Whistleblower Edward O’Donnell gets to keep his $57 million reward, even though the penalty he instigated against Bank of America was overturned.
Not a bad pay day for turning in the company you worked for.
According to an article in DS News written by Brian Honea, the $1.27 billion penalty was overturned through the Second Circuit Court of Appeals’ against Bank of America over Countrywide’s High Speed Swim Lane (HSSL) mortgage program, also known as the “Hustle” program. The $1 million fine on Rebecca Mairone, the Countrywide executive, was also reversed. Mairone was the only high level executive targeted by the government for her alleged role in the financial crisis, sparking an interesting scapegoat theory.
I have inserted the rest of the article below. To me the numbers are just mind boggling. First, Edward O’Donnell, who was a Countrywide executive, is getting paid $57 million dollars essentially for snitching. Does that not seem just a tad bit excessive? Why should he be paid anything at all? Shouldn’t he just do the right thing and report what he knows are wrong doings to the proper authorities?
Do all whistleblowers get paid? I don’t think so. What makes this guy different from the rest? I don’t claim to be an expert on any of this, so really, my questions are not rhetorical. Is this reward just incentive for other whistleblowers to call out the banks on their dirty deals? I’m not sure that sends the right message.
I never paid any of my kids to snitch on their siblings. I always taught them to do the right thing, whatever that may be. Sometimes snitching is the right thing to do, especially when it comes to saving lives and people’s hard earned money.
O’Donnell is getting to keep the money really due to another lawsuit filed that was a record setting penalty of $16.65 billion. This was later settled for $350 million with Bank of America. How does that happen? I am almost sure the only people that come out winners here are the attorneys and Mr. O’Donnell now that he gets to keep his reward.
The ones who deserve rewards in the end are the shareholders of the company and the public that was allegedly damaged by Countrywide’s actions. Mind boggling!
Article by Brian Honea, DS News
The government’s lawsuit against Bank of America was a whistleblower suit originated from former Countrywide executive Edward O’Donnell, who collected $57 million for filing the whistleblower suit. O’Donnell will get to keep his whistleblower reward despite the reversal of the $1.27 billion penalty against the bank, the Wall Street Journal reported on Wednesday.
O’Donnell’s whistleblower lawsuit, which was filed under the False Claims Act, accused Countrywide of misrepresenting the mortgage-backed securities it sold to Fannie Mae and Freddie Mac through the Hustle program. O’Donnell filed the suit in 2012 when he learned that Bank of America was in talks with the Justice Department over a possible settlement over Hustle. In August 2013, the U.S. Department of Justice then sued Bank of America (which had acquired Countrywide in 2008) over Hustle, alleging that the program emphasized speed over quality of the loans sold, and staff members were rewarded according to sales volume. In October 2013, a jury found Bank of America liable for selling toxic securities to the GSEs, and in July 2014, a judge issued a $1.27 billion penalty against Bank of America and a $1 million fine against Mairone.
Both of those penalties were overturned on Monday, May 23. Despite the overturning of those penalties, O’Donnell is keeping the $57 million whistleblower reward because of a second lawsuit he filed in June 2014 against a separate division of Countrywide for the sales of toxic mortgage loans to the GSEs. Bank of America agreed to pay $350 million to settle that claim as part of a much larger settlement—a then-record $16.65 billion in August 2014.
According to the Journal, “The Justice Department set aside money from that settlement for Mr. O’Donnell and three other whistleblowers who had raised different allegations about programs at the bank and Countrywide Financial Corp., the mortgage giant that Bank of America acquired at the height of the financial crisis. Mr. O’Donnell and two of the other whistleblowers were employees of Countrywide.”