A Financial Institution’s Fraud On Itself Triggers FIRREA

Law360, New York (April 26, 2013, 6:21 PM EDT) -- The U.S. Department of Justice scored a significant victory on April 24, when the U.S. District Court for the Southern District of New York ruled that a federally insured financial institution may be prosecuted under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) for allegedly engaging in fraud that “affects” the same institution.

Significantly, this is the first time a court has interpreted the meaning of the phrase “affecting a federally insured financial institution” under FIRREA to allow the government to prosecute a...
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