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Fifth Third Bank Settles False Claims Act Case for $84.9 Million

PHILADELPHIA, PA, October 6, 2015 — The United States Department of Justice announced today that Fifth Third Bank will pay approximately $85 million to the federal government to settle claims under the False Claims Act (“FCA”) relating to the Bank’s practices in connection with loans insured by the Federal Housing Administration (FHA).  The settlement also resolves a whistleblower lawsuit filed by Kenney & McCafferty in June, 2011 in the Southern District of New York.

Kenney & McCafferty filed the whistleblower complaint on behalf of a former chief appraiser at the Bank, who alleged a broad range of commercial and residential mortgage violations, including fraudulent appraisal practices, which resulted in significant losses to the federal government. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act.  These provisions permit private parties to sue on behalf of the United States when they believe an individual or company has submitted false claims for government funds.

Fraud on the government’s mortgage programs has become a major source of False Claims Act recoveries in the wake of the mortgage crisis, and the Fifth Third settlement marks another significant victory for both the government and the taxpayers in this line of cases.  According to George Mann, the former Fifth Third employee who blew the whistle, “the culture of the Bank at that time emphasized profits over compliance with federal regulations.  This type of behavior is exactly what led to the financial crisis and, no matter what the outcome, I felt it was my responsibility to speak up and do the right thing.”

“We were fortunate to represent Mr. Mann in this case.  He is honest, ethical, and informed, and was willing to step forward under difficult circumstances,” said Kathryn Schilling, a whistleblower attorney at Kenney & McCafferty.  “Mr. Mann raised concerns about Fifth Third’s compliance issues internally, but no one listened to him.  He is thrilled that the government has recouped significant funds from Fifth Third to restore taxpayer dollars,” Ms. Schilling said.

Mr. Mann and his attorneys expressed great appreciation for the work of the Department of Justice, and the US Attorney’s Office for the Southern District of New York, particularly Assistant US Attorneys Pierre Armand and Jaimie Nawaday.  Mr. Mann also thanked his family, friends, former colleagues who supported his compliance efforts at Fifth Third, his co-relator John Ferguson, and the law firm of Kenney & McCafferty.

For inquiries, please contact:

Kenney & McCafferty, P.C.

Kathryn Schilling

(215) 367-4333

kschilling@kenneymccafferty.com