Federal regulators say Cascade Financial is ‘a major financial institution’
Federal regulators have accused Cascade Financial of “dodging billions of dollars of the federal government’s regulatory oversight” and said it was “a major banking institution” that “provides significant services to many of the nation’s largest financial institutions.”
The complaint filed Wednesday in the U.S. District Court for the District of Columbia alleges that Cascade Financial was a “major financial institution” under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and that the bank’s practices constituted “unjust enrichment.”
The Federal Deposit Insurance Corporation (FDIC) said it has already imposed a $5.8 billion penalty on Cascade Financial for the same violations and it is also investigating the bank.
Cascade Financial did not immediately respond to ABC News’ request for comment.
The lawsuit, filed on behalf of more than 100 plaintiffs, alleges that the firm’s failure to disclose numerous serious problems with its “fiscal reporting,” “foreclosure history,” “fraud and abuse” and “reckless disregard” of federal laws and regulations led to “massive losses” and millions of dollars in “bailouts” that were never repaid.
Cascades Financial “is guilty of a host of serious violations of the Bank Secrecy Act and related laws, including the National Bank Securities Act,” the complaint states.
Cadillac Financial also has alleged that the company “failed to disclose to its customers, shareholders and customers the fact that Cadillac was the subject of a criminal investigation by the FDIC” and that it “engaged in a massive fraud scheme that defrauded millions of customers and investors of millions of their savings.”
Cadillacs Financial is one of five major U.K. financial firms accused of fraud by the U,S.
The other four are HSBC, Barclays, HSBC’s parent company, UBS and Santander.