by Brian Mahany
Readers of Due Diligence know that we are partnered with the government in the largest federal false claims act case in the country against a mortgage company, our $2.4 billion fraud case against Allied Home Mortgage. Although our case remains pending in a Manhattan federal court, today Citigroup announced it would pay $158 million to resolve similar fraud charges.
We are elated that the large lenders are finally beginning to take responsibility for their actions. The housing meltdown was largely caused by greedy bankers – banks and mortgage companies that ignored HUD guidelines and wrote billions of dollars of bad loans. In the case of federally insured loans, taxpayers like you and me are left footing the bill.
Many of the big lenders are directly responsible for today’s mortgage mess. As a result of their actions, we still find ourselves 4 years later in the middle of an enormous foreclosure crisis, millions of people remain in homes they can’t afford, millions lost their homes and are struggling to rebuild their lives and credit and tens of millions can’t sell their homes because they are now worth less than the outstanding mortgage.
The housing crisis, of course, contributed to our massive recession and record unemployment.
When you look at the millions of Americans who lost their home, job and/or retirement and our neighbors who now must work 3 jobs or postpone retirement to keep the lights on, $158 million doesn’t sound like much. It’s a good start however. The Citi settlement falls on the heels of the $1 billion Bank of America settlement.
To date, the largest settlements have all been negotiated by federal lawyers working for Preet Bahara, the United States Attorney for the Southern District of New York. We are proud to be working with his office on the Allied fraud prosecution.
How did these cases get started? In many cases from whistleblowers. Just like our Allied case, the Citi case was started by a whistleblower, Sherry Hunt. A Citi quality control manager working in Missouri, Ms. Hunt came forward and reported the fraud by her employer. For her actions, she may receive up to 25% of the settlement money. In our case, a former Allied branch manager came forward.
Hard working, honest Americans are getting fed up with corporate greed, corruption and seeing family and friends out of work and forced from their homes. The victors in all these cases are taxpayers and the public of course. We are proud of the whistleblowers for having the guts to come forward.
If you know of fraud, false billing or waste that is costing the taxpayers money, give us a call. We represent whistleblowers and would be proud to represent you. If the information you provide leads to a recovery, you may be entitled to a sizeable monetary award for your information. Claims are not limited to mortgage fraud… bank fraud, false Medicare billings, defense contractor billing fraud and highway construction over billing have all resulted in multimillion payouts to concerned citizens.
For more information, contact the false claims act (Lincoln Law) attorneys at Mahany & Ertl. All calls are kept strictly confidential. Do not delay, however, as the false claim system rewards the first person with information. Attorney Brian Mahany can be reached at (414) 704-6731 (direct) or by email at
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Services available in other jurisdictions.