The Justice Department’s case against JPMorgan Chase & Co. formally came to a close last week with the announcement that whistleblower Keith Edwards will receive a reward of $63.9 million. Edwards worked for JPMorgan or its predecessors between 2003 and 2008 as an assistant vice president supervising a government insuring unit. He provided valuable tips to the U.S. Justice Department, which in turn led to the $614 million settlement between JPMorgan and the government which was announced on February 4. The settlement resolves charges that J.P. Morgan defrauded the government into insuring bad home loans.
JPMorgan admitted in the settlement that for over 10 years, the company had submitted thousands of mortgages for insurance through the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA) that were not eligible to receive government guarantees. JPMorgan also admitted in the settlement that the company did not tell either of the government agencies about internal reviews that had unearthed problems with mortgages that inevitably went sour, leaving the government to cover millions of dollars in losses at a time when thousands across the country were losing their homes through eviction and foreclosure.
Edwards initially filed suit against his former employer in 2013 under the False Claims Act. The Justice Department joined his lawsuit, and with the announcement of his reward, the case has formally come to a close. According to Reuters, roughly $56.5 million of Edwards’ whistleblower reward comes from the FHA portion of the case, and $7.4 million comes from the VA portion.
The case is U.S. ex rel. Edwards v. JPMorgan Chase Bank NA et al, U.S. District Court, Southern District of New York, No. 12-00220.