Archive for the ‘FHA fraud’ Category
Wednesday, May 23rd, 2012
Last week the Manhattan U.S. Attorney’s Office announced a $202.3 million settlement with Deutsche Bank’s AG mortgage unit for reckless mortgage lending practices. This is the third major bank settlement related to mortgage fraud by the Manhattan U.S. Attorney’s office in 2012, having announced a $158.3 million settlement with Citibank in February and a $132.8 million settlement with Flagstar Bank FSB in March.
Both the Citibank and Flagstar settlements were the result of whistleblower claims filed under the False Claims Act.
In February, the Brooklyn U. S. Attorney’s Office announced a $1 billion settlement with Bank of America related to improper mortgage practices. Part of that settlement included a settlement of two whistleblower actions that had been filed against Bank of America for mortgage fraud.
These cases highlight the importance of whistleblowers and the False Claims Act in continuing to combat financial improprieties at the banking institutions. It also suggests that more mortgage fraud cases brought by whistleblowers will be forthcoming given the success that both the Manhattan and Brooklyn U.S. Attorney’s Offices have experienced working with whistleblowers in this arena.
If you have knowledge of Securities Fraud and would like to discuss the possibility of a whistleblower award under the SEC whistleblower program, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, including your ability to remain anonymous in filing for an award, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
Tags: bank fraud, bank whistleblower, doj investigations, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, mortgage whistleblower, mortgage whistleblower award
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, Uncategorized | Comments Off
Tuesday, March 13th, 2012
Another whistleblower lawsuit with ties to the $1 Billion False Claims Act Bank of America settlement announced on February 9, 2012 by the United States Attorney’s Office for the Eastern District of New York has been unsealed. The suit charges the bank with fraud violations under the Home Affordable Modification Program (“HAMP”).
Gregory Mackler, a former contractor with the servicing outsourcerUrban Lending Solutions, filed the lawsuit in July. The lawsuit charges BofA with developing procedures that kept trainees like Mackler from researching or resolving any HAMP inquiries or complaints in order to avoid millions of dollars in losses while benefitting from the financial incentives of the program. The Treasury Department paid $1.8 billion in HAMP servicer incentives through December, according to the special inspector general of the Troubled Asset Relief Program.
In February, a whistleblower complaint was unsealed from Kyle Lagow, a former employee in a Countrywide appraisal unit which detailed allegations of Countrywide’s “corrupt underwriting and appraisal process. Final settlement documents have yet to be filed in the BoA settlement, which the U.S. Attorney’s Office said was the largest ever False Claims Act payout related to mortgage fraud.
If you have knowledge of Corporate Fraud, including Mortgage Fraud, and would like to discuss the possibility of a whistleblower award under the False Claims Act, please contact our whistleblower attorneys today. Kenney & McCafferty will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys regarding your case are confidential and protected by attorney-client privilege.
The Department of Justice has until March 16 to decide whether to intervene in the Mackler and Lagow cases.
Tags: bank whistleblower, False Claims Act, FERA, mortgage whistleblower, Qui Tam
Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, Recent News | Comments Off
Tuesday, March 6th, 2012
Reuters has reported that the eleven bank subpoenas issued in January by DOJ expand upon previous document requests by the SEC in its ongoing investigations into improprieties relating to the packaging of residential mortgage securities.
According to the Reuters report, people who have reviewed the subpoenas state that the civil subpoenas ask for documents related to every residential securities offering between 2006 and 2008, including Fannie Mae and Freddie Mac bonds.
The SEC investigation that has been ongoing appears to have been limited to private offerings and did not include Fannie Mae or Freddie Mac bonds. The DOJ subpoenas have also apparently broadened the time period beyond the initial period being investigated by the SEC.
The investigations by the DOJ and the SEC appear to be a part of an inter-agency task force the government has organized to coordinate parallel efforts on current and future investigations. In January, SEC enforcement director Robert Khuzami said that his agency had already reviewed 25 million pages of documents as part of ongoing investigations into residential mortgage-backed securities.
Three firms, JPMorgan Chase & Co, Goldman Sachs Group Inc, and Wells Fargo & Co, have now disclosed that they have already received Wells notices from the SEC related to the SEC residential mortgage backed securities investigations. A Wells notice alerts putative defendants that the SEC is considering bringing charges and gives them a chance to rebut the allegations.
The Wells notice indicate that the SEC’s investigation against these three banks has matured to point that SEC charges should be forthcoming. However, the new round of broader DOJ subpoenas indicates that the government investigations will continue and possibly expand.
Tags: bank fraud, doj investigations, mortgage fraud, sec fraud, sec investigations
Posted in Bank Fraud, bank whistleblower, corporate fraud, FHA fraud, government fraud, mortgage fraud, SEC Whistleblower Program, Uncategorized | Comments Off
Friday, March 2nd, 2012
This week the United States Attorney’s Office for the Southern District of New York (Manhattan) announced that it had settled another major mortgage fraud case against a lending institution. Under the terms of the settlement agreement, Flagstar Bank FSB has agreed to pay $132.8 million in damages and penalties under the False Claims Act for improperly approving residential home mortgage loans for government insurance.
Manhattan U.S. Attorney Preet Bharara stated, “[This] is another stark example of how certain lenders put profit ahead of responsibility by recklessly churning out mortgage loans without regard to the risk that those loans would default or the significant consequences for the individual homeowners who would inevitably default on their loans, the housing market, and in the aggregate, our nation’s economy.”
On February 15, 2012, Bharra announced that Citicorp Inc.’s Citimortgage unit had agreed to pay $158.3 million to settle claims tied to mortgage fraud related to the federal home-loan insurance program. That false claims action filed by a whistleblower alleged more than six years of misconduct in connection with the Federal Housing Administration Direct Endorsement Program.
Both these cases come on the heels of a $1 billion settlement with the government announced by the Bank of America that relates at least in part to a False Claims Act case filed by a whistleblower alleging mortgage fraud. That case was unsealed last Friday in the Eastern District of New York (Brooklyn).
These cases are part of an overarching investigations by the United States Attorney’s Offices for the Southern (Manhattan) and Eastern (Brooklyn) Districts of New York into the fraudulent banking practices that occurred over the past decade.
Mortgage fraud will continue to be a focus of these investigations because of the billions of dollars in losses suffered by HUD, FHA, Fannie Mae and Freddie Mac as a result of the rampant mortgage fraud that was orchestrated by national banks during that time. This is a target rich environment for the government with many potential whistleblowers who will no doubt continue to come forward exposing the environment that led to these frauds over the last decade.
Tags: bank fraud, bank whistleblower, False Claims Act, FHA fraud, HUD fraud, mortgage fraud
Posted in Bank Fraud, bank whistleblower, False Claims Act, FHA fraud, government fraud, HUD fraud, mortgage fraud | Comments Off