How much will whistleblower recover in stunning $614 million Mortgage Fraud False Claims Act (FCA) qui tam settlement between the government and JP Morgan Bank? The government announced on March 7, 2014 that it will be paying the whistleblower $63.9 million. While that is a very large amount, it is less than the potential range of the whistleblower’s reward under the FCA, which was between $92.1 million (15%) and $153.4 million (25%). One explanation for this difference is that the government may have uncovered some parts of the misconduct independently of the information and assistance provided by the whistleblower. The whistleblower reportedly had worked in the government insurance unit at JP Morgan for a number of years. The United States is willing to pay significant amounts of money for assistance in cases like this to help uncover and prosecute difficult to detect and complex frauds affecting government programs.
On February 4, 2014, the government announced that JP Morgan agreed to pay $614 million to settle charges that it presented approximately 500 defective mortgage loans for government insurance coverage and guarantees by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) that improperly overstated the creditworthiness of the borrowers or in some other way had not complied with the bank’s mortgage underwriting obligations. When the homeowners defaulted on the loans, the government (meaning the American taxpayers) was stuck having to pay for them.
The JP Morgan case had begun with the filing of a whistleblower qui tam complaint in January 2013 in the Manhattan federal court and was wrapped up in only about 13 months. Typically, False Claims Act (FCA) cases take much longer to get resolved, sometimes many years. So the JP Morgan settlement is noteworthy for both its sheer size and the short time in which it was completed. Read more http://www.justice.gov/opa/pr/2014/February/14-civ-120.html
