A federal judge has approved a wide range of savings and loan era interpretation of the law, the Justice Department is trying to use the case for Wall Street banks.
In Manhattan Federal District Court Judge Jed Rakoff said Monday ?, a simple application of the plain, "the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) allowed by the government to seek explanation.
This method has a low burden of proof, strong subpoena power, a 10-year statute of limitations, as a typical limit fraud cases twice as long. Until recently, it has become the basis of three lawsuits under the Manhattan U.S. Attorney for Puri teba Lara banks, including Bank of America Corp., Wells Fargo, Bank of New York Mellon's lawyers rarely asserted
The latest decision to the Justice Department, Bank of America (Bank of America), brought in October last year, the National Financial sold to Fannie Mae (Fannie Mae) and Freddie (Freddie Mac) mortgage crisis in the financial sector in the case of toxic mortgages.
Government's case, it is set for trial in September 23, focusing on procedures instituted in 2007 by Countrywide called "high-speed lane", also known as as the HSSL "or" Hustle. "
Government advocates expedited procedures to deal with some home loan, eliminating quality checkpoints, resulting in tens of thousands were sold to Fannie Mae and Freddie Mac mortgage fraud and defects.
Lakoff in May issued a brief order, dismiss some of the requirements, but basically allows the case to move forward.
His ruling on Monday, explaining his reasoning, especially why the government will continue, in the 1980s savings and loan scandal of the laws adopted after the claims.
"FIRREA Act," allowing the government to those who have committed fraud "affecting federally insured financial institution filed civil penalties."
According to the Government's position, FIRREA claims can be asserted against the bank, when the affected financial institutions are banks themselves.
Banks are opposed to the so-called "affect their" theory, that it ignores the statute's original purpose.
Rakoff agreed with the government. Citing the dictionary definition of "influence," he said, Bank of America (Bank of America) to pay billions of dollars to solve the Fannie Mae (Fannie Mae) and Freddie Mac repurchase defective mortgages needs.
Rakoff wrote: "The problem here is fraud in the Bank of America itself (not to mention its shareholders) have a huge impact."
Ruling also followed a similar decision in April by the U.S. District Court Judge Lewis Kaplan in Manhattan, who allowed progress FIRREA lawsuit alleging that Bank of New York Mellon trading currencies abuse customers.
The ruling means the Justice Department can now use FIRREA is not only used to defraud others of bank fraud, but the banks themselves, the Andrew Schilling said that in the Manhattan U.S. Attorney's Office of the former head of the civil division.
Ruling will encourage the Government to solve the "broader objectives in the financial services industry, as well as a broader range of alleged misconduct, including potential consumer fraud," Schilling said, the law firm partner BuckleySandler.
His ruling on Monday, Rakoff said that the government achieved under FIRREA limits.
In another statement, the Justice Department said, it can also be used FIRREA impact on U.S. banks (Bank of America), because of suspected fraud a small bank, invested in Fannie Mae and Freddie Mac.
Lakoff does not exclude, in another way, because he has allowed the case, according to Bank of America (Bank of America) impact.
But he said the U.S. Congress did not intend to law to cover the indirect impact on banks - Response - Bank "is not without some power."
Manhattan prosecutors Balala, his office has been pursuing the case of Bank of America, a spokeswoman declined to comment.
Lawrence Grayson, bank spokesman said the bank is still that "neither the United States nor the Countrywide defrauding banks Fannie Mae (Fannie Mae) and Freddie (Freddie Mac), and we look forward to resolve this matter for the rest of the allegations. "
Case of former U.S. rel. O'Donnell v. U.S. companies such as banks, U.S. District Court, New York, Southern District No. No. 12-01422.
 



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