Lawyers in our firm continue to investigate violations of the False Claims Act across the country. A violation of the False Claims Act occurs when any person, business, or entity defrauds the federal government of the American taxpayers’ money. False Claims Act violations are generally reported by internal whistleblowers who step forward and do the right thing by reporting the fraud. Successful whistleblowers are entitled to a portion of the damages recovered by the federal government.
The majority of large Wall Street banks received a government bailout of taxpayers’ money as a result of the Troubled Asset Relief Program (TARP). Without TARP funds, these large banks would have not survived the Great Recession. Despite receiving taxpayers’ money, several large banks are still conducting questionable and illegal mortgage practices that greatly contributed to the Great Recession and led the TARP Program in the first place.
One such bank is Citigroup. This big bank settled with the federal government and Sherry Hunt, former employee and whistleblower, in February 2012 for $158.3 million to resolve a False Claims Act case. Mrs. Hunt received $31 million out of the settlement paid by Citigroup for her role as the whistleblower.
Mrs. Hunt was a Vice President at Citigroup and was responsible for overseeing mortgage underwriters. Her duties included protecting Citigroup from fraud and bad investments. She witnessed mortgages with doctored tax forms, phony appraisals, missing signatures and other missing documents required by law. She witnessed this conduct before, during, and even after the financial crisis and into 2012. When Mrs. Hunt was asked to reduce her reports of defective loans, she refused to lie and decided to file a False Claims Act complaint. Five months later, in January 2012, the Justice Department intervened in her case and Citigroup settled within a month.
Citigroup, which took $45 billion in bailouts, along with the other big banks that took bailouts, must be held responsible and made to abide by U.S. securities laws and banking regulations. These Wall Street big banks, which only survived because of help from the average American on Main Street, can’t be allowed to continue to cheat and defraud taxpayers through their illegal mortgage practices. It’s bad enough that these banks were bailed out by taxpayers and are enriched by foreclosing on unfortunate homeowners, they now want to profiteer even more on those taxpayers’ backs by defying the laws and regulations designed to protect homeowners and ultimately the taxpayers.
Fortunately, the False Claims Act allows citizens who know of fraudulent schemes against the government the right to file a complaint and recover between 15% and 30% of the ultimate recovery. If you have any information regarding the rampant fraud occurring in the banking industry, healthcare industry, and government contracting, please let us know. Andrew Brashier, a lawyer in our firm, has been very busy investigating False Claims Act cases. He may be reached at 1-800-898-2034, or 334-269-2343 or Andrew.Brashier@BeasleyAllen.com.
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