3rd UPDATE: US Orders Bank Of America To Pay $930K To Fired Worker
15 September 2011 - 10:41AM
Dow Jones News
The U.S. Department of Labor said Wednesday it ordered Bank of
America Corp. to rehire and pay $930,000 to an employee improperly
fired in a whistleblower case.
The worker reported "pervasive wire, mail and bank fraud"
involving employees at Countrywide Financial Corp., the mortgage
lender acquired by Bank of America in July 2008, the government
said. The bank was ordered to pay back wages, damages and
attorneys' 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 Labor Department'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 Los Angeles-area employee, whose name wasn't disclosed, was
fired shortly after the Countrywide acquisition became final, the
government said.
The employee led and participated in internal investigations at
Countrywide in 2007 and 2008 that revealed "various types of
document forgery to manipulate borrowers' assets and income," a
Labor Department spokeswoman said. The employee also voiced
concerns about retaliation against Countrywide employees who
reported fraud, according to the Labor Department.
The agency said Countrywide's investigation of the employee
started before the Bank of America merger and continued after it
was completed. The Labor Department spokeswoman said the company
retaliated due to the employee's "reports of fraud and retaliation
against other employees."
Bank of America said in a statement that it is "disappointed
with the ruling and plans to exercise our option to challenge the
order." The bank said its decision to fire the employee was "solely
based on issues with the employee's management style and in no way
related to the employee's complaints and the allegations made in
the complaint."
Bank of America has faced mounting troubles related to the
bank's acquisitions of Countrywide Financial. in 2008 and Merrill
Lynch & Co. in 2009. The Charlotte, N.C.-based bank has faced
numerous lawsuits from private investors and the federal
government, alleging that the bank failed to fully disclose the
risks of mortgage-backed bonds sold to investors.
Earlier this year, a criminal probe of Angelo Mozilo, former
chief executive at Countrywide, was closed without charges being
filed. The investigation was led by the U.S. Attorney's office in
Los Angeles. Last year, Mr. Mozilo agreed to pay $67.5 million to
settle civil-fraud charges filed against him by the Securities and
Exchange Commission.