Consumer & Investor Financial Fraud
Prepared by
Consumers, investors, companies, and the public may incur financial harm from industry practices alleged to be unfair, deceptive, abusive, discriminatory, or negligent. The Brattle Group has a wealth of experience working on high-profile investigations and litigation involving financial harm and deception, including cases that arise from alleged fraudulent activities by businesses and public officials.
Brattle has worked on cases involving fraudulent activities such as:
-
Bribery
-
Deception and false claims
-
Discrimination
-
Fair lending violations
-
Loan servicing failures
Our consultants have expertise in high-stakes investigations and litigation involving the federal government and other regulatory agencies, including the Consumer Financial Protection Bureau (CFPB), the US Department of Justice (DOJ), the Financial Crimes Enforcement Network (FinCEN), the Financial Industry Regulatory Authority (FINRA), the Federal Trade Commission (FTC), and the US Securities and Exchange Commission (SEC). These matters require detailed, objective analysis of documents and data, including communications, policies, and consumer or investor account-level information. Our analytic approach is focused on treating all information as a data source and making the best use of available data to answer case-specific questions, sometimes in real time.
Brattle’s experts specialize in applied computer science, forensics, and statistical analysis and work closely with counsel to analyze and explain potential regulatory violations, inform case theory, and support expert testimony. In addition, we develop robust econometric models to determine any resulting economic damages or restitution for harmed consumers or investors.
- Misappropriation of consumer and investor funds
- Manipulation, mismarking, and inflation of securities
- Money laundering (domestic and international)
-
Predatory and excessive fees
-
Sanctions and tax evasion
Representative Engagements
Consumer Financial Protection
Investor Protection
Fraud Investigations and Enforcement
Public Corruption
Deceptive Industry Messaging
Mortgage Loan Servicing Matters
Opioid Litigation
Discriminatory Practices
Misappropriation of Investor Funds
Initial Coin Offering Wire Fraud Conspiracy
Anti-Money Laundering (AML) Failures
Mortgage-Related False Claims
Money Laundering and Bribery of Foreign Government Officials
Political Donations
Deceptive Loan Practices
Deceptive Claims of Free Products and Services
Mortgage Loan Servicing Matters
Brattle’s consultants analyzed whether systematic flaws in a major loan servicing company’s software resulted in wide-scale faulty loan information, errors in servicing loans, and unfair foreclosure practices. Brattle’s analysis informed the investigation’s scope. We reviewed consumer-level data produced by the company to identify gaps and shortcomings in the data and comprehensively trace account activity. Separately, Brattle teams supported the analysis of three testifying experts, including a damages expert who developed statistical models designed to estimate consumer harm.
In a related matter, Brattle provided consulting support in a pre-litigation investigation of residential loan servicing failures. The team calculated damages to consumers across demographics, including decreases in credit scores that were caused by faulty loan origination and maintenance systems. Brattle assisted with interrogatives, deposition, and the review of millions of consumer and loan-level data.
Opioid Litigation
A team of Brattle economists and consultants assisted in a litigation against a pharmaceutical company, its subsidiaries, and affiliates in proceedings related to the opioid epidemic. Brattle estimated the costs of abatement programs to address the epidemic and developed a Markov model to forecast impacted populations, drawing on recent literature in economics, epidemiology, and public health.
Discriminatory Practices
Brattle has a wealth of experience working with both loan-level mortgage data and large datasets and document productions in lending discrimination cases. For example:
-
A Brattle team analyzed a mortgage lender’s database covering five years of lending activity, accounting for over 0.7 million loan applications and approximately 600 loan types. The team carefully audited this information and conducted statistical analyses testing for discrimination in lending decisions and lending rates while controlling for race, income, age, location, and various risk factors.
-
Our experts developed a detailed database of city government contracting applications and contract payments over an extended period. The database allowed us to conduct statistical analyses to identify evidence of discrimination in primary and subcontracting on city- and federally-funded contracts.
-
On behalf of a US state’s Department of Transportation, Brattle performed a comprehensive and critical review and submitted testimony related to a large, sophisticated statistical study. The study was used to establish a race-conscious affirmative action program for subcontracting.
In addition to the work described above, Brattle has a long history of working on discrimination in lending, housing, contracting, hiring, wages, and promotion. Much of this work involves the development and maintenance of large databases and conducting statistical analyses, which are often completed as part of or in anticipation of litigation.
Misappropriation of Investor Funds
In the criminal prosecution of Samuel Bankman-Fried, the founder and CEO of the bankrupt cryptocurrency exchange FTX, Brattle supported the plaintiff’s sole testifying expert. Bankman-Fried faced criminal charges related to misappropriating $9 billion of consumer and investor funds to benefit himself and his hedge fund, Alameda Research. Brattle’s analysis helped identify the sources and uses of misappropriated consumer and investor funds and assisted the US District Court for the Southern District of New York in obtaining a guilty verdict.
Initial Coin Offering Wire Fraud Conspiracy
In a securities and wire fraud conspiracy case in connection with a $25 million initial coin offering (ICO), Brattle demonstrated a company’s misleading marketing and online presence, designed to manufacture credibility. Allegations against the firm included fake principals and advertising a fraudulent cryptocurrency debit card. As part of our analysis, we traced crypto and fiat currencies across various bank accounts.
Anti-Money Laundering (AML) Failures
Brattle provided consulting and testifying expertise in the first-ever federal case brought against a chief compliance officer (CCO) for his failure to flag suspicious activity and for willfully failing to maintain an effective AML program. The team analyzed all transaction activity during the CCO’s five-year tenure. We followed each transaction through the internal review process to identify potentially fraudulent transactions for which the company did and did not file currency transaction reports (CTRs) or suspicious activity reports (SARs). Additionally, we summarized corroborating data from related but unstructured sources, such as emails and paper files. Separately, Brattle worked with a testifying expert on AML customs and practices.
