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Whistleblower assists in $614 million fine under False Claims Act

A co-worker falsifies expenditures receipts. A large corporation fails to honor the terms of its contract. Whatever the issue, the person who often brings the problem to light is typically known as a whistleblower. Most often, the issues he or she sheds light on are violations under the False Claims Act. It is possible that many Wisconsin residents have been affected by a recent issue that has come to light in this area.

Problems in the housing market and mortgage lending practices played an extensive role in the recent economic struggles that Americans have been facing. A complaint filed by an individual prompted the Department of Justice to investigate FHA and VA loans produced by JPMorgan Chase. In their investigation, they found a substantial number of loans that did not meet these loan program qualifications.

Documents indicate that JPMorgan became aware of the problems with some of their mortgage loans. However, they failed to notify FHA or VA of these problems. This failure to notify them of known violations is the basis for the False Claims Act violation. As a result, this company has been fined $614 million for their part in the recent economic struggles.

One person can make a difference by doing the right thing. In this case, one whistleblower stepped forward and made FHA and VA aware of the problems with some of these mortgage loans. Extending mortgage loans to individuals who do not meet the proper underwriting guidelines creates a greater chance that a default on the loan will occur. It is possible that some of these loans were made to Wisconsin residents who would have been better served by waiting until they did meet loan qualifications. This is just one example of the importance of working through the legal system when a violation of the False Claims Act is discovered.

Source: nationalmortgageprofessional.com, JPMorgan Chase fined by DOJ for False Claims Act violations, No author, Feb. 6, 2014

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