Big Payout Rings Bank of America Fraud Trial

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Money, not morality, is the principle commerce of civilized nations. - Thomas Jefferson

Edward O'Donnell, a former executive at Countrywide Financial, Inc., may collect up to $1.6 million under an almost forgotten 1980s law. O'Donnell filed a whistleblower suit against the Bank of America last year under the False Claims Act, which empowers whistleblowers to bring cases on behalf of the government against companies that are defrauding the U.S. government. Before trial, the judge dismissed the government's claims under the False Claims Act which terminated O'Donnell's opportunity to collect an award of 15 percent to 30 percent of the penalties collected by the government. Fortunately, O'Donnell also filed a whistleblower claim with the Justice Department under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). 

The case against Bank of America

O'Donnell's complaint alleges that Countrywide Financial Corp, a unit of Bank of America, knowingly issued defective mortgages under its High Speed Swim Lane program and sold them to Fannie Mae and Freddie Mac. As part of the HSSL, Countrywide increased profits by the replacing underwriters with inexperienced loan specialists who were directed to meet quotas at the expense of quality.

What is the FIRREA?

Enacted in the late 1980s during the savings and loan crises, the FIRREA empowers a whistleblower to file a declaration with the U.S. Department of Justice (DOJ) detailing violations of the FIRREA affecting depository institutions. If the DOJ investigation leads to financial penalties, the whistleblower may collect a significant award. Filing under FIRREA has a major advantage in that it provides civil penalties for any number of criminal violations which means the government only needs to prove its case by the civil preponderance of the evidence standard. There is no need to prove loss or damage because the act provides for civil penalties for violations regardless of loss. 

The criminal violations for which a FIRREA civil penalty can be assessed include the following:

  • Mail and wire fraud
  • Bank fraud
  • Corruption, bribery and gifts
  • Utilizing forged, false or counterfeit statements to influence the Federal Depository Insurance Corporation
  • Presenting a false or fraudulent claim to the U.S.
  • Committing fraud or swindles with securities
  • Using a false statement or intentionally overvaluing land, property or security to affect government housing agencies
  • Conspiracy to execute any of the above 

There are numerous federal provisions containing whistleblower provisions in addition to the False Claims Act and FIRREA.  A knowledgeable Dallas whistleblower attorney can guide you through your whistleblower claim.

- See more at: http://www.dallaswhistleblowerlawyer.com/blog/big-payout-rings-bank-of-america-fraud-trial/#sthash.hu2dm3I6.dpuf

Money, not morality, is the principle commerce of civilized nations. - Thomas Jefferson

Edward O'Donnell, a former executive at Countrywide Financial, Inc., may collect up to $1.6 million under an almost forgotten 1980s law. O'Donnell filed a whistleblower suit against the Bank of America last year under the False Claims Act, which empowers whistleblowers to bring cases on behalf of the government against companies that are defrauding the U.S. government. Before trial, the judge dismissed the government's claims under the False Claims Act which terminated O'Donnell's opportunity to collect an award of 15 percent to 30 percent of the penalties collected by the government. Fortunately, O'Donnell also filed a whistleblower claim with the Justice Department under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). 

The case against Bank of America

O'Donnell's complaint alleges that Countrywide Financial Corp, a unit of Bank of America, knowingly issued defective mortgages under its High Speed Swim Lane program and sold them to Fannie Mae and Freddie Mac. As part of the HSSL, Countrywide increased profits by the replacing underwriters with inexperienced loan specialists who were directed to meet quotas at the expense of quality.

What is the FIRREA?

Enacted in the late 1980s during the savings and loan crises, the FIRREA empowers a whistleblower to file a declaration with the U.S. Department of Justice (DOJ) detailing violations of the FIRREA affecting depository institutions. If the DOJ investigation leads to financial penalties, the whistleblower may collect a significant award. Filing under FIRREA has a major advantage in that it provides civil penalties for any number of criminal violations which means the government only needs to prove its case by the civil preponderance of the evidence standard. There is no need to prove loss or damage because the act provides for civil penalties for violations regardless of loss. 

The criminal violations for which a FIRREA civil penalty can be assessed include the following:

  • Mail and wire fraud
  • Bank fraud
  • Corruption, bribery and gifts
  • Utilizing forged, false or counterfeit statements to influence the Federal Depository Insurance Corporation
  • Presenting a false or fraudulent claim to the U.S.
  • Committing fraud or swindles with securities
  • Using a false statement or intentionally overvaluing land, property or security to affect government housing agencies
  • Conspiracy to execute any of the above 

There are numerous federal provisions containing whistleblower provisions in addition to the False Claims Act and FIRREA. 

Topics:  Bank Fraud, Bank of America, Banks, Fraud, Mortgage-Backed Securities, Whistleblowers

Published In: Civil Remedies Updates, Finance & Banking Updates, Government Contracting Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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