JPMorgan whistle-blower gets $64M for mortgage fraud tips
NEW YORK — A whistle-blower will be paid $63.9 million for providing tips that led to JPMorgan Chase & Co's agreement to pay $614 million and tighten oversight to resolve charges that it defrauded the government into insuring flawed home loans.
The payment to the whistle-blower, Keith Edwards, was disclosed on Friday in a filing with the U.S. district court in Manhattan that formally ended the case.
In the Feb. 4 settlement, JPMorgan admitted that for more than a decade it submitted thousands of mortgages for insurance by the Federal Housing Administration or the Department of Veterans Affairs that did not qualify for government guarantees.
JPMorgan said it had failed to tell the agencies that its own internal reviews had turned up problems.
The government said it ultimately had to cover millions of dollars of losses when some of the bank's loans went sour, resulting in evictions and foreclosures nationwide.
“There were a lot of bad loans made during the financial boom, and the United States taxpayer was left holding the bag through the VA and FHA loan programs,” said Edwards' lawyer, David Wasinger. “Hopefully the settlement sends a message to Wall Street that this conduct is not allowed, and that in the future it will be held accountable.”
Edwards could not immediately be reached for comment.
About $56.5 million of Edwards' award concerns the FHA portion of the case, and $7.4 million concerns the VA portion. Wasinger declined to discuss his legal fees.
Edwards, a Louisiana resident, had worked for JPMorgan or its predecessors from 2003 to 2008, and had been an assistant vice president supervising a government insuring unit.
He originally sued in January 2013 under the federal False Claims Act, which lets individuals sue government contractors and suppliers for allegedly defrauding taxpayers. The Department of Justice later joined as a plaintiff.
Whistle-blowers can recover portions of False Claims Act settlements, which often grow if the government gets involved.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Energy sector adjusts to global oil plummet
- Kim Komando: Can you get a virus on your smartphone?
- Agriculture prospects envisioned in Cuba
- ‘Staff Pick’ is golden ticket on Kickstarter
- Mind the time: Optimize last-minute shopping
- Drought opens Texas ranchers’ eyes to income options
- 3 tips to use up health account funds
- Diane Stafford: Consider digital footprint
- Makers of wine corks have lost ground to screw tops
- ‘Cause for Paws’ telethon helps dogs find homes
- Real estate union: Howard Hanna buys Langholz Wilson Ellis