Judge Jed S. Rakoff of the Federal District Court in Manhattan ordered Bank of America (BofA) to pay almost $1.3 billion related to a federal mortgage case where the bank sold questionable loans to Fannie Mae and Freddie Mac, The New York Times reported.
This settlement is unrelated to the case involving Department of Justice probes investigating BofA’s alleged defrauding of mortgage-backed securities buyers.
According to the NYT, Judge Rakoff’s ruling came nine months after federal prosecutors convinced a jury that BofA sold questionable loans to Freddie Mac and Fannie Mae. This was a result of the bank refusing to settle and instead taking the case to trial.
“It was from start to finish the vehicle for a brazen fraud by the defendants,” wrote Judge Rakoff. It was “driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system as a whole.”
This case, however, is just the tip of the iceberg of BofA’s criminal conduct. The bank has more on its wrap sheet than defrauding securities buyers and selling shoddy loans to government entities.
BofA recently agreed to refund $727 million to customers that it deceived into signing up for credit monitoring and identity theft services, as well as being improperly charged for the services, reported The Los Angeles Times. Up to 2.9 million people were scammed by the bank with the use of deceptive marketing practices, said the Consumer Financial Protection Bureau (CFPB).
In addition to the refunds, BofA was ordered to pay $45 million, $20 million to the CFPB and $25 million to the Office of the Comptroller of Currency. BofA was found to be committing the illegal practices since 2000.
BofA is expected to pay billions in hefty fines for its crimes. But is that enough? No, it’s not. Companies like BofA operate on a “pay-to-play-dirty” rulebook. Whether or not they get caught committing illegal acts doesn’t matter. They have the deep pockets to buy their way out of trouble. If the federal government would actually start handcuffing these criminals, then maybe that would curb some of the deception.