Under the False Claims Act, those people who learn about the efforts of businesses to defraud the federal government through fraudulent practices or the submission of false documents may receive a portion of any payments that the government is able to recover from the wrongdoer.  This percentage may range up to thirty percent (30%) of the total recovery.

In the matter of JP Morgan Chase & Co. (JPMorgan), according to news reports, the company admitted that it used fraudulent or deceptive practices in order to entice the federal government to insure home loans that were not financially sound.  JPMorgan entered into a settlement with the government and whistleblower in which it acknowledged that for more than ten years it had submitted loans to be insured by the Federal Housing Administration or the Department of Veteran Affairs that did not meet the requirements to qualify them for federal guarantees.  The financial settlement mandates that JPMorgan pay 614 million dollars back to the government and take affirmative steps to provide more oversight over the loan process.

The information that triggered the investigation into JP Morgan was provided by Keith Edwards, who brought a False Claims Act case against JPMorgan.  Edwards had worked for JPMorgan or one of its predecessors from 2003 to 2008 and had the  position of an assistant vice president dealing with government insurance.  After Edwards initiated the suit, the federal government joined the action as a plaintiff.  On Friday, March 7, 2014, the amount of payment was revealed in a court filing in the United States District Court in Manhattan, which marked the conclusion of the legal case against JPMorgan.

Part of the case against JPMorgan included allegations that the company’s internal review process had turned up the problem with the loans, but that it did not disclose these issues.  As a result of these unqualified loans being insured by the government, there were millions of dollars in payouts when homeowners that could not meet the terms of their mortgages defaulted, resulting in foreclosures across the country.

The payment that the whistleblower is going to receive includes approximately 56.5 million dollars resulting from payments made to the government to reimburse insurance payments that were made by the Federal Housing Administration and another 7.4 million dollars resulting from reimbursement to the Department of Veteran Affairs.  Mr. Edwards brought the legal action under the False Claims Act, initiating the case in January 2013.  The case was brought under the provisions that permit United States citizens to bring action against government contractors whose actions have defrauded the government.

This whistleblower payment is one of a number of very large payments made by the government as a result of the financial crisis that hit the mortgage industry in 2008.  The Justice Department stated at the end of 2013 that it had paid out nearly 2 billion dollars in whistleblower awards from 2009 through 2013, although not all of these related to mortgage lenders.

Barrett Law PLLC Represents Whistleblowers Who Expose Fraudulent Practices

The False Claims Act allows ordinary citizens to make a real difference in exposing corporate wrongdoing.  When a person decides to take action, it is important to have knowledgeable and committed attorneys who will work with the individual in putting together a complicated case.  At Barrett Law PLLC, our team of Mississippi Whistleblower Attorneys have the experience and dedication to ensure that those who are willing to come forward have the support that they need to succeed in holding wrongdoers accountable.  To discuss your case in a confidential initial consultation, call us at (800) 707-9577.  We do not recover any fees unless we succeed on your behalf.