The Department of Justice (DOJ) has been aggressive in its enforcement of the False Claims Act (FCA) and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), and Buckley Sander’s enforcement attorneys have extensive experience guiding our clients through the enforcement process in this uniquely challenging environment and at each stage of that process.
First, we work with clients on proactive measures to identify compliance risk and take corrective action with the goal of avoiding any investigation or enforcement action. On these efforts, our FCA/FIRREA enforcement attorneys routinely work hand-in-hand with the firm’s regulatory and compliance attorneys, who are steeped in the intricate regulatory issues that often underlie such investigations. Buckley Sandler also assists clients throughout the life cycle of government agency audits, which can often provide the impetus for an investigation or enforcement action. Our experience includes the preparation of responses to audit reports, reviewing and revising compliance documents, conducting risk assessments, overseeing loan file reviews, assisting with annual recertification, and responding to notices of violation and matters involving the Mortgagee Review Board (MRB). We also help clients minimize the risk of FCA/FIRREA exposure by conducting effective internal investigations into the allegations of whistleblowers.
Second, our team has extensive experience handling FCA/FIRREA matters at the investigative stage, helping our clients manage their compliance with the often burdensome civil investigative demands (CIDs) and subpoenas issued by the DOJ, U.S. Attorney's Offices, and federal agency offices of inspectors general (OIGs). FCA/FIRREA investigations can be extensive in their reach and extremely costly to comply with, and we successfully work with our clients to minimize the burden and intrusiveness of these sometimes sprawling investigations by engagging in effective negotiations with the government. Also, at the conclusion of these investigations, we have a proven track record of convincing the government to decline enforcement action against our clients, and in negotiating successful pre-suit settlements when litigation cannot be avoided. Our team includes several former government enforcement attorneys, who provide our clients with unique insight into the government’s approach to these cases, and who can lend additional credibility in pre-suit negotiations.
Finally, when FCA/FIRREA litigation cannot be avoided, we know how to litigate — and win — these cases. Our FCA/FIRREA attorneys are not only steeped in the subject matter and recognized thought leaders in this area, but they are also experienced trial and appellate attorneys. We have regularly been successful in getting litigated FCA cases dismissed by the courts at the earliest possible stage.
Significant representations include:
- Successfully represented multiple large mortgage lenders in FCA investigations into Federal Housing Administration (FHA) lending, reaching pre-suit settlement agreements with the DOJ in each case that included no admission of liability, no administrative sanction, and no prospective relief
- Successfully represented multiple top banks in responding to the DOJ’s “Operation Choke Point” FIRREA investigation into third-party payment processing, in which the government declined to pursue enforcement action
- Successfully represented a top research university in reaching a favorable, pre-suit settlement of an FCA qui tam investigation relating to federally sponsored research grants
- Successfully represented a top mortgage loan servicer in an FCA qui tam investigation into servicing and loss mitigation activities, in which the government declined to intervene in the case; the district court dismissed the case on motion, and the Sixth Circuit upheld the dismissal
- Successfully represented a national financial services firm in an FCA qui tam investigation by the U.S. Attorney’s Office for the Southern District of New York, in which the government declined to intervene in the case and the relator’s case was voluntarily dismissed
Special Alert: Second Circuit Rules Fraud Claim Based on Contractual Promise Cannot Support FIRREA Violation Without Proof of Fraudulent Intent at Time of Contract Execution
On May 23, in an opinion delivered by Circuit Judge Richard Wesley, the Second Circuit Court of Appeals reversed the District Court for the Southern District of New York’s (SDNY) July 30, 2014 judgment ordering a bank and its lender subsidiary to pay penalties in excess of $1.2 billion for alleged...Articles
In the years following the financial crisis, the U.S. Department of Justice and the relators bar have aggressively used the False Claims Act to target banks and nonbank mortgage lenders and servicers, using increasingly creative theories of liability to hold these companies responsible for failing...Articles
Near the end of his tenure, Attorney General Eric Holder publicly raised the prospect of amending FIRREA—the Financial Institutions Reform, Recovery, and Enforcement Act of 1989—to increase the incentives for blowing the whistle on financial fraud. FIRREA is the federal statute the Department of...Articles
By now, lenders that make loans insured by the federal government are well acquainted with the False Claims Act. Following the financial crisis, the U.S. Department of Justice has aggressively used the FCA to collect billions of dollars in settlements from mortgage lenders whose loans are backed by...Articles
