On Tuesday, JPMorgan Chase & Co. agreed to settle claims that is defrauded the government when it underwrote sub-standard mortgage loans for $614 million.
The lawsuit alleged that JPMorgan, for more than a decade, approved and insured loans that failed to pass eligibility requirements for insurance by the Federal Housing Administration or the Department of Veterans Affairs.
“Legally, JPMorgan has had rough few years, but when you hear the allegations of their conduct that elicit these settlements, it’s pretty hard to feel bad for them,” commented Christopher Paulos an attorney with the Levin, Papantonio law firm who practice in whistleblower and false claims litigation. “It appears that it’s little more than business as usual for these advisors and agents to line their pockets with the misfortune of their clients. In this case, the U.S. government.”
According to the bank, this settlement is another in the steps it is taking to “put historical mortgage related issues behind it.”
The lawsuit was originally by whistleblower Keith Edwards in January 2013. Edwards filed suit under the False Claims Act. The False Claims Act’s qui tam provision allows individuals to file suit on behalf of the government and potentially share in any proceeds that follow therewith.
“The government recovers billions of dollars each year as a result of the efforts of whistleblowers coming forward,” Mr. Paulos added. “Without individuals like Mr. Edwards taking on the risks associated with filing a whistleblower lawsuit, in many cases, the corruption and fraud being committed against taxpayers would go without check.
It has not yet been disclosed how much of the settlement will be awarded to Mr. Edwards.