If you have original information about possible fraud against the government, you may be considering speaking with a whistleblower attorney but are not sure whether it is worth the effort. While this is a common fear associated with qui tam lawsuits, there are also great benefits to filing your lawsuit. In today’s story, we discuss a whistleblower who, after several years of litigation over his mortgage fraud case, received a record-breaking, eight-figure reward from the government topping $63.9 million.
Whistleblower in JP Morgan Case Takes Unprecedented Reward
We have reported in the past about the various mortgage insurance fraud cases involving financial entities like JP Morgan and Bank of America. To summarize, these banks were involved in lending fraud against the Federal Housing Administration. Among many other responsibilities, the FHA is tasked with issuing mortgage insurance for home mortgages based on assurances by financial institutions that the borrowers are creditworthy candidates for the loan. After the collapse of the sub-prime housing industry, these banks faced several lawsuits, including many under the False Claims Act, alleging that borrowers were “pushed through” the system and issued mortgage loans despite being highly unqualified to borrow for the purchase of the home.
The whistleblower in this case worked in senior management for JP Morgan – specifically, in the government insurance division. The whistleblower alleged that JP Morgan submitted thousands of mortgage applications to the FHA and the Veterans Administration that eventually defaulted, costing these organizations (and taxpayers) hundreds of millions of dollars.
The case, filed in the U.S. District Court in Manhattan, New York, was settled earlier this year for a staggering $614 million.
In a recent filing with the District Court, it was revealed that the whistleblower was set to receive $56.5 million for his role in the fraud case involving the FHA and another $7.4 million for the portion of the case involving the Veterans Administration. This reward, totaling over $63 million, is one of the highest whistleblower rewards given out under the False Claims Act and represents a recent increasing trend in the amount of whistleblower awards over the past several years.
How are Whistleblower Rewards Decided?
The amount of a whistleblower reward is set by the provisions in the False Claims Act. Under the provisions of the statute, a whistleblower (also known as a relator or qui tam plaintiff) can recover up to 30 percent of the final settlement amount recovered by the government. Other federal entities, including the Securities and Exchange Commission, the Internal Revenue Service, and the Commodities Futures Trading Commission have similar reward amounts.
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