OneWest Bank Allegedly Defrauded U.S. Mortgage Program

A lawsuit accusing OneWest Bank FSB, formerly known as IndyMac Bancorp Inc., of knowingly submitting or causing the submission of false claims to a federal mortgage program has been unsealed, Reuters reported.  The U.S. government paid out over $200 million as a result of the alleged fraud.

The complaint was filed by Michael Fisher, who worked on modifications for OneWest from 2008 to 2012, and alleges that OneWest violated the Home Affordable Modification Program (HAMP).  OneWest allegedly loaned new principle without itemizing as required, thereby not providing required disclosure of terms such as payment amounts, interest rates, finance charges, and late payment policies.  The lawsuit says that as a result of these false statements, the government paid $206 million under HAMP to help homeowners avoid foreclosure.

The lawsuit was filed under the whistleblower provisions of the False Claims Act, which allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The Act also allows the government to intervene in such cases, which it has elected not to do in this case.  Should Fisher prevail, he will be entitled to up to 30 percent of the recovery.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.