Mortgage company pays over $38 million to settle whistleblower’s allegations

by Ben Vernia | December 16th, 2022

On December 14, the Department of Justice announced that a whistleblower who litigated on her own against Utah-based Academy Mortgage Corp. had secured a $38.5 million to settle her allegations that the company submitted false claims in connection with federally-insured mortgages. According to DOJ’s press release:

Mortgage company Academy Mortgage Corporation (Academy), based in Draper, Utah, has agreed to pay $38.5 million to resolve allegations it violated the False Claims Act by improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA).

The settlement announced today resolves a lawsuit filed and litigated by former Academy underwriter Gwen Thrower (Thrower) against Academy under the qui tam or whistleblower provisions of the False Claims Act, which permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery.

In her lawsuit filed in the Northern District of California, Thrower alleged that from January 2008 through April 2017, Academy had an underwriting process that led employees to disregard FHA rules and falsely certify compliance with underwriting requirements. Thrower further alleged that, as a result of Academy’s knowingly deficient mortgage underwriting practices, the government paid insurance claims on loans improperly underwritten by Academy.

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The government announced that the whistleblower will receive $11,511,500 of the settlement (the maximum 30% relator’s share).

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