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By Root 3593 0

Mital insisted that Ameriquest could still succeed with its new model, and that growth would be steady. But it turned out “Eric” was right, either because Ameriquest couldn’t operate profitably under its agreement with the AGs or because it couldn’t operate at all. For instance, an appraiser Ameriquest hired to help clean up its practices discovered that in New York the company’s loan officers were paying huge sums to a group of appraisers—all of whom worked for the same outside firm—and these appraisers were consistently valuing the homes at 100 percent of the value that the loan officers had assigned the properties. (Inflated appraisals were one of the most common forms of fraud during the housing bubble.) Upon further digging, he discovered that the owner of the outside firm was the wife of one of Ameriquest’s employees. And while Ameriquest was supposed to install a new system that ferreted out appraisal fraud in its four new call centers, this person says that the company made a decision not to install it in its Sacramento office.

By late 2006 Ameriquest was searching for a buyer, and by early 2007 ACC was running low on cash. Then came a revealing moment, one that gave a glimpse into just how clever Roland Arnall could be. In 2004, he had invited Deval Patrick—the same Deval Patrick who had led that early Justice Department investigation into the lending practices at Long Beach—to join ACC’s board. Patrick was paid $360,000 a year. He resigned from the board two years later to run for governor of Massachusetts, and he won. In March 2007, as ACC was flailing, Governor Patrick made a call on behalf of Arnall. According to the Boston Globe, he phoned Robert Rubin, who was then the vice chairman of Citigroup and someone Patrick knew from the Clinton administration. A week after the call, Citigroup agreed to put fresh working capital into ACC. Arnall also contributed some of his personal wealth to keep the company going.

By the fall of 2008, Ameriquest had been shut down; Citigroup took over the $45 billion portfolio of loans that needed to be serviced from ACC’s Argent division. Patrick later apologized for making the call, acknowledging that “financial exploitation of the poor, elderly, and minorities [was] pervasive at Ameriquest.” But that call, as it turned out, wasn’t the only favor he did for Arnall.

In 2008, the OCC put together a document called “Worst Ten in the Worst Ten.” It listed the ten worst lenders in the ten metropolitan areas with the highest rates of foreclosure. The document vividly displayed the havoc that Arnall’s companies were wreaking on the American landscape. There were a total of twenty-one companies on the ten lists. Arnall’s Argent made the top ten in all ten cities, and was number one in Cleveland and Detroit. Long Beach made nine of the ten lists, landing the top spot in Sacramento, Stockton, Memphis, and Denver. And Ameriquest made seven of the ten lists, despite having slowed down its lending significantly since the settlement with the state attorneys general. (ACC says that it is “unfair and inaccurate to tie” Long Beach to Arnall’s other companies, given that ACC had severed its links to Long Beach more than a decade before the OCC’s report.)

And yet, at the time, it was as if the Ameriquest investigation and settlement had happened in a parallel universe. In the spring of 2005, after the Los Angeles Times exposé had been published but before the big AG settlement, President Bush nominated Arnall to be the U.S. ambassador to the Netherlands. Maybe this shouldn’t have been a surprise—according to the Los Angeles Times, between 2004 and 2008 Arnall and his wife, Dawn, raised and gave more than $12 million to GOP causes and candidates. The donations included $5 million from Dawn to the Progress for America Voter Fund, which shared some donors with the Swift Boat ads that helped bring down the 2004 Democratic presidential candidate, John Kerry. Shortly after winning reelection, Bush announced the appointment of the Arnalls as honorary cochairs of the inaugural fund-raising committee.