The U.S. Department of Justice has announced that Fifth Third Bank will pay about $85 million to settle all False Claims Act (FCA) allegations made in a whistleblower lawsuit.

According to the qui tam lawsuit, the settlement amount will cover charges regarding the bank’s loan practices insured by the Federal Housing Administration (FHA).

The whistleblower lawsuit will be resolved with this settlement, which was filed in June 2011 in the Southern District Court of New York.

Whistleblowers are plaintiffs who report the fraudulent or illegal activities their employers are committing, which often leads to defrauding millions of dollars from the federal government.

The whistleblower lawsuit was filed on behalf of a former chief appraiser at the bank, George M., who claimed that his employer violated a large range of commercial and residential mortgage violations. These charges included fraudulent appraisal practices, which had cost the federal government considerable amounts of money.

The lawsuit was filed under the qui tam, or whistleblower, provision of the False Claims Act. This allows private parties to sue major companies or agencies on behalf of the United States, when the defendants have allegedly violated federal regulations by illegally claiming government funds.

Whistleblower Rights

Fraudulent claims on the government’s mortgage programs have become commonly seen in the False Claims Act, after the mortgage crisis rocked the country. This settlement against the Fifth Third Bank is a significant victory for both the government and taxpayers, giving encouragement to many other whistleblower lawsuits.

The whistleblower plaintiff described the culture of Fifth Third, revolving around profits prioritizing federal compliance. Furthermore, George states that this behavior from many other firms, led to the mortgage crisis and he wanted to do his part in preventing another one.

According to the plaintiff’s lawyers, George raised concern regarding his company’s conduct, but no heed was given until he filed legal action. George and many others were thrilled to learn that taxpayers would be reimbursed from his bank’s fraudulent actions.

Whistleblower Lawsuits

Whistleblower lawsuits are sent directly to the Department of Justice for reviews, while the plaintiff’s identity is kept confidential until the matter is resolved. This also gives the government the chance to decide if they want to join the lawsuit or not.

The False Claims Act further protects whistleblowers by mandating that the company reinstate the plaintiff’s job, double any back pay, and reimbursement any damages or attorney’s fees. To make things better, the act prevents companies from retaliating against the whistleblower, or otherwise be found in federal violation.