Bank of America to Pay Largest Ever Settlement for Mortgage Fraud
News came last week that more of the corporate scumbags responsible for wrecking the U.S. and world economy by making worthless loans and selling them as investments to line their own pockets would have to fork over a huge settlement. Unfortunately, those involved are still walking free.
A U.S. Attorney for the Eastern District of New York announced last week that their office had arrived at a settlement agreement by which Bank of America would pay a total of $1 billion to resolve claims that its subsidiary, Countrywide, had engaged in mortgage fraud affecting the FHA.
Since 2009, the government has investigated allegations that Countrywide systematically targeted borrowers who were not qualified and passed on the then-worthless securities to investors around the world. Bank of America acquired Countrywide in 2008.
The investigation uncovered evidence that the lender also used its own appraisers to fraudulently inflate property values, further expanding the fraud. The corporate thieves then packaged up the toxic mortgages and sold them as part of CDOs (Collateralized Debt Obligations) around the world with no concern for the fact they were selling trash.
As the fraudulently instituted mortgages were ultimately insured by the Federal Housing Authority, attorneys for the government argued that Countrywide’s practices resulted in hundreds of millions of dollars in false claims.
The lawsuit was filed under the Federal False Claims Act, a little-known law allowing everyday citizens with evidence of fraud against the government to file lawsuits on the government’s behalf and share in the award.
Although the False Claims Act has been in place since the Civil War, it has been used heavily in recent years to fight fraud by greedy corporations in the defense, mortgage and healthcare industries.
On the positive side, the FCA has resulted in billions of dollars in fines and settlements paid back to the government (and whistleblowers) by greedy corporations. Unfortunately, however, without criminal action putting those responsible in jail, executives often see the fines as a small part of doing business and padding their own pockets.
In this case, the whistleblower who came forward with the evidence to break open the case stands to make tens of millions of dollars or more in awards for their duty,.
If you have any evidence of corporate greed resulting in false claims against our government, contact us today for more information and to learn your legal options.