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The subprime mortgage business is risky enough, even without throwing in allegations of fraud against a fugitive who was shot in the head last year in Norway by a disgruntled business associate. Last week, the U.S. Court of Appeals for the 4th Circuit affirmed a $161 million jury verdict for the Federal Deposit Insurance Corp. in its suit over the implosion of First National Bank of Keystone, one of the costliest bank failures in U.S. history. The bank in West Virginia coal country collapsed in 1999, raking up an estimated $750 million to $850 million in losses. Harald Bakkebo and several co-conspirators convinced bank officials to invest hundreds of millions of dollars in a risky loan securitization enterprise involving the purchase of subprime home loans. Bakkebo � a native of Norway who fled there in 1999 to avoid criminal prosecution in an unrelated insurance fraud scheme in Louisiana � was shot and killed last year. The FDIC, which was represented by in-house attorney Jaclyn Chait Taner, may not see much of the $161 million judgment because the FDIC is proceeding under Norwegian law to seize his estate there from Bakkebo’s two sons.
Brendan Smith can be contacted at [email protected].

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