Financial and Bank Cases

Financial institutions who fail to secure computer networks and sensitive customer information from cyber attacks are presenting huge whistleblower opportunities for IT professionals and other bank and investment firm employees. Failure to report weak cybersecurity systems and cyberhacks continue to pose a problem for U.S. banks, and whistleblowers are in prime position to collect big cash awards for their inside knowledge.

Cybercrime Estimated To Cost Global Economy over $500 Billion Annually

McAfee estimates the annual cost of cybercrime to the global economy could be as much as $575 billion per year and banks remain the top cybercrime targets. Not only do weak cybersecurity systems continue to expose sensitive personal information, but careless employee mishandling of sensitive data poses an equally dire threat. Attaching the wrong file to an email or downloading sensitive information to a personal device is becoming a major security issue....

Birmingham, Alabama-based Regions Bank has agreed to pay the U.S. government $52.4 million to resolve allegations that it violated the False Claims Act by knowingly underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Department of Justice announced Tuesday.

Due to Regions’ omissions and compliance failures, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program and that HUD would not otherwise have insured. HUD suffered substantial losses as a result of paying the ineligible mortgage insurance claims....

Walter Investment Management Corporation (WIMC) has agreed to pay the U.S. government more than $29 million to resolve claims that they violated the False Claims Act by submitting fraudulent reverse mortgage claims to the Department of Housing and Urban Development (HUD). The initial allegations against Walter Investment Management were brought forth in a qui tam, or whistleblower, lawsuit by a former executive of the company, Matthew McDonald. McDonald will receive $5.15 million as his share in the settlement for uncovering the large-scale fraudulent activity.

The allegations against Walter Investment Management highlighted in Matthew McDonald’s whistleblower lawsuit are related to WIMC’s participation in HUD’s Home Equity Conversion Mortgages program. This program insures reverse mortgages, which are a mortgage product that allows elderly people to stay in their homes and draw on their equity.

Reverse Mortgage Solutions, REO Management & RMS Asset Management Subs

According to the accusations, between August 2009 and March 2015,WIMC, through its subsidiaries Reverse Mortgage Solution Inc., REO Management Solutions and RMS Asset Management Solutions, routinely submitted false claims in order to receive interest from HUD it was not actually entitled to....

A False Claims Act lawsuit against U.S. Bank could signal a cavalcade of similar actions against loan servicers that allegedly circumvented a key pre-foreclosure HUD requirement - steamrolling helpless homeowners to reap fast profits. Sources say Ocwen, Bank of America, Wells Fargo and other loan servicers are girding for new False Claims Act lawsuits filed by employees and ex-employees exposing yet more mortgage foreclosure misconduct to reap million dollar whistleblower rewards.

U.S. Bank Steamroller Foreclosure Process Skipped Legalities says ABLE

Advocates for Basic Legal Equality (ABLE), an Ohio based legal aid group, filed a False Claims Act lawsuit against U.S. Bank alleging this division of one of the nation’s largest banks cheated the U.S. government....

The mortgage chicanery spotlight is once again focused on Wells Fargo & Co. and Ocwen Financial Corp. A federal False Claims Act whistleblower complaint unsealed yesterday claims that Ocwen, the nation's largest mortgage servicer, was double dipping and keeping monies that should have been paid to Fannie Mae.

Ocwen Financial Corp. Facing Mortgage Servicer Fraud Case

Ocwen Financial Corp. is a leading mortgage servicer that services an estimated 1 million mortgages, collecting payments of behalf of banks and other entities. Mortgage servicers have taken over this function for many of the major banks and litigation asserting misconduct within the mortgage servicer industry abounds....

In the largest civil settlement with a single entity in U.S. history, Bank of America has agreed to pay a total of $16.6 billion to the federal government and a number of states in order to resolve claims against the company and its former and current subsidiaries for the selling of shoddy mortgage and related securities. The subsidiaries include Country Financial Corporation and Merrill Lynch.

Whistleblowers $170M Reward: Shareef Abdou, Robert Madsen, Edward O’Donnell

The whistleblower case against Bank of America, one of the world’s largest financial institutions, was brought by four parties: Shareef Abdou, an executive in the bank’s operations group; Robert Madsen, a former property appraiser at a Bank of America subsidiary; Edward O’Donnell, a former financial executive at Countrywide; and Mortgage Now, a small New Jersey mortgage lender headed up by James Marchese. For their efforts, they will receive a total of about $170 million, according to various media sources....