04/15/2013 // Whistleblower Law Firm // Keller Grover // (press release)
Banking giant Wells Fargo & Co has been embroiled in a legal battle with the United States Federal Government, which sued the financial services company over mortgage loan fraud. According to the suit, filed under the False Claims Act, the company stands accused of defrauding the Federal Housing Administration (FHA) over the past decade by underwriting loans backed by the FHA that did not qualify for the administration’s program.
The company previously entered into a $5 billion settlement agreement over abusive foreclosure practices, and argued that it should not be sued by the government under the act because of the settlement. A federal judge determined however, that the settlement did not bar the lawsuit, and the U.S. could pursue losses from defrauded mortgages that the FHA had insured over the course of the 10 years of alleged misconduct.
The Wells Fargo case is just one example of long-term fraud carried out in programs that are financially backed by the government. When a company enters into an agreement to provide services or goods that are paid for with government funds and a contract stipulates that they follow certain guidelines or procedures, they are expected to live up to the letter of the agreement. Breaking that trust can lead to serious consequences, including being forced to repay monies earned by the fraud. As demonstrated by the Wells Fargo case, the False Claims Act allows the government to recover amounts improperly paid, and releases in prior settlements will not be stretched to cover a different fraud involving the same defendant. While the latest Wells Fargo case does not involve a whistleblower, the prior settlement resolved numerous cases, including several brought by whistleblowers who play an important role in helping to right these wrongs and can also be awarded a percentage of monies recovered by the government when they bring forth claims.
The whistleblower lawyers of Keller Grover are available to help those who have information related to fraud or unethical financial practices where government contracts are concerned. If you have information about long-term financial fraud that you may like to report, contact the Keller Grover law firm today and request a free consultation.
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