AJC.COM: Wells Fargo pays $108 million on fraud claim by Atlanta whistleblowers

Wells Fargo pays $108 million on fraud claim by Atlanta whistleblowers

Russell Grantham The Atlanta Journal-Constitution
Wells Fargo story:

Wells Fargo agreed to pay $108 million to settle claims that it defrauded veteran customers and taxpayers.

Wells Fargo & Co. has agreed to pay $108 million to the federal government to settle two metro Atlanta whistleblowers’ allegations that the bank charged fraudulent fees on veterans’ home refinancing loans.

The settlement award, disclosed Friday by an Atlanta firm representing the whistleblowers, is the largest so far to result from the 11-year-old lawsuit. Two former metro Atlanta mortgage brokers sued eight banks or mortgage lenders on behalf of the government. The lawsuit was filed in federal district court in Atlanta.

“We’re glad its over, at least as to Wells Fargo,” said one of the two whistleblowers, Victor Bibby. The second is Brian Donnelly.

In 2012, SunTrust Banks, JP Morgan Chase, Countrywide Home Loans and three other major lenders agreed to pay $162 million to settle similar allegations by the whistleblowers.

Another lawsuit is pending against a St. Petersburg, Fla., lender, Mortgage Investors Corp. In 2013, the lender laid off hundreds of employees and stopped making new home loans, blaming tougher regulations under the federal Dodd-Frank Act.

A Wells Fargo spokeswoman said the bank changed its methods for handling Veterans Administration refinancing loans several years ago to fix the alleged problems and settled the lawsuit to “put the matter behind us.”

The San Francisco bank, which is metro Atlanta’s second largest bank in terms of total deposits, has been bruised lately in a number of legal skirmishes over its practices.

Last year, the federal Consumer Financial Protection Bureau and other agencies alleged that the bank’s employees broke the law by opening more than 2 million credit card, checking and savings accounts without customers’ knowledge, in order to meet sales quotas and win bonuses.

Last month, Wells Fargo said it would refund customers after admitting that about 570,000 borrowers may have been wrongly pushed into auto insurance policies that they didn’t need.

In the Atlanta whistleblower case, which affected veteran homeowners across the nation, Bibby and Donnelly alleged that Wells Fargo illegally collected lawyers’ fees and closing costs from borrowers who refinanced their mortgages, even though such charges were barred under the VA’s refinancing program.

The bank hid the fees by mislabeling them, according to Atlanta law firm Butler Wooten & Peak, one of three firms that represented the whistleblowers.

The law firm said taxpayers also lost money due to the alleged fraud. Under the VA loan guarantee program, the agency paid Wells Fargo a portion of any loans on which the borrowers defaulted, even though the fraudulent fees would have negated the government loan guarantees.

Friday, Wells Fargo spokeswoman Crystal Drake said, “Today, we are settling this longstanding lawsuit, which did not seek any refunds for individual veterans, in order to put the matter behind us, and to focus on restoring trust in Wells Fargo.”

She said the bank had previously made compensation available to affected veterans.

“More than six years ago,” she added, “when questions about fees on certain Veterans Administration refinance loans were raised, we resolved those concerns by improving our internal controls to ensure that veteran customers only pay appropriate fees on refinances.”

Under the federal whistleblower’s act, known as the Federal False Claims Act, people with knowledge of wrongdoing by a company can sue on behalf of the government, and collect up to 30 percent of any resulting settlement or jury award.

“Ultimately the government decided not to participate” in the lawsuit, Butler Wooten said in a press release.

Jim Butler, with Butler Wooten, said the whistleblowers’ share of the $270 million in total settlements with the seven lenders is still being negotiated with the federal Justice Department.

MYAJC.COM: REAL JOURNALISM. REAL LOCAL IMPACT.

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From Our Friends at Veteran’s Today

January 23 to January 30, 2016

Your Radiation This week No 41

(San Francisco) January 30, 2016 – Good Day, this is “Your Radiation This Week.” These are the recorded Radiation Highs that affected people this week around the United States.

RADIATION CPM* CITY STATE

Listed in Counts per Minute, a Count is One Radioactive Decay Registered by the Instrument.
Northern Grasslands – Great Plains

Northern Grasslands – Great Plains

The highest radiation reporting city is listed first, the least radioactive city reporting is listed last. Still, all reporting cities are above normal. These are the American cities that exceeded 1,000 CPM this week.
Normal Radiation is 5 to 20 CPM. [4]
COUNT LABEL AMOUNT TIMES NORMAL TIMES NORMAL CITY, STATE TYPE OF RAD
1,551 CPM, 310.2 Times Normal, Miami, FL. Beta, Gamma.
1,436 CPM, 287.2 Times Normal, Colorado Springs, CO. Beta, Gamma.
1,285 CPM, 257 Times Normal, Little Rock, AR. Beta, Gamma.
1,238 CPM, 247.6 Times Normal, Spokane, WA. Beta, Gamma.
1,233 CPM, 246.6 Times Normal, El Paso, TX. Beta, Gamma.
1,213 CPM, 242.6 Times Normal, Grand Junction, CO. Beta, Gamma.
1,170 CPM, 234 Times Normal, Denver, CO. Beta, Gamma.
1,166 CPM, 233.2 Times Normal, San Diego, CA. Beta, Gamma.
1,133 CPM, 226.6 Times Normal, Louisville, KY. Beta, Gamma.
1,111 CPM, 222.2 Times Normal, Salt Lake City, UT. Beta, Gamma.
1,098 CPM, 219.6 Times Normal, Mason City, IA. Beta, Gamma.
1,071 CPM, 214.2 Times Normal, Tucson, AZ. Beta, Gamma.
1,070 CPM, 214 Times Normal, Laredo, TX. Beta, Gamma.
1,070 CPM, 214 Times Normal, Raleigh, NC. Beta, Gamma.
1,068 CPM, 213.6 Times Normal, Riverside, CA. Beta, Gamma.
1,018 CPM, 203.6 Times Normal, Anaheim, CA. Beta, Gamma.
1,006 CPM, 201.2 Times Normal, Kearney, NE. Beta, Gamma.
1,005 CPM, 201 Times Normal, Idaho Falls, ID. Beta, Gamma.
Normal Radiation is 5 to 20 CPM. [4]

The Count. eighteen cities exceed 1,000 CPM. There are 17 cities between 900 and 999 CPM.

Have a wonderful radioactive weekend and remember to Dodge the Rads, it’s dangerous out there.

Copyright by Bob Nichols @ 2016. Reproduce and distribute, give full attribution to Bob Nichols and Veterans Today.

Notes and Sources
1. The Radiation charts and graphs of the EPA at http://www2.epa.gov/radnet Individual queries can be built at the EPA RadNet Query Builder. Don’t skip the “2” in www2.
2. The EPA based reporting of http://www.NETC.com an LLC.
3. * This station’s Radiation equals combined Beta and Gamma Radiation. Note: Not all locations report Beta Radiation. Gamma Radiation Monitors are reporting publicly at all these locations.
4. Reference: Digilert 100 Flyer pdf, “Normal background is 5-20 CPM.” http://keison.co.uk/seinternational_digilert100.shtml Copyright @ 2015 Keison International Ltd – All Rights Reserved.