Whistleblower Awarded $14.5M in Bank of America Settlement

Man sued over inflated home appraisals at Countrywide Financial

   

Whistleblower Awarded $14.5M in Bank of America Settlement

When Kyle Lagow noticed that his employer, Countrywide Financial, was inflating the appraisals on homes purchased with government-backed mortgages and questioned the numbers, he was fired, Reuters reports.

Now he will receive $14.5 million as part of a settlement between Bank of America (NYSE:BAC), which acquired Countrywide in 2008, and the government.

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Banks Still Are Failing, But Not Like Before

After he was let go by Countrywide, Lagow filed suit against the company under the U.S. False Claims Act. His suit, along with four others, became part of a massive federal action against Bank of America and other lenders.

The result was a $25 billion settlement between Bank of America, four other lenders, the federal government and various states, announced back in February. $1 billion of that settlement resulted directly from the Justice Department’s investigation of Lagow’s claims.

Other whistle-blowers will receive similar settlements, though those amounts have not yet been disclosed.

Under the False Claims Act, whistle-blowers can sue for wrongdoing against the government’s interests — in this case government-insured mortgages and refinancing programs — and receive part of any settlement ultimately reached.

Such suits can take time, however. Lagow sued Countrywide back in 2009.


Article printed from InvestorPlace Media, http://investorplace.com/2012/05/whistleblower-awarded-14-5m-in-bank-of-america-settlement/.

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