WASHINGTON, DC (KAIT) - A bank has agreed to pay millions to the United States to resolve allegations of false claims.
According to a news release Friday from the Department of Justice, IBERIABANK agreed to pay $11,692,149 to resolve allegations that they violated the False Claims Act.
The bank reportedly violated the act by "falsely certifying they were complying with Federal requirements in order to obtain insurance on mortgage loans from the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD)."
As part of the settlement, the bank admitted to the following:
- Between Jan. 1, 2005, and Dec. 31, 2014, IBERIABANK certified for FHA insurance mortgage loans that did not meet HUD underwriting and origination requirements and were, therefore, ineligible for FHA mortgage insurance under the DE program.
- Between 2005 and 2014, IBERIABANK paid incentive payments to underwriters and others who performed underwriting activities.
- Between 2005 and 2014, IBERIABANK did not timely self-report material violations of HUD requirements.
- As a result of IBERIABANK’s conduct and omissions, HUD insured loans approved by the Bank that were not eligible for FHA mortgage insurance under the DE Program and that HUD would not otherwise have insured. HUD subsequently incurred losses when it paid insurance claims on those loans.
IBERIABANK Corporation is headquartered in Lafayette, Louisiana and has branches in Arkansas and across the Southeast.
Two whistleblowers formerly working for the bank in Little Rock filed the lawsuit. They will receive a 20 percent share of the recovery.
To read the entire release from the Department of Justice, click here.
Copyright 2017 KAIT. All rights reserved.