Former auditor sues Bank of Internet

Bank of Internet USA has become one of the country’s top-performing banks by churning out high-cost mortgages to wealthy individuals with complex finances. But a former internal auditor of the bank has filed a federal lawsuit contending that Bank of Internet was cutting corners as it grew at a rapid pace.

The auditor, Matt Erhart, said in the suit that he was fired after revealing what he believed to be wrongdoing at the bank to federal regulators and management at Bank of Internet. The complaint, filed in federal court in the Southern District of California, said Bank of Internet violated federal laws that seek to protect whistleblowers.

Carol Gillam, Erhart’s lawyer, said: “As a former federal prosecutor and longtime employment lawyer, I find the bank’s conduct as alleged here to be among the most egregious I have seen from a publicly traded company.”

Gregory Garrabrants, Bank of Internet’s chief executive, said the allegations were groundless: “The factual inaccuracies here are numerous and substantial. Mr. Erhart has made all of these allegations in great detail to federal regulators, who have reviewed them in depth and have found them to be wholly without merit.”

The New York Times