$95 MILLION SETTLEMENT WITH THE NATION’S FIVE LARGEST MORTGAGE SERVICERS PARTIALLY RESOLVES SOUTH CAROLINA FALSE CLAIMS ACT LAWSUIT

According to the settlement documents, the banks are also paying tens of millions of dollars to resolve whistleblower lawsuits alleging lenders defrauded the government in seeking federal mortgage insurance for some risky loans. The banks are paying $95 million, for example, to settle a case brought by Lynn Szymoniak, a homeowner who was featured on CBS’ “60 Minutes” last year for uncovering details about banks’ so-called robo-signing of foreclosure documents.

Szymoniak will get $18 million from the settlement.

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Congratulations Lynn!

It’s been a long time coming…

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$95 MILLION SETTLEMENT WITH THE NATION’S FIVE LARGEST MORTGAGE SERVICERS PARTIALLY RESOLVES SOUTH CAROLINA FALSE CLAIMS ACT LAWSUIT

FOR IMMEDIATE RELEASE
CONTACT PERSON: Fran Trapp
(803) 929-3000
Fran.Trapp@usdoj.gov

COLUMBIA, South Carolina —- A $95 million settlement with the nation’s four largest mortgage servicers was announced today by United States Attorney Bill Nettles. Bank of America Corporation, J.P. Morgan Chase & Co., Wells Fargo & Company, and Citigroup Inc. agreed to the settlement to address allegations that the defendants participated in a nationwide practice of failing to obtain required mortgage assignments which resulted in servicing misconduct, and using false assignments to submit Federal Housing Administration mortgage insurance claims, all in violation of the federal False Claims Act, 31 U.S.C. § 3729. This is the largest False Claims Act settlement ever obtained by the District of South Carolina. The settlement was reached as part of the $25 billion dollar global resolution between the same defendants, the United States of America, the state attorneys general, and others.

The United States and the state attorneys general filed today in the U.S. District Court in the District of Columbia proposed consent judgments with Bank of America Corporation, J.P. Morgan Chase & Co., Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc., to resolve violations of state and federal law. Included in the proposed settlement agreements, is the partial settlement for four of the defendants of allegations that the United States Attorney’s Office for the District of South Carolina began investigating in the Spring of 2010. In particular, the government investigated allegations that the defendants participated in a pervasive nationwide scheme involving the wholesale fabrication of mortgage assignments and other servicing abuses.

The False Claims Act allows the government to bring civil actions against entities that knowingly use or cause the use of false documents to obtain money from the government or to conceal an obligation to pay money to the government. The lawsuit in this case was initially filed by Lynn Szymoniak under the qui tam or whistleblower provision of the False Claims Act. This provision entitles a private person to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant has knowingly violated the False Claims Act.

Under the False Claims Act, the private person, also known as a “whistleblower,” is entitled to a share of the government’s recovery. In this matter, the whistleblower will receive $18 million from the proceeds of the settlement.

“Whistleblowers play an important role in protecting taxpayer funds from fraud and abuse,” said U.S. Attorney Nettles. “Settlements like this one help maintain the integrity of the federal mortgage servicing process.”

“By this agreement we are making an important first step to hold mortgage servicers accountable for fraudulent and abusive practices not only in South Carolina but nationwide. I am proud of the tireless work of this office to investigate this case across the country,” said U.S. Attorney Nettles.

“We see this historic settlement as one of national importance as our success in this case marks a precedent setting application of the False Claims Act to complex financial fraud,” said U.S. Attorney Nettles. “It also demonstrates the role that whistleblowers can play in working with the government to return dollars to the federal
treasury and to expose wrongdoing.”

“We are very pleased by this settlement but at the same time our investigation is ongoing as we continue to ascertain the full magnitude of wrong doing and to seek redress for the United States Government,” said U.S. Attorney Nettles.

This settlement was the result of a coordinated effort by Assistant United States Attorneys Fran Trapp and Jennifer Aldrich of the U.S. Attorney’s Office for the District of South Carolina along with the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Western District of North Carolina and the Offices of Inspector General and legal counsel departments for HUD, the Treasury and the Federal Reserve in investigating the allegations.

Lynn Szymoniak, the whistleblower, was represented by South Carolina attorney Richard Harpootlian along with the firm of Grant & Eisenhofer (G&E) including firm partner Reuben Guttman, of the Washington, DC office, who heads the G&E False Claims Litigation Group and firm partner James Sabella of the New York office, who is a senior member of the G&E Securities Fraud Litigation Group. Kenneth Suggs and Howard Janet of Janet, Jenner, & Suggs in Maryland and South Carolina also represented Ms. Szymoniak.

The allegations contained in the complaint against the Defendants are merely accusations and do not constitute a determination of liability.

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4closureFraud.org

Comments
18 Responses to “$95 MILLION SETTLEMENT WITH THE NATION’S FIVE LARGEST MORTGAGE SERVICERS PARTIALLY RESOLVES SOUTH CAROLINA FALSE CLAIMS ACT LAWSUIT”
  1. pj says:

    YOU BET ‘YA MY FRIEND – THIS IS THE REAL AMERICA AND NOTHING HAS CHANGED. THE WHITE PEOPLE DO THE CRIMES AND THEY ARE ALWAYS THE FIRST ONES WITH THEIR FILTHY HANDS OUTSTRECHED IN -G-FLAT ” GIMME” WANTING TO BE PAID. NOW THAT IS WHAT’S SICK!

