February 06, 2014

Whistleblower sues JPMorgan Chase, 21 others

Feb. 7, 2014 – Lynn Szymoniak, a whistleblower known for her role in a 2011 lawsuit over false mortgage documents, filed suit Monday against 22 companies for allegedly filing fraudulent mortgage documents, including JPMorgan Chase, Wells Fargo, Deutsche Bank and Bank of America.

According to American Banker, the suit alleges that "22 banks, mortgage servicers, trustees, custodians and default management companies created fraudulent mortgage assignments and submitted tens of thousands of false claims to" the Department of Housing and Urban Development.

Szymoniak, who is a white collar fraud specialist, sued 28 banks in 2011. That case was settled for $95 million after she was featured on "60 Minutes." Her current suit is seeking damages on behalf of the federal government, 16 states, Washington, D.C., Chicago and New York City. The paper quoted Szymoniak saying she expected damages to total $10 billion.

The paper said JPMorgan Chase acknowledged on Wednesday it had violated the False Claims Act, which makes companies liable for defrauding government programs and allows citizens to file suit on behalf of the government. The bank reportedly agreed to pay $614 million for approving Federal Housing Administration and Veterans Affairs loans that did not meet requirements.