Bribes for the bankers

On Friday (September 26), Israel Hechter, owner of a San Diego mortgage investment firm Ocean 18, admitted that he paid $1 million in bribes to bank insiders at JP Morgan Chase, GMAC Mortgage, and National City Bank (of National City) so he could win bids to purchase loans sold by the banks. (Loans are sold in the secondary mortgage market, which is a $10 trillion business.)

Two days earlier, Hechter's brother Amir and a business association, Jack Prober, pleaded guilty to helping in the racket. On Tuesday, the Hechters' father, Zeev, admitted in New York that he, too, participated.

The bankers fixed the deals by altering and rejecting other bids so the conspirators could win the bidding. And the bankers are getting caught. GMAC banker Robert Moreno has admitted to taking $330,000 in cash from Zeev Hechter. On October 16 or 17, another banker will be charged, according to Phillip Halpern, assistant U.S. attorney in San Diego. The third banker who took bribes is dead, says Halpern.