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FIRREA 4 articles

Federal Jury Awards U.S. $92 Million In Allied Mortgage Fraud Case

A Texas federal court jury awarded the U.S. government about $92 million in a False Claims Act case brought against Allied Capital and bank principal Jim Hodge by a whistleblower who accused the company and some affiliates of knowingly originating and underwriting more than a thousand home loans that did not meet the Federal Housing Administration’s (FHA) insurance requirements. The U.S. Department of Justice intervened in the case in 2011, the same year a whistleblower filed it in a New York federal court, naming both Allied Home Mortgage Capital and Allied Home Mortgage Corp. as defendants. The government moved the ... Read More

JPMorgan, U.S. reach record $13-billion settlement over mortgage and securities fraud

The U.S. Justice Department announced Tuesday that it reached a record $13-billion agreement with JPMorgan Chase to resolve allegations that it knowingly sold faulty mortgage investments that contributed to the 2008 financial crisis. The settlement is the largest settlement between the U.S. government and a single entity in history, the Justice Department said, and the largest sum ever paid by an American company. As part of the settlement, JPMorgan admitted it made serious misrepresentations to the public, including the investing public, about its numerous mortgage-backed securities transactions. The resolution also requires JPMorgan to provide$4 billion in relief, included in the ... Read More

Amid newer whistleblower laws, False Claims Act remains top fraud fighter

Earlier this month, health care conglomerate Johnson & Johnson agreed to pay the U.S. government more than $2.2 billion in criminal and civil fines to resolve whistleblower accusations that it illegally promoted its antipsychotic drug Risperdal to children, the elderly, and people with developmental disorders. The settlement, one of the largest in U.S. history involving health care fraud, demonstrates that the federal False Claims Act remains the government’s most powerful tool in recovering taxpayer funds taken from government-subsidized programs through fraudulent practices. On November 4, the U.S. Justice Department announced it had reached an agreement with Johnson & Johnson to ... Read More

Whistleblower may receive $1.6 million reward for exposing Countrywide mortgage fraud

A former Countrywide executive who exposed questionable lending practices at the company may collect a $1.6-million dollar reward under a 1989 law that was passed amid the savings and loan (S&L) crisis. Edward O’Donnell filed a whistleblower complaint in February 2012 under the federal False Claims Act, which allows individuals to sue on behalf of the U.S. government when they have witnessed fraud against taxpayer-funded programs. In return, whistleblowers share 15 to 30 percent of the recovery. The U.S. intervened in the lawsuit in October of the same year. Mr. O’Donnell alleges Countrywide, a division of Bank of America, fraudulently ... Read More