Mortgage whistleblower gets multi-million dollar reward

by AB11 Mar 2014
The whistleblower that brought JPMorgan Chase to its knees for defrauding the US government on mortgage insurance is getting a $63.9 million payout.

Former JPMorgan assistant-vice president Keith Edwards sued the bank in 2013 under the False Claims Act, which allows individuals to sue businesses for defrauding taxpayers. The Justice Department later joined the suit as a plaintiff.

The payment to Edwards was disclosed on Friday in a filing with the US district court in Manhattan that formally ended the case.

In the February 4 settlement, JPMorgan admitted that for more than a decade it submitted thousands of mortgages for insurance by the Federal Housing Administration or the Department of Veterans Affairs that did not qualify for government guarantees, the AFR reported.

JPMorgan also admitted that it had failed to tell the agencies that its own internal reviews had turned up problems.

Federal Housing Administration and the Veterans Administration had to cover millions of dollars in losses after the loans went bad, Reuters reported. JPMorgan ultimately agreed to pay $614 million to resolve the claims.

Under provisions of the False Claims Act, whistleblowers such as Edwards are entitled to a portion of settlement proceeds.

The Justice Department has paid out around $1.98 billion in settlement proceeds to whistleblowers from 2009 to 2013.