[Post updated] There was an article yesterday in CNN Money titled “Inside Wells Fargo, Workers Say the Mood is Grim.” Thats where I found the title quote above. For years, the “too big to fail” banks have been “too big to touch”. Finally, the tide is turning. Unfortunately, for many homeowners and customers of Wells Fargo, Chase, Citi, Ocwen and Bank of America, Congress’s attention is too little, too late. It’s not to late for insiders at these banks to stand up and be counted, however.
Under the False Claims Act and a banking anti fraud law called FIRREA, bank employees can earn cash awards and make a huge difference in the lives of many.
The most recent scandal involves Wells Fargo opening over one million accounts without their customer’s consent. We call that identity theft. If you or I did that we would have a criminal record. Wells Fargo had to do it approximately 2 million times before our elected representatives got pissed. And pissed they did… the bank paid $185 million in fines and long time CEO John Stumpf was canned.
Actually, the 2 million fraudulent accounts was the most recent scandal that received big media attention. Last week Wells agreed to pay $50 million to satisfy a class action lawsuit accusing the bank of improperly marking up appraisal fees of over 250,000 California residents who defaulted on their loans. In street parlance, the banks was kicking people while they were down.
No wonder the mood is so grim at Wells Fargo. One worker called us to say that she was working for the bank and had to keep lie dozens of time daily to homeowners seeking loan modifications. Like many others, she quit.
It’s no wonder why so many individual bankers are leaving Wells. When the going got tough, the C-Suite Mafia that runs the bank blamed the rank and file workers. As if 5500 employees located all over the country all come up with the same illegal false account scheme at the exact same time.
While many people quit, there is an alternative for many bankers. We know that most bank employees are honest, hardworking people trying to support their families and do right by their customers. The rot is at the top of the organization. Its not with tellers, private bankers, underwriters, and customer service specialists.
So what is the alternative?
For some bankers, it may the False Claims Act, FIRREA or the Fair Labor Standards Act. For some downtrodden workers those three laws can become the trifecta.
False Claims Act and Whistleblower Awards
The federal False Claims Act was passed in 1863. It allows ordinary citizens to bring fraud actions directly on behalf of the United States. Successful actions earn the whistleblower an award of up to 30% of whatever the government collects.
To qualify, one must have inside information relating to fraud involving government funds or programs. Since most residential home loans are backed by Fannie Mae, Freddie Mac, the VA or the FHA, bankers working with mortgage underwriting or servicing may qualify.
This year, one whistleblower helped the Justice Department collect over $5 billion from Wells Fargo. Over the last twenty years, Violation Tracker says the company has paid over $17 billion in fines.
FIRREA and Whistleblower Awards
FIRREA is short for the Financial Institutions Reform Recovery and Enforcement Act. Along with its companion FIAFEA (Financial Institutions Anti Fraud Enforcement Act), these two laws allow whistleblowers to collect awards of up to $1.6 million for a wide variety of banking fraud and misconduct. Unlike the False Claims Act, there is no need to show a financial loss to a federal program.
Fair Labor Standards Act (FLSA)
Much of the wrongdoing by banks these days occurs because banks create unreasonable profit or sales goals. Managers close their eyes and pretty much say that if you want to keep your job, you need to meet certain targets. When I say they close their eyes, they are really engaged in a not so clever charade that we call “willful blindness.” You can cut corners or work 80 hours a week, just meet your targets and don’t tell us what you are doing.
The 5,500 Wells Fargo workers that lost their jobs unfortunately elected to participate in the account opening scheme. But many others work huge hours, miss their families and miss having any type of social life. Unfortunately, not only are they being overworked, many of the big banks refuse to pay overtime.
Some workers are truly exempt from the time and one half pay mandates of the FLSA but in other cases, the bank just lies to its workers and says that they are “exempt” because they management or some other contrived classification in violation of federal overtime laws.
Recently we were part of the coalition of law firms that obtained approval of a $35 million settlement on behalf of thousands of Wells Fargo employees improperly denied overtime.
MahanyLaw Dedicated to Representing Bank Workers
The whistleblower and wage theft lawyers at MahanyLaw never represent banks. Instead, we protect workers from retaliation, help them collect maximum whistleblower awards and insure they are properly paid through class action lawsuits.
If you are a bank worker and think you have been treated unfairly by any bank, mortgage company or loan servicer, call us. All inquiries are protected by the attorney – client privilege and kept confidential. Our whistleblower lawyers have already helped bank clients collect over $100 million in FIRREA and False Claims Act whistleblower rewards.
For more information, contact attorney Brian Mahany at or by telephone at (direct). Wells Fargo employee? Please visit our Wells Fargo whistleblower page.
MahanyLaw – America’s Whistleblower, FIRREA and Wage Theft Lawyers – We Sue Banks!