Justice Department Weighs in Against Wells Fargo in a Whistle-Blower Suit

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Justice Department Weighs in Against Wells Fargo in a Whistle-Blower Suit

Justice Department Weighs in Against Wells Fargo in a Whistle-Blower Suit

NYT-

Fresh woes for Wells Fargo and a victory for two of its whistle-blowers occurred late Tuesday when the Justice Department filed a friend-of-the-court brief in a lawsuit brought against the bank by two former employees, who were fired after they tried to report misdeeds they had observed to their supervisors.

The government’s filing adds heft to a long-running case that involves behavior that predates the 2008 financial crisis and the sham-accounts scandal that came to light at Wells Fargo last year.

Although the Justice Department’s filing does not opine on the whistle-blowers’ claims, it argues that an appellate court should revise the analysis it made when it dismissed the case last year. Tuesday’s filing follows a Supreme Court ruling in February that also asked the appellate court to review the matter.

The whistle-blowers who filed the case worked at Wachovia and World Savings, banks that were folded into Wells Fargo. In their complaint, filed in 2011, they contend that their employers engaged in mortgage improprieties and deceived federal regulators by hiding billions of dollars in losses from them. They filed the suit under the False Claims Act, which encourages individuals to come forward with evidence of fraud against the government. Plaintiffs who succeed in these cases receive part of the damages that are recovered.

[NEW YORK TIMES]

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