| Wave of Whistleblower Actions Ahead for Mortgage Firms
March 14, 2012 In April 2011, attorney Lynn Szymoniak appeared on 60 Minutes. Delinquent on a $780,000 loan she took out with Option One Mortgage Corp. in February 2006, her lender took her to court to start the foreclosure process. But the company had lost her loan documents only to find them a year later. Problem was, Szymoniak was a specialist in forgery and identified discrepancies in her assignment — a revelation that led to the discovery of thousands of documents fraudulently signed as “Linda Green” of DocX. So Szymoniak filed a lawsuit under the whistleblower provision of the False Claims Act, 31 U.S.C. § 3729. Such actions are known as “Qui tam” and require that a false claim was made on the government. The provision provides for plaintiffs, who are known as “relators,” in such lawsuits that are taken over by the government to collect between 15 percent and 30 percent of what the government collects. On March 9, as part of the massive mortgage servicer settlement, the U.S. Attorney for the District of South Carolina announced that a $95 million settlement was reached with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. Szymoniak will receive $18 million from that settlement. |
