$1B BofA Mortgage Suit OK'd Under Controversial Fraud Law

Law360, New York (May 8, 2013, 3:56 PM EDT) -- U.S. District Judge Jed Rakoff on Wednesday pared a $1 billion mortgage fraud suit against Bank of America Corp., dismissing False Claims Act allegations but allowing civil prosecutors to seek penalties under a controversial 1989 law designed to protect banks from fraud.

The prominent New York judge granted BofA’s motion to dismiss FCA claims that permit the government to seek treble damages. However, the judge refused to dismiss claims under the Financial Institutions Reform Recovery Enforcement Act, an anti-fraud law passed in the wake of the...
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