Bank of America told to pay whistleblower $930,000
Thursday, September 15, 2011
NEW YORK (AP) — Bank of America has been ordered to pay a former employee $930,000 for violating federal whistleblower protection laws.
The Labor Department also ordered the bank to reinstate the worker.
The employee, who worked for Countrywide Financial Corp., was fired shortly after the mortgage lender was bought by Bank of America Corp. in 2008.
The Los Angeles-area employee led internal investigations that revealed widespread and pervasive wire, mail and bank fraud involving Countrywide employees, according to a Labor Department statement Wednesday.
The payment will cover back wages, interest, compensatory damages and attorney fees.
“It’s clear from our investigation that Bank of America used illegal retaliatory tactics against this employee,” said David Michaels, assistant secretary of the Department of Labor’s Occupational Safety and Health Administration. “This employee showed great courage reporting potential fraud and standing up for the rights of other employees to do the same.”
The employee said those who attempted to report fraud to Countrywide’s Employee Relations Department suffered persistent retaliation.
Bank of America said it plans to challenge the order. The Charlotte, N.C. bank said it dismissed the employee because of issues related to management style rather than the complaints. The bank said it takes allegations of fraud seriously and that the employees allegations were investigated and appropriate actions were taken.
Bank of America’s ill-fated acquisition of Countrywide has led to heavy financial losses, lawsuits and regulatory probes. The bank’s stock lost 48 percent this year, largely because of problems related to poorly-written mortgages at Countrywide. In the first half of the year the bank paid out $12.7 billion to settle claims from investors that it sold them securities backed by faulty mortgages.
More like this story
Use the comment form below to begin a discussion about this content.
Please review our Policies and Procedures before registering or commenting