Cleveland, OH (Law Firm Newswire) January 9, 2013 – A whistleblower lawsuit will proceed against Wells Fargo and Mortgage Investors Corporation (MIC). It alleges that they illegally charged veterans hidden fees for refinancing home loans.
“This case is as shocking as it is disgusting,” said Christopher Mellino, a Cleveland whistleblower lawyer. “It involves six big name banks that apparently illegally charged vets hidden fees on refinanced home loans from the Veterans Administration (VA). The result of this perfidy is American taxpayers were taken for hundreds of millions of dollars.” The two remaining defendants, Wells Fargo and MIC opted to litigate, while the others settled out of court for a total of $161.7 million.
United States of America ex rel. Victor E. Bibby and Brian J. Donnelly, Defendants, Relators/Plaintiffs vs. Wells Fargo Bank, N.A. and Mortgage Investors Corporation United States District Court, Northern District of Georgia, Atlanta Division, Civil Action No. 1:06-CV-0547-AT should be interesting, as the two remaining banks carry about 70 percent of the damages. “Based on the evidence before the court, it also appears that a jury will have no difficulty understanding the issue, which is they misled veterans and ripped off taxpayers for almost ten years,” added Mellino.
The case is set to move forward and deal with the whistleblower’s claims that Wells Fargo and MIC committed fraud by creating false certifications to the VA, to get those claims paid by the government. Such acts are in direct violation of 31 U.S.C. § 3279(a)(2) of the False Claims Act. It appears that the eight banks involved in this scheme hid illegal fees in veteran’s home mortgage refinancing documents, then submitted claims to the federal government to recoup their fraudulent losses if a loan went into default. “The bottom line here is that any VA-backed loans are void, as illegal fees were charged,” Mellino stated.
The qui tam lawsuit was filed in 2006 by two whistleblowers, Brian Donnelly and Victor Bibby, under the auspices of the federal False Claims Act. The lawsuit is thus brought to court on behalf of the U.S. government, and it will be aimed at recovering damages, ultimately payable to the government. The whistleblowers will be paid a portion of the amount recovered at the end of the day.
“If you find yourself in a similar situation to this case, and are aware of fraud being perpetrated against the federal government, talk to me. We handle whistleblower cases and can advise you of your rights and the process involved,” added Mellino.
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