Wall Street Journal interviews Ben Vernia of the Vernia Law Firm on the Bank of America case

by Ben Vernia | October 29th, 2012

An October 29 article in the Wall Street Journal’s law blog cites Ben Vernia, attorney at the Vernia Law Firm, regarding the novel approach taken by the Department of Justice in its recent False Claims Act suit against Bank of America over the mortgage underwriting practices of Countrywide, which BofA acquired in 2008.

One likely defense available to BofA relates to the timing of the alleged false claims: the immediate victims of Countrywide’s alleged misconduct were the private corporations originally incorporated by the government, Fannie Mae and Freddie Mac, whose subsequent federal takeover constituted taxpayer-funded bailouts. The misconduct allegations focus on 2007, however, a time before the government nationalized the two companies.

From the WSJ blog article:

“There has to be government skin in the game when the act of fraud is occurring,” said Ben Vernia, a lawyer who represents both defendants and whistleblowers in False Claims Act cases.

Mr. Vernia said that Bank of America could argue that “if we violated the rules, it wasn’t in connection with what we understood to be a government program.”

“It’s not a pretty argument,” Mr. Vernia added, but it could be effective.

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