Bank of Internet accused of wrongdoing by ex-auditor whistleblower
Bank of Internet USA is being sued by a former internal auditor, who alleges that the bank cut corners as it grew rapidly.  Matt Euhart says that he was fired after he reported what he believed to be wrongdoings by Bank of Internat to federal regulators and management at the bank, and is claiming it violated federal laws that seek to protect whistleblowers.  Bank of Internet USA, which has $6bn in assets and was one of the first banks to offer banking services exclusively on the Internet, has become one of the country's top-performing banks by providing high-cost mortgages to wealthy indviduals with complex finances.  However, critics of the bank say it is not making sufficiently thorough checks on borrowers, adding that many might be more indebted than the bank's files suggest.  Bank of Internet's CEO, Gregory Garrabrants, denies the allegations.

Bank of Internet USA has become one of the country’s top-performing banks by churning out high-cost mortgages to wealthy individuals with complex finances.

But in a federal lawsuit filed on Tuesday, a former internal auditor of the bank contended that Bank of Internet was cutting corners as it grew at a rapid pace.

The auditor, Matt Erhart, said in the suit that he was fired after revealing what he believed to be wrongdoing at the bank to federal regulators and management at Bank of Internet. The complaint, filed in federal court in the Southern District of California, said that Bank of Internet violated federal laws that seek to protect whistle-blowers.

“As a former federal prosecutor and long time employment lawyer, I find the bank’s conduct as alleged here to be among the most egregious I have seen from a publicly traded company,” Carol Gillam, Mr. Erhart’s lawyer, said in a statement.