    • mario kenny says:

      Well tell me your story and I may be able to help somehow

      • p.v says:

        I used to have a loan with wells fargo that was foreclosed on in Dec. 2011. I am writing because of the way that my paperwork and payments were handled. I originally called Wells Fargo before I was behind to ask for advice because I was recently laid off from work and they were the biggest payment I had. I was told by them that they could not give me advice until I was behind on my mortgage at least 1 month (so much for being proactive). Whenever I had went behind 1 month they told me that they could put me in a loan modification which was around $350 less a month than what I was currently paying to help out. I did this for 2 months whenever I called to let them know that I was good and that I could resume my payments and I was told that I could not do that and I needed to stay on the plan until the end and they will give me options at that time. almost a year goes by with me sending in paperwork every month and talking to them every month along with my reduced payment every month. I went to see if I could get a small vehicle loan because my truck blew its engine. I found out from the loan officer that I was actually in foreclosure which I knew nothing about, because I was making my payments every month and was never served with any foreclosure paperwork. I called Wells Fargo about this and they said that they could not find any paperwork on me or on my foreclosure and this was in Oct 2010. I then called my contact at Wells Fargo(I think Jesicca at the time because every month I had a new contact) to ask her about it and she said that I am still in my modification so it must be some kind of mistake. 1 month later in Nov of 2010, I received a letter from wells fargo saying that I got declined from my loan modification and I either had to pay at the time either $5000.00 or let it go into foreclosure. 2 days later I was called again to do another loan modification but this time I was not allowed to send any payments in and I asked them where all of my past payments are at they told me they were used to pay interest, and fees due to the modification, so that means none of the money went towards me principle and it made it look like I have not been making any payment even though every month I did. I found out that was not how they were supossed to do it due to the Michael Jones vs. Wells fargo lawsuit in April of 2012 were he was awarded 3.1 million due to the exact same thing that they were doing to me. During this next loan modification I was called and told after 2 months that I have been approved and the paperwork is on its way. I waited 2 weeks and nothing ever showed so I called back and was told that she forgot to send it out and to send in my new declaration statement and my new hardship letter and she would get it rushed through. I waited 2 more weeks and called back and told that I was declined because now they said I made to much money to qualify. but if I would like to keep the house I would need to pay close to $10,000 to keep the house or let it get foreclosed on.
        As you can see I did everything in my power and I did everything that they told me and never missed a payment . They actually made a house that I could afford into a house that I could not afford. Because of the foreclosure on my credit I am not able to get the jobs that I once was able to get due to having bad credit during my background check. I feel my case was not handled in the proper manner and there was no communication regarding my case. Each time I called and spoke with a Wells Fargo representative, my case either could not be found or I was given multiple different answers from various reps.

  2. pj says:

    YEAH, THE WHITE PEOPLE DO THE CRIMES THEN THEY TURN AROUND AND GET PAID FOR IT — I NEVER HEARD OF “BLACK COLLAR” CRIMES ONLY WHITE COLLAR. FRAUD IS FRAUD NO MATTER WHO REPORTS IT. THANK YOU.

  3. pj says:

    But it is about race and gender – The reason you can make the statement Mr. Incognito is because Ithe media kept you from hearing my story and all the years of research and complaints and petitions filed (12 years to be exact) that I have been on the case. No, it is not fair that one person gets all the money and the credit just because she is white and found a white lawyer to represent her. If everything was on the up and up then why didn’t a FLORIDA lawyer represent her — Apparently she had trouble getting representation in her own state as well as being a white female on top of that. Yes, I will continue to fight for my just dues because unlike some, I am not a cheer leader – I am a doer working for justice who happens to be black and that’a fact jack..

  4. pj says:

    I AM SORRY TO SAY, BUT THE LADY IN FLORIDA IS NOT THE ORIGINAL WHISTLEBLOWER IN THIS CASE — I AM IN NORTH CAROLINA. SHE WAS HELPED BECA– USE SHE IS WHITE, WHICH TAKES THIS SCAM TO A WHOLE NEW LEVEL OR AN OLD ONE DEPENDING ON HOW YOU LOOK AT IT. CONGRATS ANYWAY — AFTER ALL, IT IS YOUR WORLD ISN’T IT?

    • incognito123 says:

      First, this has nothing to do with race. Second, please do more research before making such statements, as Ms Szymoniak has done so much for all of us, not only in foreclosure, but everyone benefits from her very hard work exposing the criminal conduct by the banksters. Ms Szymoniak has skills that helped her expose what she did, as she has been an investigator for numerous years for insurance fraud. She deserve everything she gets from this!

  5. LastOfTheMohicans says:

    To all out there…Lynn has been through the ringer and I remember the BS claims the Banks made against her and her son! She is deserving of every accolade she receives. She has personally taken time to communicate with me and I hope that she aspires to run for Clerk or an office that she can do justice for! My sincerest thanks, goes out to you Lynn, and yours! LOTM

  6. John says:

    I need the court filings and the evidence. One of these companies is in my chain.
    How can we get notified when it is available? There will be a lot wanting it, surely there is a list being made by someone.

  7. mario kenny says:

    but the cases are sealed

  8. dRp says:

    Yes, Lynn congrad’s, it’s well deserved and I’m sure you will continue to assist those who face such fraud.

  9. incognito123 says:

    CONGRATS!!!!!!!!!!!!!!! AWESOME!!!!!!!!!!!!!!!!!!

  10. jaclyn says:

    GOOD…Maybe more whistleblowers will come out now…’cause we’re gonna’ need ’em ! All of them !

  11. Ron Moss says:

    My Oh My, What an upstanding gem You are Lynn. You have made my day. this and I just learned that ny son in law watched the INside Job today. Thanks Lynn

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