducting the investigation in this matter.
Federal Prosecutors alleged in United States v. Paul Mangione that Mangione engaged in a scheme to defraud investors in two Deutsche Bank RMBS Trusts. The two trusts were ACE 2007-HE4 and ACE 2007-HE5.
Mangione allegedly misrepresented the characteristics of the loans backing the two securities. He also misled potential investors about the loan origination practices of Deutsche Bank and a wholly-owned subsidiary, DB Home Lending LLC (f/k/a Chapel Funding, LLC).
DB Home Lending also originated a number of the loans backing the two RMBS. The complaint also stated the government was seeking relief under FIRREA. Federal prosecutors also say their claims are based on mail fraud and wire fraud laws.
The settlement agreement does not constitute an admission by Mangione of any wrongdoing. There has also been no trial or adjudication or a judicial finding of any issue of fact or law.
To report RMBS fraud, go to: http://www.stopfraud.gov/rmbs.html.