LoanDepot Lawsuit Alleges Wide-Scale Fraud
Summary
A class action lawsuit was filed by former chief operating officer, Tammy Richards, against CEO Anthony Hsieh on ordering the sales team to “trust all borrowers” and close all loans without checking any documentation. Richards stated she was shocked at the suggestion, knowing full well that this would be illegal and violate numerous federal laws, including the Dodd-Frank Title XIV – Mortgage Reform and Anti-Predatory Lending Act (“Dodd-Frank”). Afterwards, Richards claims that the loanDepot executives hatched a strategy dubbed “Project Alpha” in which Hsieh allegedly personally identified over 8,000 loans that were closed without proper documentation. The lawsuit describes that upper-level management, enabled by CEO Hsieh, fostered a “misogynistic frat house culture” within the company’s corporate office, at the expense of its female employees. Richards claims that one of the main provocateurs in fostering loanDepot’s “frat house” culture is senior executive and close friend of the company’s founder, Tomo Yebisu.