A former Jefferies Group executive has been charged in a mortgage debt fraud case that involves the defrauding of the recent United States banking bailout. U.S. authorities have named Jesse Litvak as the charged. Litvak was a senior trader on the Jefferies’ trading floor, located in Stamford, Connecticut. The case against Litvak is the first under a 2009 law that bans “major fraud” against the United States through the Troubled Asset Relief Program (or TARP).
Litvak’s scheme is said to have accrued over $2.7 million in revenue for Jefferies by misrepresenting the price of mortgage-backed securities. These mortgage-backed securities are intimately related to mortgage debt proceedings that have been going on throughout the country. Litvak was able to use the earnings in mortgage debt securities to offset the plunge in the securities market experienced by many firms like Jefferies during the so-called “Great Recession.”
Litvak joined Jefferies in April 2008 and was fired in December 2011 for trading problems. The new case against him was years in the making, but now the evidence of his mortgage debt-related antics is clear. Previous complaints against Litvak resulted in a $2.24 million settlement against Jefferies, whom he worked for when the customer complaint claim was filed in March 2012.
Litvak’s case is one of 121 similar cases from the TARP and financial fraud bureau that charged him, many of which deal with mortgage debt and mortgage debt fraud. The potential of these cases could shift the balance of recent mortgage debt problems in the country, with some being held accountable for their mortgage fraud antics.