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J.P Morgan whistleblower gets $63.9 million in mortgage fraud accord

J.P Morgan whistleblower gets $63.9 million in mortgage fraud accord

March 09, 2014

A whistleblower will be paid $63.9 million for providing tips that led to J.P. Morgan Chase & Co’s agreement to pay $614 million and tighten oversight to resolve charges that it defrauded the government into insuring flawed home loans. The payment to the whistleblower, Keith Edwards, was disclosed in a filing on Friday with the US district court in Manhattan that formally ended the case.

In the February 4 settlement, J.P. Morgan admitted that for more than a decade it submitted thousands of mortgages for insurance by the Federal Housing Administration or the Department of Veterans Affairs that did not qualify for government guarantees. J.P. Morgan also admitted that it had failed to tell the agencies that its own internal reviews had turned up problems. The government said it ultimately had to cover millions of dollars of losses after some of the bank’s loans went sour, resulting in evictions and foreclosures nationwide.

David Wasinger, a lawyer for Edwards, did not immediately respond on Friday to requests for comment. About $56.5 million of Edwards’ award concerns the FHA portion of the case, and $7.4 million concerns the VA portion. It is unclear how much of the award will go to his lawyer. Edwards, a Louisiana resident, had worked for J.P. Morgan or its predecessors from 2003 to 2008, and had been an assistant vice president supervising a government insuring unit. He originally sued in January 2013 under the federal False Claims Act, which lets individuals sue government contractors and suppliers for allegedly defrauding taxpayers. The US Department of Justice later joined as a plaintiff.

Copyright Reuters, 2014

March 10, 2014 - Posted by | Housing, Mortgage, Mortgage Banking, Mortgage Company, Mortgage News, Mortgage Regulation, Real Estate, Regulations, Uncategorized | , , , ,

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