False Claims Counsel

On February 15, the U.S. Attorney’s Office for the Southern District of New York announced that Citimortgage, Inc., had agreed to pay $158.3 million to resolves claims initially brought by a whistleblower, that the company defrauded the Federal Housing Administration. According to DOJ’s press release, the company “admits, acknowledges, and accepts responsibility” for the misconduct:

By filing its Complaint, the Government joined a private whistleblower lawsuit that had
been filed against CITIMORTGAGE under the False Claims Act in August of last year. As part
of the settlement, CITIMORTGAGE has admitted, acknowledged, and accepted responsibility
for the following conduct:

• CitiMortgage failed to comply fully with all HUD-FHA requirements with respect
  to certain loans.
• CitiMortgage failed to conduct a full review of certain loans that it endorsed for
  FHA mortgage insurance pursuant to the DEL Program that experienced early
  payment defaults: i.e., became 60 days past due within the first six payments.
• CitiMortgage endorsed for FHA mortgage insurance pursuant to the DEL
  Program certain loans that did not meet underwriting requirements contained in
  HUD’s handbooks and mortgagee letters, and therefore were not eligible for FHA
  mortgage insurance under the DEL Program.
• As a result, CitiMortgage submitted to HUD-FHA certifications stating that
  certain loans were eligible for FHA mortgage insurance when in fact they were
  not; FHA insured certain loans endorsed by CitiMortgage that were not eligible
  for FHA mortgage insurance and that FHA would not otherwise have insured; and
  HUD consequently incurred losses when those CitiMortgage-endorsed loans
  defaulted.

The SDNY did not announce how much of the recovery would be paid to the qui tam relator.