U.S. Appeals Ruling That Throws Out Crisis-Era Bank of America Case

WASHINGTON—The Justice Department asked a federal appeals court to reconsider its ruling throwing out a civil mortgage-fraud case against Bank of America Corp. , in an uphill effort to rescue one of its highest-profile cases tied to the financial crisis.

The U.S. attorney’s office in Manhattan said in a Thursday filing the court had “overlooked a wealth of evidence” in reaching a May decision that found the government hadn’t proven fraud by Bank of America’s Countrywide unit over a program dubbed “Hustle.”

The court said at the time the case amounted only to breaches of a contract, a stunning setback for the government’s efforts to levy tough fines on corporations and executives. The court also threw out a related penalty against a Countrywide executive, one of the few individuals fined for alleged misdeeds during the crisis.

The Justice Department said the unanimous ruling by a three-judge panel at the Second U.S. Circuit Court of Appeals in New York had overlooked the terms of the contract that support its case. It asked the court to reconsider the case and send it back for another trial if it reached the same conclusion.

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