JPMorgan whistleblower gets $63.9 million in mortgage fraud accord
March 7 (Reuters) - A whistleblower 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 whistleblower, Keith Edwards, was disclosed in a filing on Friday 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 also admitted that 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 after some of the bank's loans went sour, resulting in evictions and foreclosures nationwide.
David Wasinger, a lawyer for Edwards, did not immediately respond on Friday to requests for comment.
About $56.5 million of Edwards' award concerns the FHA portion of the case, and $7.4 million concerns the VA portion. It is unclear how much of the award will go to his lawyer.
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 U.S. Department of Justice later joined as a plaintiff.
Whistleblowers can recover portions of False Claims Act settlements, which often grow if the government gets involved.
Wasinger also represented Edward O'Donnell, whose tips led to an October 2013 jury finding that Bank of America Corp was liable for fraud over defective mortgages sold by its Countrywide unit. The government is seeking $2.1 billion of penalties in that case.
Citigroup Inc, Deutsche Bank AG and Flagstar Bancorp Inc are among lenders in recent years that settled False Claims Act mortgage cases.
The Justice Department in December said it had paid out roughly $1.98 billion of whistleblower awards from 2009 to 2013.
The case is U.S. ex rel. Edwards v. JPMorgan Chase Bank NA et al, U.S. District Court, Southern District of New York, No. 13-00220.
- Tesla says in talks with BMW over car batteries, parts
- Iran nuclear talks extended seven months after failing to meet deadline
- Actor Dwight Henry eyed in New Orleans killing after arrest for theft
- Exclusive: China ready to cut rates again on fears of deflation - sources
- Some fund managers see oil falling to $60 without OPEC cut
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video