December 18, 2014

Countrywide Financial Whistleblower Earns $57 Million Reward

countrywideBy Jason Enzler

Edward O’Donnell, a former Vice-President of Countrywide Financial, has been awarded a $57 million bounty as part of a settlement of his False Claims Act lawsuit against his former employer.  According to a New York Times report, Mr. O’Donnell filed his lawsuit earlier this year alleging that Countrywide defrauded Fannie Mae and Freddie Mac by selling problematic mortgage-related securities.  The award is part of a deal with the government recognizing Mr. O’Donnell’s role in reaching a $16.65 billion settlement with Bank of America for charges of mortgage fraud (Bank of America acquired Countrywide in 2008 for $4 billion).

This case is not Mr. O’Donnell’s first skirmish with Bank of America.  Earlier, he had filed a whistleblower lawsuit against Countrywide claiming that his former employer defrauded the government by selling loans that were not up to snuff.  That lawsuit, known as the “Hustle” case (a name given to the process by which Countrywide sold loans to the government), ended with a federal judge ordering Bank of America to pay $1.27 billion.  Bank of America is appealing that verdict, and Mr. O’Donnell has not received any money in connection with that case.

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