The lawsuit stemmed from a whistleblower case originally brought by Edward O’Donnell, a former Countrywide executive who stands to earn up to $1.6 million for his role. The verdict comes as the government is negotiating a $13 billion settlement with JPMorgan Chase & Co to resolve a number of probes and claims arising from its mortgage business, including the sale of mortgage bonds. The government continues to investigate banks for conduct related to the financial crisis. Wednesday’s verdict was a major victory for the Justice Department, which has been criticized for failing to hold banks and executives accountable for their roles in the events leading up to the financial crisis. “She never engaged in fraud, because there was no fraud,” he said. Marc Mukasey, a lawyer for Mairone, called his client a “woman of integrity, ethics and honesty,” adding they would fight on. “We will evaluate our options for appeal.” “The jury’s decision concerned a single Countrywide program that lasted several months and ended before Bank of America’s acquisition of the company,” Bank of America spokesman Lawrence Grayson said.
Arguments on how the judge will assess penalties are set for December 5.Īny penalty would add to the more than $40 billion Bank of America has spent on disputes stemming from the 2008 financial crisis. District Judge Jed Rakoff to decide on the penalty. Justice Department has said it would seek up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans. The four men and six women on the jury also found former Countrywide executive Rebecca Mairone liable on the one fraud charge she faced. Countrywide originated shoddy home loans in a process called “Hustle” and sold them to government mortgage giants Fannie Mae and Freddie Mac, the government said. REUTERS/Fred ProuserĪfter a four-week trial, a federal jury in New York found the bank liable on one civil fraud charge. The logo of the Bank of America is pictured atop the Bank of America building in downtown Los Angeles November 17, 2011.
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