Whistleblowers Prompt Settlement In Foreclosure Abuse Cases

Washington, D.C. February 9, 2012. Today, the United States government and numerous state governments reached a settlement agreement with five major banks to resolve lawsuits and investigations concerning foreclosure-abuses that fueled the financial “meltdown” and forced millions of Americans out of their homes. David K. Colapinto, the lead attorney for one of the confidential mortgage industry whistleblowers, issued the following statement:

Once again whistleblowers risked their jobs and careers in exposing misconduct and abuse. Employee-whistleblowers were key insiders who knew how big banks scammed the system, ripping off homeowners and taxpayers alike. Some of these employees had the courage to step forward. Many lost their jobs when they tried to stop or report these crimes.

Under the False Claims Act, whistleblowers that voluntarily provided the U.S. government with original and truthful information that helped in the prosecution of the banks, will obtain protection. As these cases are taken out of ‘seal,’ the public will learn the full scope of the contributions whistleblowers made in holding big banks accountable for the mortgage scandals and their foreclosure abuses.

Whistleblower cases under the False Claims Act are filed under ‘seal’ and are kept confidential to enable the government an opportunity to investigate the allegations. The Act, originally signed into law by President Abraham Lincoln in 1863, encourages whistleblowers to expose fraud. After the government concludes its investigation, the court can unseal the case.