new post by the New Republic details how Nye Lavalle, a sports agent and founder of Sports Marketing
Group, was the victim of the greatest financial fraud in the history of
the United States. Nye is the great-grandson of Teatro Colon, a president
for Argentina and successful manager of tennis players in the 1970s. He
was also one who called the rise of NASCAR and figure skating. It was
around 1989 when Nye entered something he didn’t expect to, and
something that would end up with him uncovering one of the nation’s
great financial frauds.
In 1989, Nye was running some of his business from a home he bought for
his parents out of Dallas. At the time, Savings of America (SOA) was the
largest savings and loan institution in the nation. They owned and serviced
the loan used to purchase the home, and despite requests from Nye’s
parents to send the monthly statements to their Michigan home —
their primary residence — SOA would either send the statements to
the Dallas home or not at all. It was the beginning of something that
would financially harm Nye and his parents because of the way the transactions
Despite paying at a branch directly, Nye would be charged late fees as
SOA would send the check to a servicing center which would in turn deliver
it to the proper division. By this time, they payment was considered late
and Nye was charged the late fee despite him having a check receipt that
showed payment was made before the due date. Nye represented Visa and
Barclays as part of his consulting firm and he began discussing these
situations with them. He came to the conclusion that the only way for
these loan servicers to make a big incentive for fees would be to make
the customer delinquent, maximizing profits.
Through force-placed insurance, SOA would attempt further efforts to scam
Nye’s parents. Because homeowners are required to be covered under
property insurance, any time it was lapsed, the loan servicing company
would force the homeowner to be covered under one of their own, overpriced
policies, and getting a kickback from the insurer. This was a way to get
more money, racking up insurer profits and making homeowners owe late
fees. With Nye, this occurred three times on the same loan and each time,
SOA had force placed additional policies on the property insurance.
When Nye determined enough was enough, he told SOA that his family wanted
out of the loan. He offered to pay off the entire loan in one payment,
requesting the loan servicer to provide him with the loan history and
the payoff amount. Once he received the information from SOA, he noticed
that there was a discrepancy in the numbers and that he was charged about
$18,000 more than he initially thought. There was also no promissory note
provided by SOA. As a result, he refused to pay the amount of the payoff,
claiming that it was fraudulent. It resulted in a 10+ year lawsuit and
roughly $2.5 million in legal fees.
As the time went on and the legal battle built up, it was more obvious
to Nye that this wasn’t just about the Dallas home. He began to
wonder why the loan servicers would spend millions of dollars in legal
fees just to repossess a home he believed to be worth $160,000 at most.
At the end, the belief was that it was an attempt to cover up a greater
issue, a fraudulent scheme. It became Nye’s mission for years to
come to expose fraud in the banking industry.
At Sulaiman Law Group, LTD, our
Chicago consumer lawyers are dedicated to protecting the rights of our clients. Fraud is a serious
problem and when it happens, the company involved should be held accountable
to the consumers. We utilize extensive experience in the area to protect
your best interests when it matters most, always working to help our clients
walk away from this situation with the resolution they desire. If you
find yourself needing help during a difficult legal battle, especially
when fraud is involved, you can trust that our firm is prepared to help
you navigate the complex process.
If you need legal counsel,
call our firm to discuss your potential claim with our team and learn more about how
our Chicago consumer attorneys can help you.