Appeals court reverses fraud finding against Bank of America
NEW YORK Bank of America Corp. was not liable for fraud and subject to a penalty of over $1.2 billion for its actions before the economy collapsed in 2008 despite a jurys finding to the contrary, a federal appeals court ruled Monday.
The 2nd U.S. Circuit Court of Appeal in Manhattan said there was insufficient evidence for a jury to conclude at a 2013 trial that mail and wire fraud was committed by the banks Countrywide Financial unit in late 2007 and 2008 when it passed along mortgages to government housing agencies Fannie Mae and Freddie Mac.
Prosecutors had alleged that the bank sold mortgages at break-neck speed without regard to quality as the economy hurtled toward one of the nations worst financial downturns.
In July 2014, U.S. Attorney Preet Bharara touted the jury verdict and subsequent civil penalty as the first time a bank or its executives had been found liable under federal law for mortgage fraud leading up to the financial crisis. His office had no immediate comment Monday.
Lawrence Grayson, a spokesman for the Charlotte, North Carolina-based bank, said the bank was pleased with the 2nd Circuits ruling.
The three-judge panel, in a ruling written by Circuit Judge Richard C. Wesley, said trial evidence came up short.
http://www.theheraldbusinessjournal.com/article/20160523/BIZ02/160529669