Global recession warning: Whistleblower’s shock claims on collapsed bank exposed

As the general public grows increasingly fearful about the state of the economy during the ongoing lockdown, critics are comparing the inevitable financial effect to the global crisis of 2008. The Daily Express ran with a front page on April 1 which read ‘We bailed you out, now do your duty!’, addressing how banks should “repay the favour” of the 2008 taxpayer bailout. The crisis stemmed from the collapse of the Lehman Brothers bank, which went bankrupt with a total of $631billion (£502billion) of debt in 2008.

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In a 2019 BBC documentary, ‘Inside Lehman Brothers: The Whistleblowers’, those from within the company claimed they were threatened when they considered exposing the bank’s impending fall.

Sylvia Vega-Sutfin worked for the Lehman Brothers’ subsidiary, BNC mortgage, which provided subprime mortgage loans with higher interest rates.

According to the former account executive, the bank would falsify information about homeowners, meaning it could sell loans to investors for a greater price.

She claimed this led to increased interest rates and people being unable to make their repayments.

A whistleblower, Linda Weekes, who used to work with the Lehman Brothers

A whistleblower, Linda Weekes, who used to work with the Lehman Brothers (Image: BBC/Getty)

 Ms Vega-Sutfin was a former account executive for the firm between 2004 and 2005

Ms Vega-Sutfin was a former account executive for the firm between 2004 and 2005 (Image: Getty)

Ms Vega-Sutfin worked for the firm between 2004 and 2005. She alleged that she realised the bank was committing fraud after discovering a document explaining a worker from KFC was making $7,000 per month.

The former account executive told the documentary how her situation went from “bad to unimaginably worse” after $30million (£24million) worth of loans – which she was supposed to manage – disappeared.

She explained: “How is it possible that $30million plus in loans are gone?”

The whistleblower then claimed: “[My employer] wanted to destroy my credibility. So my credibility would be tarnished in front of another employer.”

The whistleblower then attested that new management was brought in to intimidate the staff.

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Linda Weekes also worked at CNB Mortgages

Linda Weekes also worked at CNB Mortgages (Image: Getty)

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Former senior underwriter Linda Weekes, who worked with BNC Mortgage between 2004 and 2005 too, was also a whistleblower.

She had similar claims to Ms Vega Sutfin, and said that the new management “walked in our office like the mafia”.

Ms Weekes added: “They were like arm-to-arm, marching in, like ‘we’re taking over the world’.”

Ms Vega-Sutfin claimed she felt particularly threatened on her final day in the office.

She explained: “On the particular day I was leaving the office, I got to the person who would harass me and threaten my life.

“I shook hands with him and when I went to leave he wouldn’t let go off my hand.

“He pulled me towards him and he whispered in my ear: ‘I know everything about you.

“‘I know where your daughters go to school, I know where they live.

“‘I own you!’”

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The Lehman Brothers' had several whistleblowers to spoke to the BBC

The Lehman Brothers’ had several whistleblowers to spoke to the BBC (Image: Getty)

Many fear the coronavirus pandemic will trigger a similar crash to that of 2008

Many fear the coronavirus pandemic will trigger a similar crash to that of 2008 (Image: Getty)

Other employees also suggested the same man was being “inappropriate” with them in the workplace in an attempt to scare them later in the documentary.

Ms Vega-Sutfin claimed: “People who are like them, who hire [other] people to come in and do dirty work, that those people want to see you down.

They’re not going to shoot me, they’re not going to run me off the road.

“They want to see me afraid.”

She explained how that same day, when she arrived home, she discovered her belongings had been moved around.

Richard Flud, former chair of Lehman Brothers

Richard Flud, former chair of Lehman Brothers (Image: Getty)

She said: “People were letting me know, ‘hey we’ve been in your house’.”

The whistleblower said she went on to live in constant fear, which changed her whole life.

Ms Vega-Sutfin claimed it was a “devastating way to live”.

She alleged in the documentary that she was advised by her attorney to move house and change state, but she claimed she was determined not to “run from anybody”.

The whistleblower pinned the substantial change in her life on her former employers.

She claimed: “These guys, Lehman Brothers, it’s right there – they changed who I was.

Lehman Brothers' collapse triggered the 2008 financial crash

Lehman Brothers’ collapse triggered the 2008 financial crash (Image: Getty)

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“They didn’t get my soul, but they changed who I was. There is no money that’s going to compensate me, ever.”

She said the only compensation she wants is for the people at the top to be punished but suggested that was “never going to happen”.

The former account executive never returned to work, but took on a 14-year legal battle against Lehman Brothers with five other former employees.

The group was awarded a $5million (£4million) settlement in August last year, for damages for discrimination, emotional stress and harassment.

Lehman Brothers CEO Richard Fuld has not been charged with a crime related to the bank’s collapse.