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July 27, 2014

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Ex-mortgage firm chief guilty in Vegas fraud case

The 75-year-old former president and CEO of a Nevada loan servicing firm has taken a plea deal in a scheme that federal prosecutors say cost Wells Fargo & Co. more than $8 million.

Justice Department officials say former U.S. Mortgage chief Earl Gross pleaded guilty to bank fraud Tuesday in Las Vegas. The charge stems from allegations that from 2004 to 2009, the company illegally withheld funds due to Wells Fargo Bank for homeowners who paid off their loans.

Gross had faced fraud and false statement charges in a February 2012 indictment.

He's agreeing to forfeit $8.4 million to the government and could face 30 years in prison at sentencing Sept. 19.

Defense attorney Paola Armeni says she'll seek a lesser sentence taking into account Gross' age and health.

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