Whistleblower News & Articles
Yesterday DOJ announced that JPMorgan Chase & Co. agreed to pay $614 million to settle mortgage fraud claims under the False Claims Act. The suit involves JPMorgan’s fraudulent mortgage practices that generated losses in the recent financial crisis. The government has already recovered billions of dollars from U.S. lenders to cover mortgage-related claims and this most recent case serves as an example of the powerful role of whistleblowers and the False Claims Act.
Keith Edwards, a whistleblower, filed suit under the False Claims in January 2013. The settlement stemmed from JP Morgan’s fraud in mortgage programs run by the Federal Housing Authority and the Department of Veterans Affairs. The programs authorized lenders to approve mortgages for insurance or refinancing by the government. But JPMorgan acknowledged it committed mortgage fraud by approving thousands of sub-standard loans. The loans similarly failed to meet program requirements.
Mr. Edwards’s share has yet to be revealed. However, he is eligible receive up to 25% of the settlement under the False Claims Act. That equates to a potential $150 million for his work exposing the fraud and reclaiming government losses from the loans.
The U.S. government continues to pursue matters relating to mortgage fraud. The U.S. Attorney’s Office in Manhattan has brought eight civil suits since May 2011. Meanwhile the Department of Justice has reportedly filed more than 10,000 financial fraud cases against nearly 15,000 defendants. These include more than 2,700 mortgage fraud defendants.
Moreover, earlier this week, Morgan Stanley reached a $1.25 billion settlement with the United States (through the conservator of Fannie Mae and Freddie Mac) and a number of states to resolve claims that the bank sold faulty bonds.
May 31, 2013
The False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) are the primary civil statutes being wielded by the government as it seeks to recover...