California Real Estate Fraud Report

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Appraiser Blocked by Court from Collecting Whistleblower Reward

The appraiser who was the whistleblower on the Mutual Bank of Harvey has been blocked by a federal judge from receiving any of the proceeds of the case as a relator.

Kenneth Conner worked for the bank from 2000-2007 and first noticed and pointed out the fraud to his superiors at the bank. They told him they were aware of the appraisal values and to sign-off on them anyway; he was fired in 2007.

In June 2011, Conner filed suit against the bank, it’s owners, officers and some members of the board, as well as Oakbrook Terrace-based Adams Appraisal Corporation. The federal government declined to intervene in the suit, but the FDIC did, demanding $130 million in damages from the Veluchamy family, which owned 95% of the bank’s shares.

U.S. District Judge Sharon Johnson Coleman has blocked the bid of a former appraisal reviewer who blew the whistle on alleged fraud at a failed suburban bank from collecting as much as a quarter of any settlement the directors of the bank may reach with the Federal Deposit Insurance Corporation, upholding the ruling of another judge who ruled that “the FDIC did not constitute the government as contemplated” in the law, and therefore “Conner did not have a legally protectable interest in any settlement money that the FDIC recovered in that action.”

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© Copyright 2007-2018 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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