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Archive for May, 2012

Former Countrywide Home Appraiser Receives $14.5 Million Whistleblower Reward

Wednesday, May 30th, 2012

A former home appraiser for Countrywide (“Countrywide”) Financial will receive a $14.5 million whistleblower reward in connection with a qui tam lawsuit that alleged Countrywide fraudulently inflated appraisals on government insured loans.  

The Countrywide qui tam suit, filed by Mr. Kyle Lagow in 2009, was one of five whistleblower complaints that were settled as part of the $25 billion national mortgage settlement that state and federal officials reached with Bank of America and four other lenders this year. Mr. Lagow’s suit was settled for $75 million.

All five qui tam complaints were brought under the whistleblower provisions of the federal False Claims Act, which is a longstanding federal statute that authorizes a private citizen with knowledge of fraud being perpetrated on the federal government to bring a lawsuit on the government’s behalf.  If the whistleblower’s suit is successful, the whistleblower may be entitled to up to 30% of the government’s monetary recovery.  The False Claims Act also provides for certain protections for employees who are subjected to retaliation for reporting fraud.

Kenney & McCafferty lawyers are experienced in the area of mortgage fraud.  If you have knowledge of mortgage fraud and would like to discuss the possibility of a whistleblower award, please contact our 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 the attorney-client privilege.

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Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, government fraud, mortgage fraud, Recent News, retaliation, Whistleblower Protection | Comments Off

DID YOU SIGN AN EMPLOYMENT RELEASE WAIVING YOUR WHISTLEBLOWER CLAIM? EVEN IF YOU SIGNED A RELEASE, YOU MAY NOT HAVE LEGALLY RELEASED YOUR CLAIM.

Wednesday, May 30th, 2012

In order to provide an employee with a severance or layoff payment, employers now commonly require their employees to sign a Release which releases or waives all possible claims against their employer for wrongful termination, age discrimination or any other type of lawsuit that employees commonly file against employers. These releases are typically very broad and make clear that employees are releasing all claims during the entire period of employment that has anything to do with their employment.

Employers that do business with the federal and state governments or are involved in Wall Street-type finance are also now sometimes including references to whistleblower claims or even in some cases specific references to the False Claims Act (a federal law pertaining to government contractor fraud) or the Dodd-Frank law (a federal law pertaining to Wall Street-type fraud) in these employment releases.

For employees losing their jobs and concerned that they may not be able to find other employment quickly, it is natural and understandable for that employee to go ahead and sign the Release to receive their severance pay, even if they believe that they might have had a good whistleblower claim.

If you did sign such a Release and believe that you do have a good and current whistleblower claim, you may not be out of luck. Under specific circumstances that are too detailed to get into here, you may be able to pursue a whistleblower claim even if you have already signed an employment Release and even if you have already received your severance pay!

If you believe you have a good whistleblower claim, but are concerned that you may have recently signed an employment Release (or are about to sign such a Release) waiving your claim, call the attorneys at Kenney & McCafferty Law Firm and find out whether you can still pursue a whistleblower claim. The attorneys at Kenney & McCafferty are experienced in dealing with this specific issue and will help you figure out whether you can still pursue your whistleblower claim.

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Posted in False Claims Act, government fraud, retaliation, Uncategorized, Whistleblower Protection | Comments Off

Justice Department Expands Efforts to Uncover Mortgage Fraud

Wednesday, May 30th, 2012

On Thursday, May 24, 2012, the Justice Department’s Residential Mortgage-Backed Securities (RMBS) Working Group announced new resources in the ongoing efforts to investigate and uncover mortgage fraud and abuse that helped precipitate the 2008 financial crisis. These efforts include the launch of a new whistleblower website to report fraudulent activities in the mortgage-backed securities market. The Working Group wants to hear from people “who worked in the RMBS market who acted responsibly but who also may have witnessed greed and misconduct that crossed the legal line and created havoc for investors, homeowners and our economy.” These market participants include loan originators, sponsors, underwriters, trustees, and others.

The RMBS working group was established by Attorney General Eric Holder in January and has been dedicated to initiating, organizing and advancing new and existing investigations by federal and state authorities into fraud and abuse in the RMBS market. The RMBS Working Group is a collaborative effort focused on investigating potential false or misleading statements, deception or other misconduct by market participants in the creation, packaging and sale of mortgage-backed securities.

While the Justice Department said the group’s efforts are law enforcement sensitive and, as a result, must remain confidential, generally it continues to: identify specific RMBS offerings for priority investigation through the use of various forensic tools including risk-based analytics; analyze pending private RMBS litigation throughout the country for evidentiary connections to existing law enforcement investigations; and convene operational meetings among investigators, attorneys, analysts and RMBS market experts and insiders.

Associate Attorney General Tony West said that “although the working group … [has] done a tremendous amount of investigative work already – including having issued more than 25 civil subpoenas – we know that hearing from insiders is particularly valuable.” Substantial financial rewards may be available to whistleblowers who provide specific information if that information leads to a monetary recovery by the government.

If you have knowledge of mortgage fraud and would like to discuss the possibility of a whistleblower award, 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.

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Posted in Bank Fraud, bank whistleblower, False Claims Act, government fraud, mortgage fraud, Recent News, SEC Whistleblower Program | Comments Off

Mortgage Fraud And Whistleblowers

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.

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Posted in Bank Fraud, bank whistleblower, corporate fraud, False Claims Act, FHA fraud, HUD fraud, mortgage fraud, Uncategorized | Comments Off

SEC Disputes Story That It Blew Whistleblower’s Identity

Sunday, May 6th, 2012

In a recent article entitled “Source’s Cover Blown by the SEC,” the Wall Street Journal claimed that the SEC “inadvertently revealed the identity of a whistleblower.”  The alleged disclosure occurred during the SEC’s investigation of Pipeline Trading Systems LLC.  According to the article, an SEC lawyer “showed an executive who was being questioned a notebook from the whistleblower filled with jottings about trades, calls and meetings.”  From that notebook, the executive claims he recognized the handwriting as that of Peter Earle, who happened to be the whistleblower who prompted the SEC’s investigation.

In a scathing response to the Journal’s story, the SEC disputes the allegations against it.  In stark contrast to the story told by the Journal, the SEC asserted that it “in no way exposed Peter Earle as a whistleblower.”  In fact, the Commission claims that the use of the notebook was neither “inadvertent” nor a “breach.”  Instead, it was a “deliberate decision,” discussed by an SEC lawyer and his supervisor prior to the deposition in which the notebook was exhibited.

Going further, the SEC strongly disagrees with the allegation that the use of the notebooks in no way comprised Mr. Earle’s identity.  According to the SEC, “it was widely known…that, after the termination of his employment in 2009, Mr. Earle had approached the SEC – a fact volunteered by witnesses and acknowledged by Mr. Earle long before the exhibition of his notebooks in November 2010.”  Yet, despite this knowledge, the SEC maintains that, throughout the investigation, the Commission treated his status as a cooperating witness as confidential.  There was “nothing about the notes…or about the SEC’s use of them as exhibits…that revealed anything about whether Mr. Earle or others were cooperating in the SEC’s investigation.”

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.

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Posted in SEC Whistleblower Program | Comments Off

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