A Pennsylvania couple hit Citibank NA and a slew of private
mortgage insurers with a putative class action Thursday alleging
they schemed to push fraudulent reinsurance on home mortgages that
involved illegal kickbacks and referral payments with other
Citibank and the insurers enacted a "captive reinsurance scheme"
in which the insurers paid Citibank illegal referral payments in
the form of purported reinsurance premiums, and Citibank received
an unlawful split of private mortgage insurance premiums paid by
the insurers' customers referred by Citi entities, according to
homeowners Linda and Vincent Menichino's complaint.
Both activities violated the Real Estate Settlement Procedures Act
of 1974, they allege.
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