Struggling auto finance company Ally Financial Inc. had a run-in with the FBI. The Detroit News reports that, according to a search warrant made public Monday, the FBI seized one of Ally’s computers from the company’s headquarters in Detroit, Mich. The reason for FBI involvement in the affairs of the taxpayer-backed company currently remains unknown to the public.
Seizure witnessed by Ally attorney
According to documents filed in U.S. District Court in Detroit, federal authorities entered the premises of Ally Financial’s main office at Renaissance Center on March 28 and seized an iMac computer. The search and seizure was conducted with Ally Financial attorney Drema Kalajian present.
Documents indicate that assistant U.S. Attorney Terrence Berg, who has a background in computer-based crime, is spearheading the ongoing federal investigation of Ally Financial Inc. Berg is joined by FBI Special Agent Ted Jungkuntz, who is also classified as an expert with computer networks and network security. The Detroit News notes that Jungkuntz has previously been booked as a speaker on the topics of counterfeiting and intellectual and proprietary property.
Neither Berg nor Jungkuntz has offered comment to the press regarding the nature of the FBI’s search and seizure of the Ally Financial computer. According to Bloomberg, a spokeswoman for Ally has also withheld comment on the incident.
U.S. Treasury owns 74 percent of Ally
Ally Financial Inc. received $17.2 billion during the recession bailouts. As a direct result, the auto finance and mortgage lender is owned by the U.S. Treasury and taxpayers. That level of ownership totals 74 percent. Ally remains the largest new car loan originator in the U.S. It also provides dealer financing to more than 60 percent of all General Motors Co. and Chrysler Group LLC dealerships.
Ally Bank, the online banking arm of the company, currently has almost 1 million consumer bank accounts on file, with total assets of $45 billion. It is the nation’s largest new car lender, and its online banking arm, Ally Bank, has almost 1 million customer bank accounts with $45 billion in assets. Ally Financial is also a mortgage lender and insurance company.
Backing away from mortgages
According to Bloomberg, Ally Financial Inc. is now backing away from the mortgage business. Reports indicate that the finance company will cease all underwriting and trading of mortgage-backed securities and will dismiss nearly all of its 33 mortgage traders and analysts.
In a corporate statement, Ally noted that it “will be winding down that operation in an orderly manner over the coming weeks. These activities are no longer strategic for Ally.”
Ally Financial’s efforts to repay taxpayer bailout money once hinged upon Ally’s ability to make a good showing in an initial public offering. Ally CEO Michael Carpenter once predicted that the company would be valued at $30 billion. The IPO has not materialized, however. Carpenter has since noted that in order to sell Ally as the U.S. Treasury has recommended, the problem of its mortgage arm losing money would have to be addressed. Insiders predict that bankruptcy may be coming for Ally’s mortgage arm.