Martin & Jones, PLLC
Call today for a Free consultation.

Six Banks Settle Whistleblower Suit

A federal judge ruled that a whistleblower lawsuit may proceed against Wells Fargo and Mortgage Investors Corporation (“MIC”) with claims that the banks illegally charged veteran borrowers hidden fees on refinanced home loans backed by the Veterans Administration (“VA”). According to the suits, the banks’ misconduct cost taxpayers hundreds of millions of dollars. In a ruling issued on November 19, 2012 by a United States district judge, the motions to dismiss filed by Wells Fargo and MIC were denied, meaning that the case will proceed to trial.

Prior to the court’s ruling, six other banks which had also moved to dismiss the lawsuit settled the claims against them. Those six banks agreed to pay a total of $161.7 million, leaving Wells Fargo and MIC as the sole remaining defendants. Countrywide Home Loans, Inc. paid $45 million to settle the claims; First Tennessee Bank paid $16 million; SunTrust Mortgage paid $10.2 million; CitiMortgage paid $7.5 million; and JPMorgan Chase paid $45 million to resolve the claims against it.

The qui tam (“whistleblower”) lawsuit was filed in 2006 on behalf of United States taxpayers and sought to recover damages which will be payable to the federal government. The suit was brought pursuant to the Federal False Claims Act, which allows whistleblowers to sue companies which have defrauded the government and to collect a recovery on behalf of the government. The whistleblower suit alleged that the banks defrauded military veterans and taxpayers out of millions of dollars by hiding illegal fees in veterans’ home mortgage refinancing transactions and then sought to collect on government loan guarantees procured through the fraud when those loans went into default. The Veterans Administration guarantees for those loans are not valid because the banks charged impermissible fees in connection with the loans made to veterans.

Under the federal district court’s orders, the case will proceed as against Wells Fargo and MIC on claims that the lenders committed fraud by making false certifications to the Veterans Administration for the purpose of getting fraudulent claims paid by the government in violation of the False Claims Act.

No Comments

Leave a comment
Comment Information


Contact US Get Help Now

Send us an email or call us today at 800-662-1234 to speak with an attorney about your claim or to arrange a free consultation. It costs nothing to call and there is no obligation. In fact, we are not paid until your case is resolved. Se habla español. If you are unable to travel to one of our offices in Raleigh, Durham and Wilmington, we will meet with you at your location.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Raleigh Office
410 Glenwood Avenue
Suite 200
Raleigh, NC 27603

Toll Free: 800-662-1234
Phone: 919-821-0005
Raleigh Law Office Map

Wilmington Office
1213 Culbreth Drive
Suite 121
Wilmington, NC 28405

Toll Free: 800-662-1234
Phone: 910-256-4005
Wilmington Law Office Map

Durham Office
302 East Pettigrew Street
Suite 330
Durham, NC 27701

Toll Free: 800-662-1234
Phone: 919-544-3000
Durham Law Office Map