M&T Bank must pay $64 million to the federal government to resolve a whistleblower case, and at least $9.6 million of that settlement will go to a former employee from Buffalo who provided key information to investigators.
In the initial lawsuit, the employee claimed the bank regularly broke a number of rules for loans insured by the Federal Housing Administration (FHA). According to the complaint, the bank knowingly originated and underwrote a number of FHA-insured mortgage loans that did not meet certain requirements.
Many whistleblower cases related to FHA-backed mortgages
This is just the latest in a series of other settlements the federal government has reached with a total of 15 lending institutions. All of the cases were over similar allegations and all resulted in large fines.
Earlier in 2016, the U.S. Department of Justice announced that Wells Fargo would be forced to pay $1.2 billion to settle allegations similar to those levied against M&T Bank. That was the largest single recovery for loan origination violations in the history of the FHA.
Over the past several years, other major names in banking instructed to pay similar fines include Bank of America ($800 million), Chase ($614 million), Deutsche Bank ($202 million) and Citigroup ($158 million). The amount these banks pay in fines depends on damages and penalties under the False Claims Act, the total losses to the agency and other case-specific factors. For its part, M&T Bank was accused of False Claims Act violations.
Whistleblowers who step forward and report internal wrongdoing have the opportunity to earn financial awards for their tips. For more information on how to protect your company, meet with the respected Dallas attorneys at Whistleblower Law for Managers.