DOJ: Wells Fargo whistleblower case should be reassessed

posted on:
June 13, 2017

author:
Larry Golston

category:
Fraud

larry golston1 DOJ: Wells Fargo whistleblower case should be reassessedTwo whistleblowers who filed a False Claims Act lawsuit against Wells Fargo accusing the bank of engaging in improper mortgage practices may get another chance to argue their case in court.

The U.S. Department of Justice (DOJ) filed a friend-of-the-court brief on June 6 encouraging the U.S. Second Circuit Court of Appeals to revise the legal analysis it made last year when it dismissed the case.

According to Reuters, plaintiffs Paul Bishop and Robert Kraus filed the False Claims Act lawsuit in 2011, accusing the bank of obtaining Federal Reserve loans on multiple occasions while it was in violation of federal regulations.

The San Francisco Business Times elaborates, reporting that Wachovia Bank, which Wells Fargo acquired amid the financial crisis of 2008, misled federal regulators by hiding billions of dollars in losses when applying for Federal Reserve loans, according to the whistleblower complaint.

The lawsuit alleges that Wachovia’s Federal Reserve loans were obtained while moving records to an off-balance-sheet entity designed to make Wachovia’s books look better by hiding billions in losses, the San Francisco Business Times reported. This offshore entity was called the “Black Box” by Wachovia executives.

The False Claims Act lawsuit does not relate to complaints accusing Wells Fargo of opening millions of fake accounts for its customers without their authorization.

Mr. Bishop and Mr. Kraus allege that they were fired in retaliation for speaking out against Wells Fargo’s unlawful activity to their superiors.

The Justice Department’s filing trails a Supreme Court ruling in February that also asked the appeals court to review and modify its decision in the case.

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Are you aware of fraud being committed against the federal government, or a state government? If so, the FCA can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.

Sources:
Reuters
San Francisco Business Times

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