Category Archives: False Claims Whistleblower Program

Flagstar Settles False Claims Act Whistleblower Lawsuit For $133M

Flagstar Bancorp, Inc. agrees to pay up to $140.8 million to settle False Claims Act allegations that Flagstar improperly endorsed federally-insured mortgage loans that eventually defaulted and falsely certified its loan underwriting practices to federal housing authorities.

About the Flagstar False Claims Act Whistleblower Lawsuit

Flagstar Bank Settles False Claims Whistleblower Lawsuit

Flagstar Bank Settles False Claims Whistleblower Lawsuit

The United States Department of Justice (US DOJ) filed a complaint and settlement in New York federal court accusing Flagstar of violations in the Direct Endorsement Lender program (DEL Program). The DEL Program is a program run by the Federal Housing Administration (FHA) that authorizes private mortgage lenders to approve loans for FHA Insurance.

Under the DEL Porgram, registered underwriters are required to conduct due diligence on loans before endorsing them for FHA insurance. A registered underwriter is an underwriter with at least three years of full-time experience.

Flagstar’s Wrongful Conduct Prompted A False Claims Whistleblower Lawsuit And Whistleblower Settlement

Instead of using registered underwriters, Flagstar used their own self-designated “underwriting assistants” to perform the due diligence required prior to endorsing the loan for FHA insurance. These “underwriting assistants” lacked the proper qualifications to endorse loans for FHA insurance.

A whistleblower reported Flagstar’s practice of using under-qualified “underwriting assistants” to endorse loans for FHA insurance, and the US DOJ subsequently brought the whistleblower lawsuit that Flagstar agreed to settle for $133 million. In addition to the $133 million Flagstar is required to pay, Flagstar has agreed to remain in full compliance with the DEL Program.

Each lawsuit is unique, however, in situations like this under the False Claims Act, it is typical for the whistleblower to receive between 10% and 40% of the amount recovered by the US DOJ.

How To Recover As A Whistleblower

If you or someone you know has witnessed wrongful conduct, such as the conduct described above, or know of a company submitting false claims to Government agencies, you are encouraged to contact our experienced Whistleblower Lawyers and False Claims Act Attorneys to properly file a claim with the appropriate Government agency. You may contact Gilman Law LLP by calling toll free at (888) 252-0048 or completing our free consultation form online for a free and confidential case review.

How To Get A Whistleblower Reward And Keep Your Job

You may be able to earn a whistleblower reward and keep your job under whistleblower protection laws.

Did you know, that because someone blew the whistle on defense contractors, medical facilities, pharmaceutical companies, and a long list of other so-called honest companies, the Department of Justice has been able to recover from these companies more than $8.5 billion dollars.

In one case, a trial court awarded three relators (whistleblowers) $52,049,126 for their efforts in bringing a successful False Claims Case.

How To Get A Whistleblower Reward

IRS Whistleblower Rewards

Whistleblower's Prevent Tax Fraud

Whistleblower’s Prevent Tax Fraud

The requirements for whistleblower rewards are slightly different depending on which whistleblower act your claim falls under. For example, the Internal Revenue Service (IRS) may pay awards to whistleblowers who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer.

The IRS is looking for solid information, not an “educated guess” or unsupported speculation. The IRS is also looking for a significant Federal tax issue – this is not a program for resolving personal problems or disputes about a business relationship.

SEC Whistleblower Rewards

Whistleblowers Stop Securities Fraud

Whistleblowers Stop Securities Fraud

The SEC Whistleblower Law is significant because SEC whistleblowers are given an incentive to report corporate fraud and securities fraud. Specifically, an SEC whistleblower can earn substantial whistleblower rewards if he or she voluntarily provides information to the Securities and Exchange Commission (SEC) leading to the successful prosecution of securities law violations. These securities law violations can include typical Securities Act violations (Securities Act of 1933), Securities Exchange Act violations (Securities Exchange Act of 1934), and Foreign Corrupt Practices Act violatoins (FCPA). Such violations must result in monetary sanctions greater than $1 million in order for the SEC whistleblower or FCPA whistleblower to receive between 10 and 40 percent of the total recovery.

The 10% whistleblower award may seem like a minimal amount; however, the whistleblower recoveries are often very large. Moreover, depending on the value of the original information or independent analysis provided, the whistleblower may qualify for 40% as a cash whistleblower reward. The amount of the cash reward a whistleblower can earn is generally at the discretion of the SEC.

Other Whistleblower Rewards

IRS whistleblower cases, SEC whistleblower cases, and FCPA whistleblower cases are not the only types of whistleblower cases that receive cash rewards. Another popular whistleblower law is the False Claims Act, which provides whistleblowers with the opportunity to bring their own qui tam whistleblower lawsuit as a private action on behalf of a Government agency. Whistleblower claims under this act often provide for recovery of attoreys’ fees as well as substantial rewards for the relator (whistleblower).

Whistleblower Protection Laws

Presently, there are many whistleblower laws protecting the rights of individuals that blow the whistle on wrongful conduct. Government regulatory bodies, including the United States Securities and Exchange Commission and the Internal Revenue Service, actually rely on information from whistleblowers to enforce compliance with laws and regulations. For example, the SEC whistleblower program, FCPA whistleblower program, FCA whistleblower program, and other whistleblower programs provide that a whistleblower can preserve his or her anonymity by filing their whistleblower claim using an experienced SEC whistleblower lawyer. What this practically means is that up until a whistleblower reward is being offered, the whistleblower’s name will not even be disclosed to the SEC. This system helps protect the whistleblower from retaliation by the employer.

If you have questions about the whistleblower protections that may be available to you, please contact our experienced whistleblower attorneys to confidentially discuss your claim in further detail.

Important Points About Whistleblower Rewards

At this point it is critical to emphasize two important points:

  1. Must Be First Whistleblower To File: SEC whistleblower rewards, IRS whistleblower rewards, FCPA whistleblower rewards, FCA whistleblower rewards, and other types of whistleblower rewards are generally only awarded to the first whistleblower to file. If the whistleblower files after the Government agency is investigating the matter, only in rare circumstances does the Government award a whistleblower reward to the individuals. Generally, this happens if the whistleblower provides significant contributions in the form of further original information that add substantial value to the investigation.
  2. Our experienced whistleblower attorneys can help whistleblowers obtain cash rewards and assist in the speed of filing and the quality of the filing itself. A valid whistleblower claim may get denied or rejected if the information is not prepared in an appropriate format that emphasizes the significance of the whistleblower’s original information.

The whistleblower attorneys at the Whistleblower Law Firm of Gilman Law LLP hope this information has been helpful in answering your whistleblower questions concerning whistleblower rewards and whistleblower protections. As always, if you have any questions regarding filing a whistleblower claim, or feel that you may need our assistance, please do not hesitate to speak with one of our whistleblower lawyers for a free consultation by calling toll free at (888) 252-0048.