Citigroup whistleblower awarded $31 million after exposing lending fraud

Wednesday, August 29, 2012 by: J. D. Heyes
Tags: Citigroup, whistleblower, financial reward

eTrust Pro Certified

Most Viewed Articles
Popular on Facebook
CDC issues flu vaccine apology: this year's vaccine doesn't work!
The five biggest lies about Ebola being pushed by government and mass media
Ultraviolet light robot kills Ebola in two minutes; why doesn't every hospital have one of these?
Tetanus vaccines found spiked with sterilization chemical to carry out race-based genocide against Africans
Biologist explains how marijuana causes tumor cells to commit suicide
Companies begin planting microchips under employees' skin
The best way to help your body protect itself against Ebola (or any virus or bacteria)
NJ cops bust teenagers shoveling snow without a permit
Russia throws down the gauntlet: energy supply to Europe cut off; petrodollar abandoned as currency war escalates
McDonald's in global profit free fall as people everywhere increasingly reject chemically-altered toxic fast food
W.H.O. contradicts CDC, admits Ebola can spread via coughing, sneezing and by touching contaminated surfaces
Top ten things you need to do NOW to protect yourself from an uncontrolled Ebola outbreak
Chemotherapy kills cancer patients faster than no treatment at all
FDA targets Dr. Bronner's Magic Soaps for sharing health benefits of coconut oil
U2's Bono partners with Monsanto to destroy African agriculture with GMOs
Why flu shots are the greatest medical fraud in history
Governments seize colloidal silver being used to treat Ebola patients, says advocate
Flu vaccine kills 13 in Italy; death toll rises

(NaturalNews) Growing up, small-town, rural Michigan girl Sherry Hunt said she never thought she'd ever be near the top of a major Wall Street bank.

In fact, at age 16, she got married and had no plans to go to college. She was more concerned about finding a job when, at age 17, she had her first child.

A friend helped her: She got a job in 1975 processing home loans at a small bank in a place about as far away as you can get from Wall Street - Alaska.

Over the next three decades, Bloomberg Magazine reports, Hunt managed to grow in the banking industry. She moved - from Alaska and up the corporate ladder - to higher banking positions in Missouri, Minnesota, and Indiana.

And though she left the country, the country never left her; on days off, when she and her husband weren't spending time fishing or doing other things outdoors, she would often ride her horse in Wild West shows, sometimes dressing up as the legendary Annie Oakley.

And always, she enjoyed the home mortgage business. She enjoyed helping people buy homes, the magazine said.

Moving on up

In November 2004, Hunt had an opportunity to join Citigroup and, at 55, became a vice president in the firm's mortgage division.

It was high times for the housing market; it was booming, with Citigroup - the nation's sixth-largest U.S. lender, accounting for 3.5 percent of all of the country's home loans. Hunt's role was supervising 65 underwriters at CitiMortgage's extensive, upscale headquarters in O'Fallon, Mo., near St. Louis.

Hunt and her team were financial goalies, of sorts; their job was to protect Citigroup from fraud and bad investments.

"She and her colleagues inspected loans Citi wanted to buy from outside brokers and lenders to see whether they met the bank's standards. The mortgages had to have properly signed paperwork, verifiable borrower income and realistic appraisals," said the magazine.

Citi was to vouch for the loans, to make sure they were of good quality before selling them to investors or approving them for government mortgage insurance. Citi's approval meant that investors were assured the banking giant would back the mortgages if borrowers stopped paying their notes.

But because housing was indeed booming, demand from investors was incredibly strong for mortgages packaged into securities, leaving Citi unable to process them quickly enough.

In O'Fallon, Hunt was essentially supervising an assembly line operation of approval that helped the hyperinflation of the housing bubble whose implosion would eventually rock U.S. - and global - financial markets to their core.

Hunt says the factory-like pace was so fast it was impossible to examine every loan.

Go along to get along?

By 2006, the bank was buying bad paper: mortgages from outside lenders containing doctored paperwork, missing signatures, bogus appraisals. Hunt's job was to identify these defects and report them to bosses, which she did regularly in written reports.

But her warnings were buried - before, during and even after financial collapse, clear into 2012, she told the magazine.

In March 2011, after Citigroup was handed $45 billion in taxpayer-funded bailout money via the U.S. government, in addition to billions more from the Federal Reserve, Hunt and a colleague were asked by Jeffery Polkinghorne, an O'Fallon executive in charge of loan quality, to remain in a conference room following a meeting.

Hunt says that meeting was brief, fierce and to the point: Polkinghorne was telling them a number of loans classified as defective would have to fall, or else "your asses will be on the line."

She says it was clear what she and her colleague were being asked to do.

And she said she'd have no part of it.

"All a dishonest person had to do was change the reports to make things look better than they were," she told the magazine. "I wouldn't play along."

Rather, she took Citigroup to court instead - and she won.

"I set up an appointment with human resources and ethics and told them everything," she told Reuters. "They did some cursory investigation. The sad part is, they never ever told me, 'Sherry, you were right,' or 'Sherry, you're looking at this wrong.' There were no assurances."

No regrets

In fact, Citigroup didn't dispute her case at all. The banking giant didn't even mount a defense. So, on Feb. 15, 2012, the bank agreed to pay $158.3 million to the U.S. government to settle the case, said the magazine.

And, as a reward for not playing along with her employer, Hunt received $31 million of that settlement.

The fact that Citigroup was still behaving badly as late as 2012 just demonstrates how a big bank that got into big trouble still hasn't learned the lessons of the credit crisis, despite tens of billions in bailout money paid for by taxpayers, said Neil Barofsky, former special inspector general of the Troubled Asset Relief Program, or TARP.

"This case demonstrates that the notion that the bailed-out banks have somehow found their conscience and have reformed their ways in the aftermath of the financial crisis is pure myth," he said.

Hunt is reflective of her time at Citigroup.

"Citi is full of wonderful people, conscientious people," she said.

In the end, she said she made the right decision.

"I didn't care if I lost my house, and I knew I would risk my career, but I was willing to go forward even if we had to start over in an apartment and I had to get a job outside the mortgage industry," she said. "And I have no regrets."


Join over four million monthly readers. Your privacy is protected. Unsubscribe at any time.
comments powered by Disqus
Take Action: Support by linking back to this article from your website

Permalink to this article:

Embed article link: (copy HTML code below):

Reprinting this article:
Non-commercial use OK, cite with clickable link.

Follow Natural News on Facebook, Twitter, Google Plus, and Pinterest

Colloidal Silver

Advertise with NaturalNews...

Support NaturalNews Sponsors:

Advertise with NaturalNews...


Sign up for the FREE Natural News Email Newsletter

Receive breaking news on GMOs, vaccines, fluoride, radiation protection, natural cures, food safety alerts and interviews with the world's top experts on natural health and more.

Join over 7 million monthly readers of, the internet's No. 1 natural health news site. (Source:

Your email address *

Please enter the code you see above*

No Thanks

Already have it and love it!

Natural News supports and helps fund these organizations:

* Required. Once you click submit, we will send you an email asking you to confirm your free registration. Your privacy is assured and your information is kept confidential. You may unsubscribe at anytime.