First Tennessee Bank N.A. Agrees to Pay $212.5 Million to Resolve False Claims Act Liability
As evidenced by the somewhat recent financial crisis and housing market downturn, fraudulent single family home mortgages were rampant for quite a few years. Slowly but surely, some of the entities who originated those fraudulent home mortgages are being brought to justice. Often these cases, filed under the False Claims Act, come to be thanks to a whistleblower within the company finally speaking up.
First Tennessee Bank N.A., headquarted in Memphis, Tennessee, recently agreed to pay the United States $212.5 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s Federal Housing Administration that did not meet applicable requirements. According to the Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, “First Tennessee’s reckless underwriting has resulted in significant losses of federal funds…”
First Tennessee Bank’s fraudulent underwriting and failure to report even a single deficient mortgage to the FHA caused the FHA to insure hundreds of loans that were not actually eligible for insurance and, as a result, the FHA later suffered substantial losses. When entities such as First Tennessee Bank profit handsomely while taxpayers incur substantial losses they must be brought to justice with a qui tam lawsuit, which is what happened in this case. As a part of the settlement, First Tennessee Bank admitted to a series of fraudulent acts that led them to a failure to comply with FHA origination, underwriting and quality control requirements.
Thinking about speaking up and reporting fraudulent behavior within your company? Thanks to whistleblower protections and experienced qui tam law firms with the expertise and resources to proceed with these cases, you have knowledgeable counsel available to guide you through the decision process of stepping forward