Spotlight on the False Claims Act: Wartime Suspension of Limitations Act Suspends Statue of Limitations in False Claim Act Cases
The False Claims Act (FCA), which allows both the government and whistleblowers to seek treble damages for claims of civil fraud on the United States, is a powerful tool. In the past two years, the government has aggressively used the FCA to target financial institutions for claims of reckless...Articles
In recent years, servicing U.S. Federal Housing Administration-insured loans has become risky business. The U.S. Department of Housing and Urban Development has heightened its monitoring and enforcement, with servicers experiencing increased Quality Assurance Division (QAD) reviews, HUD Office of...Articles
The U.S. Department of Justice’s aggressive use of the Financial Institutions Reform, Recovery, and Enforcement Act to sue banks for fraud just received an unexpected boost, and from an unlikely source: In a criminal case decided last week,the Second Circuit endorsed an expansive approach to the...Articles
On March 19, 2015, the U.S. Attorney’s Office for the Southern District of New York announced a proposed settlement of a civil fraud lawsuit against a large financial institution (bank). As with many of the U.S. Department of Justice’s recent settlements, the proposed settlement includes a...Articles
On Sept. 17, U.S. Attorney General Eric Holder raised the prospect of amending FIRREA — the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 — to increase its whistleblower awards with the goal of further incentivizing cooperation in financial fraud cases. While FIRREA has...Articles
It’s that time of year again. No, not spring break; the Federal Housing Administration’s ("FHA") annual recertification deadline is upon us (or, more specifically, FHA program participants). The good news is that, this year, mortgagees with a December 31st fiscal year end will have some extra time...Articles
On January 17, the Department of Justice (DOJ) announced a $7.2 billion settlement with Germany’s largest lender, resolving federal civil claims that a German global bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS...InfoBytes
Andrew Schilling was quoted in Robert Stowe England's article, "The Litigation Factor," on April 1, 2016. Five years ago, federal false claims litigation was a tiny cloud on the horizon. Since then, the clouds have filled the sky and released a relentless deluge of lawsuits and settlements on...In The News
Andrew Schilling Quoted in Bloomberg BNA Article, "Ninth Circuit Blocks False Claims Act Suit, Doesn't Rule Out All GSE-Based FCA Claims"
Andrew Schilling was quoted in Chris Bruce's Bloomberg BNA article, "Ninth Circuit Blocks False Claims Act Suit, Doesn't Rule Out All GSE-Based FCA Claims," on February 29, 2016. The U.S. Court of Appeals for the Ninth Circuit blocked a False Claims Act (FCA) lawsuit that said Bank of America,...In The News
Andrew Schilling Quoted in Inside Mortgage Finance/Inside The GSEs Article, "FCA Targets Could Blur the Lines with Increased GSE Focus"
Andrew Schilling was quoted in Carisa Chappell's Inside Mortgage Finance/Inside GSEs article, "FCA Targets Could Blur the Lines With Increased GSE Focus," on February 19, 2016. The case is currently in the U.S. Court of Appeals, where the Ninth Circuit will make a decision and Schilling said it...In The News
Andrew Schilling Quoted in Law360 Article, "Attys React To Supreme Court's Wartime Limits To FCA Ruling"
Andrew Schilling was quoted in the Law360 article, "Attys React to Supreme Court's Wartime Limits to FCA Ruling," on May 27, 2015. The Justice Department has been aggressively using the FCA to target banks and mortgage companies for actions leading up to the mortgage crisis. Its novel...In The News
Andrew Schilling was quoted in Stephanie Russell-Kraft's Law360 article, “$1.38B S&P Settlement Cements FIRREA As DOJ Darling," on February 3, 2015. "This latest case is just further evidence that they’re continuing to use this statute in a creative and aggressive way,” said Andrew Schilling,...In The News
Douglas Gansler was quoted in Chris Yates and Mark Lebetkin's Law360 article, "Attorneys Weigh In On DOJ Settlement With S&P," on Tuesday, February 3, 2015. Douglas F. Gansler, former Maryland attorney general, Buckley Sandler LLP “Today’s settlement signifies the third and final...In The News
Michelle Rogers was quoted in Jaclyn Jaeger's Compliance Week article, "FCA’s Reach, Power Only Get Bigger," on January 21, 2015. The scope of FCA enforcement doesn’t apply to just big banks. “Any financial institution that participates in a government program is susceptible to...In The News
Andrew Schilling Quoted in Wall Street Journal Article "Holder Proposes Bigger Rewards for Wall Street Whistleblowers"
Andrew Schilling was quoted in Devlin Barrett's Wall Street Journal article "Holder Proposes Bigger Rewards for Wall Street Whistleblowers" on September 17, 2014. Former Justice Department lawyer Andrew Schilling, now at Buckley Sandler LLP, where he specializes in False Claims Act and Firrea cases...In The News
Andrew Schilling Quoted in Reuters Article, "Judge Endorses U.S. Use of Fraud Law Against Bank of America"
Andrew Schilling was quoted in Nate Raymond's Reuters article, "Judge Endorses U.s. Use of Fraud Law Against Bank of America," on August 19, 2013. The rulings mean the Justice Department can now use FIRREA to not just go after bank fraud but the banks themselves for defrauding others, said Andrew...In The News