Federal prosecutors in New York took aim at Bank of America Oct. 25, accusing the financial giant of carrying out a scheme, started by its Countrywide Financial unit, that defrauded government-backed mortgage agencies by approving loans at a fast pace without proper controls.
According to a report in the New York Times, prosecutors want to collect at least $1 billion in penalties from the bank, in a civil suit, as compensation for the actions that they say forced taxpayers to guarantee billions in bad loans.
“The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope,” Preet Bharara, the United States attorney in Manhattan, said in a statement. “This lawsuit should send another clear message that reckless lending practices will not be tolerated.” Read more >>
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