Attorney Monitor Tracks $2.5 Billion Settlement: Business of LawCarla Main
Independent monitor Thomas Perrelli released his third report this year giving details of Citigroup Inc.’s progress in complying with a settlement valued at $2.5 billion.
Citigroup agreed to Perrelli’s appointment as part of the settlement.
The settlement resolved issues from the days before the financial crisis of 2008, addressing allegations that the bank sold defective residential mortgage-backed securities and collateralized debt obligations in 2006 and 2007. Citigroup settled on July 11, 2014, with the U.S. Justice Department and five states, agreeing to pay $4.5 billion to the governments.
The bank also agreed to remedial measures, promising $2.5 billion in consumer relief, according to a summary of the first monitor’s report prepared by Perrelli in January. The relief was to include loan modification for so-called underwater homeowners, down payment and closing cost assistance, and subordinate financing for affordable rental housing projects.
The ongoing nature of that relief would require monitoring. Under the terms of the settlement agreement, “any cost associated” with the monitor “shall be borne by Citigroup.”
Perrelli, a partner at Jenner & Block LLP’s Washington office and a former associate attorney general, has been measuring the bank’s progress in consumer credit relief, investments in affordable housing and consumer outreach.
The new report follows reports released in January and May.
Perrelli found that Citigroup provided $95.2 million in relief for the period ended March 31. He also confirmed the credit the bank sought for mortgage relief under the agreement in amount of $29.7 million. Transactions relating to so-called gap financing for affordable housing were submitted by Citigroup. Perrelli is still reviewing them, according to the report.
“We are pleased with our progress under the terms of the settlement agreement,” Mark Rodgers, a company spokesman, said in an e-mailed statement. “Citi remains committed to assisting distressed borrowers in their efforts to avoid potential foreclosure.”
Guilty Plea in Fraud Scheme on Law Firms, NJLJ Says
Martin Feliz, 48, admitted to using fake litigation-support companies to bilk law firms of more than $7 million, the New Jersey Law Journal reported.
Feliz pleaded guilty to tax evasion and conspiracy to commit wire fraud last week in federal court in Newark.
Sentencing is scheduled for Dec. 14.
The conspiracy charge carries a prison sentence of as long as 20 years and a maximum fine of $250,000. The tax-evasion charge could bring five years in prison and a $250,000 fine, the newspaper said.
Feliz admitted that he created two limited-liability companies that submitted invoices to a law firm where his wife, Kiela Ravelo, worked. The invoices didn’t reflect real work, prosecutors said.
Prosecutors said Ravelo approved the invoices, according to the paper. A charge of conspiracy to commit wire fraud against her “is pending,” the paper reported.
“Until today, Ms. Ravelo had hoped and prayed that Feliz would take full responsibility for his actions, by publicly proclaiming, as he has consistently told his family, that Ms. Ravelo acted as Feliz coercively demanded,” Stephen Sadow, a lawyer for Ravelo, told the newspaper. “He has caved to government pressure to implicate her.”
Squire Patton, Greenberg Traurig Advise on Pest Industry Deal
Squire Patton Boggs US LLP’s M&A partner Abby Brown led the team that represented Steritech Group in a deal to be acquired by Rentokil Initial Plc.
The $425 million all-cash agreement will create one of the largest pest-control providers in the U.S., according to an e-mailed statement by the law firm. The agreement is subject to regulatory approval.
Completing the transaction will make Rentokil the third-largest pest-control company in Canada and the U.S., the company said in a statement.
Charlotte, North Carolina-based Steritech provides “environmentally friendly pest elimination,” the company said on its website.
Brown, who is based in Washington, was assisted by partners Jonathan Pavony, M&A; Sean Clancy, tax; Carl Draucker, benefits; Jill Kirila, employment; Russ Randle, environmental; and Anthony Swisher, antitrust; as well as principal Stacy Krumin, real estate; and counsel Ivan Rothman, intellectual property.
Shareholder Paul Maher, who practices corporate law, led the team at Greenberg Traurig LLP in representing Rentokil.
Other members of the group included shareholders Gillian Sproul, Andrew Berg, Francisco O. Sanchez, litigation; Yosbel A. Ibarra and Antonio Peña, corporate and securities; Mindy B. Leathe, tax; and Todd D. Wozniak, labor and employment. Counsel on the team were Daniel I. Schloss, intellectual property and technology; and Mary Marks, litigation.
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