The Financial Institutions Reform, Recovery and Enforcement Act of 1989 has a little known provision that allows a whistleblower to report instances of bank and financial institution fraud. The law allows private individuals to submit confidential claims to the Department of Justice. The department can then investigate and use its enforcement powers to recover penalties or damages,
Citigroup agreed to resolve securities fraud charges in relation to its sale of mortgage-backed securities for a whopping payment of $285 million. Goldman Sachs and JP Morgan Chase & Co. settled similar claims with the SEC last year. At the time of sale, those securities produced $126 million in profit for Citigroup’s brokerage subsidiary and $34 million in fees.
Massachusetts Attorney General Martha Coakley has announced that she will oppose the inclusion of MERS (Mortgage Electronic Registration System) issues in the $20 billion mortgage settlement deal proposed by the Department of Justice. The deal would release the banks from legal claims in state investigations and lawsuits. Despite pressure from the Department of Justice to sign on to the settlement,
The new attorney general in New York, Eric Schneiderman, is taking an aggressive lead in the inquiries by state officials concerning banks overcharging state and local pension funds for foreign-exchange currency transactions over the past decade. Schneiderman is investigating Bank of New York Mellon Corp.’s (“BNY Mellon”) charging of New York pension funds for thousands of transactions.
In a speech delivered on Monday, May 24, 2011, California Attorney General Kamala Harris promised that her newly-formed Mortgage Fraud Strike Force would employ the state’s “robust” False Claims Act to hold those who commit mortgage fraud accountable.
“We are prepared to use it in a way that will look at all those who have made false statements or misled investors of any nature – be they individuals,
According to a report in the Huffington Post, recent confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans. Five separate investigations conducted by the Department of Housing and Urban Development’s inspector general examined Bank of America,
Changes to the law in 2006 guaranteed whistleblowers between 15 and 30 percent of any IRS recovery based upon information provided by a whistleblower. More recent changes guarantee that the IRS receives its cut of these whistleblower payouts. The IRS has announced that it intends to withhold taxes from the whistleblower award payments that it makes.
On October 26, 2010, the Washington State Investment Board announced that it will receive $11.7 million in a settlement with its former master custodian, State Street Bank. The dispute between the Board and State Street concerned the execution of certain foreign exchange transactions by the bank on behalf of the Investment Board,
A former loan officer for Bank of America has sued the company for taking money from borrowers who were seeking to refinance their mortgages and then failing to follow through by actually processing the applications. Linda Langlois, 58, began working for the Bank in August, 2009, and processed several applications for refinances daily,
The Internal Revenue Service (“IRS”) recently reported an increase in the number of whistleblower complaints it has received under the new IRS Whistleblower Law that was enacted in 2006. The IRS Whistleblower Law enables private individuals to report: (1) underpayments of tax; and (2) persons otherwise guilty of violating the internal revenue laws.
If you are aware of any person, corporation or entity that you think may be violating the Federal False Claims Act or a State False Claims Act, contact us today.