(Adds comment from Mozilo's lawyer)
Aug 20 The U.S. attorney's office in Los Angeles
is preparing a lawsuit against Angelo Mozilo, the former chief
executive of mortgage lender Countrywide Financial Corp, and up
to 10 other employees, Bloomberg reported, citing two people
with knowledge of the matter.
The U.S. government is using the Financial Institutions
Reform, Recovery and Enforcement Act to sue Mozilo for his
company's role in inflating the U.S housing bubble before the
2008 financial crisis, Bloomberg cited the people as saying. (bloom.bg/1vivmA9)
Mozilo in 2010 agreed to a settlement of $67.5 million to
resolve charges of duping the company's investors while lining
his own pockets.
Bank of America Corp, which bought Countrywide for
$2.5 billion in 2008, had said it would pick up two-thirds of
the tab. (reut.rs/1BDuuup)
While federal prosecutors have notified lawyers that their
clients are targets of civil cases, any lawsuit may be more than
a month away, Bloomberg reported, citing one of the people.
"There is no sound basis, in law or fact, for the government
to bring a claim against Mr. Mozilo," David Siegel, Mozilo's
lawyer, told Reuters in an email.
The Los Angeles U.S. attorney's office and Bank of America
were not immediately available for comment.
(Reporting by Ramkumar Iyer in Bangalore; Editing by Saumyadeb