Articles Posted in Financial Sector

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The fraud was exposed by a former Academy underwriter.  She received a qui tam whistleblower award of $11.5M.iStock-1093974328-1-300x175

Utah-based Academy Mortgage has paid $38.5 million to settle allegations that it violated the False Claims Act by falsely certifying its compliance with underwriting requirements for federally insured mortgages.

The fraud was exposed by a former Academy underwriter who filed a False Claims Act whistleblower lawsuit alleging that Academy issued numerous loans without regard to whether they met FHA-HUD criteria. She received 30% of the settlement proceeds—$11.5 million—as a whistleblower award.

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Fraud in connection with receipt of federal bailout funds held to be actionable under the False Claims Act

The Second Circuit Court of Appeals has ruled in favor of two financial sector shutterstock_401325058-2-300x134qui tam whistleblowers, reviving their claims under the False Claims Act that Wells Fargo lied about its financial condition in order to get billions of dollars in low-interest emergency bailout funds from regional Federal Reserve Banks during the Financial Crisis.

The whistleblowers–who were former employees of Wells Fargo–alleged that the financial institution falsely certified that it was adequately capitalized and in compliance with applicable banking and mortgage lending laws when it requested billions of dollars in emergency loans from the Fed’s Discount Window and Term Auction Facility. As a result, it could get interest rates on the borrowed funds that were much lower than those for which it would otherwise have qualified.

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