Former banker admits to $200,000 in bribes
SAN DIEGO (CNS) – A former banker admitted in San Diego federal court Friday to receiving more than $200,000 in bribe payments related to J.P. Morgan Chase’s sale of mortgages on the secondary market.
Lynda Sanabria, 51, pleaded guilty to conspiracy to commit bank bribery and tax evasion and will be sentenced Jan. 19.
Sanabria used her position and influence at Chase to ensure that her preferred customers won their bids to purchase mortgage notes, according to her guilty plea. She received the bribe payments from San Diego businessman Israel Hechter, who pleaded guilty in September and admitted paying a total of $1 million in bribes to Sanabria and others.
As detailed in court documents, Sanabria began accepting bribes from Hechter and his associates as early as 2004, when Hechter offered to pay her on the side in return for providing inside information on loans that Chase was putting up for sale.
Around 2004, he arranged to make a $70,000 payment to Sanabria, which she used to purchase property near Lake Havasu, Ariz. In addition, Hechter would provide Sanabria with a fixed payment — (up to around $300) — for each loan on which he bid. Pursuant to the arrangement, Sanabria provided Hechter with details about his competitors’ bids, which helped ensure that Hechter was the winning bidder.
By 2008, Hechter stopped reporting the illegal payments to the Internal Revenue Service, and Sanabria stopped paying taxes on the illegal income, prosecutors said.
As noted on Sanabria’s guilty plea, Hechter later referred to the payments as birthday gifts or consulting fees in order to disguise the fact that he was paying for influence over her decisions at Chase.
Hechter, the owner of San Diego-based mortgage investment firms Ocean 18 LLC and Note Tracker Corp., admitted in his guilty plea that he paid $1 million in bribes to Sanabria and other bankers at GMAC and National City Bank. In order to make sure his bids were successful, the bankers corrupted the process by altering bids, rejecting other bids and erasing or ignoring bids from qualified competitors.
After purchasing the mortgages from the various financial institutions, Hechter pooled the loans and sold shares of the pools to investors, usually friends and family members including his father, Zeev Hechter, his brother, Amir Hechter, and his employee, Jack Prober, each of whom also invested in the pools. After purchasing the loans, Ocean 18 would service them and collect monthly payments from the borrowers, or would initiate foreclosure proceedings when the borrowers defaulted.
The investors made money when borrowers made payments, sold the properties, or after foreclosure or resale.
Zeev Hechter, Amir Hechter and Prober each pleaded guilty in September and are scheduled to be sentenced Jan. 5.