Mortgage-Related False Claims
Brattle assisted in a False Claims Act case involving a bank accused of defrauding the Federal Housing Administration by underwriting FHA loans that did not meet the agency’s standards, leading to losses for the mortgage insurer. Brattle consultants performed a highly detailed analysis of millions of documents and hundreds of thousands of loans to determine the information known about the quality of the loans in question, the bank’s underwriting procedures, the causes of loan defaults, and the extent of resulting damages. Separately, a Brattle expert submitted expert testimony based on an analysis of loan quality-control data and its value implications.
In a related matter, Brattle advised in litigation involving a False Claims Act against a bank accused of misrepresenting the quality of loans insured through the FHA Direct Endorsement Lender program. Brattle consultants analyzed whether the bank knowingly misled HUD about the quality of mortgages, which later defaulted. Our analysis included financial and institutional factors relating to then-current market conditions and banking standards and practices in the mortgage industry.
Money Laundering and Bribery of Foreign Government Officials
Brattle worked in a criminal case alleging bribery of former foreign government officials by the head of a US-based Chinese non-governmental organization (NGO) in a multi-year, multimillion-dollar scheme. Brattle analyzed over 300,000 emails and attachments belonging to more than 20 different email accounts in native form, produced through search warrants from email servers and physical devices. The team used coded data extraction to pull metadata and content in text form from these email files to create a comprehensive working database of the multi-source information. We then applied fuzzy matching procedures to identify and review communications with the entities of interest during the relevant time periods.
Public Donations
In an investigation against a political operative accused of misusing funds from a political action committee (PAC), Brattle was engaged to structure and analyze bank records and other account data to trace fund flows to outside accounts and third parties. Brattle was able to extract and clean transaction data and check images from over 35,000 discovered files, identifying the sender and recipient of most transactions and providing a summary and history of both personal and operating accounts. The team applied coded data extraction to extract metadata and content from thousands of bank statements across multiple institutions and create a functional financial transaction database. This allowed us to identify how donations were spent by the PAC.
Deceptive Loan Practices
Brattle provided assistance in a lawsuit involving a financial company and its affiliates, addressing allegations of deliberate targeting of low-income borrowers in the state. The team supported counsel by analyzing the company’s financial statements, rental purchase agreement terms, board presentations, filings, and exhibits, conducting in-depth analyses and summaries of the data. A Brattle expert submitted a report assessing the company’s capital requirements, informing the extent of liability of the parent company.
Deceptive Claims of Free Products and Services
Brattle provided analyses and supported an expert in investigating whether a product or service marketed as free –but, in reality, is not free for the majority of consumers – is deceptive advertising and a violation of the Federal Trade Commission (FTC) Act. Brattle identified evidence of actual subjective deception of consumers as well as game theory literature supporting a business interest in intentionally deceiving consumers. As part of our analyses, Brattle reviewed millions of consumer-level data, applied behavioral and analytical models, and performed contextual searches to identify and categorize deceived consumers.
Thought Leadership
Related Practices
Key Contacts
Mr. Hinton has over 20 years of experience in litigation consulting, directing projects, and providing expert testimony in product liability, financial, and commercial disputes.
An expert in product liability, finance, economics, and valuation topics, Mr. Hinton has testified before arbitral tribunals and legislative committees, and in litigation. He has assisted US-based and multinational companies in estimating and modeling their personal injury liabilities. Mr. Hinton has advised insurance companies on claims liability estimation and in insurance coverage litigation involving insurance allocation. In the decade beginning in 2000, Mr. Hinton worked on claims liability estimations on behalf of a number of asbestos defendants that choose to use bankruptcy restructuring to resolve asbestos personal injury claims against them. These asbestos-related bankruptcies included W.R. Grace & Co., Owens Corning, Combustion Engineering, and Armstrong World. Other recent mass tort bankruptcy case experience includes the Boy Scouts of America case and the Diocese of Camden, New Jersey case.
For a full bio, casework, and publications, please visit Mr. Hinton’s web bio.
Mr. McKnight has over 20 years of experience in economic consulting, providing expert testimony and consulting services in litigation, bankruptcy, and arbitrations pertaining to mass torts, bankruptcy, valuation and commercial disputes.
In mass tort matters, Mr. McKnight has worked with liability forecasts, insurance coverage, and discounted cash flows. He has forecasted future liabilities for personal injury claims resulting from exposure to asbestos, silicosis, PFAs, pollution, and various drugs and medical devices. Mr. McKnight has allocated projected losses to available insurance coverage and estimated the resulting cash flows. He developed models of exposure to asbestos, pharmaceuticals, and medical devices to estimate the future incidence of disease for use in litigation, financial accounting, due diligence, and assessing the adequacy of bankruptcy trust funding. He has submitted written testimony on the estimation of sexual abuse claims to the United States Bankruptcy Court for the District of Delaware in the Boy Scouts of America bankruptcy and has testified before the United States Bankruptcy Court for the District of New Jersey in the Diocese of Camden, New Jersey bankruptcy.
For a full bio, casework, and publications, please visit Mr. McKnight’s web bio.
Forensic Accounting
Financial Investigations
about brattle
The Brattle Group answers complex economic, finance, and regulatory questions for corporations, law firms, and governments around the world. We are distinguished by the clarity of our insights and the credibility of our experts, which include leading international academics and industry specialists. Brattle has 500 talented professionals across North America, Europe, and Asia-Pacific.
