DOJ Bank Fraud Theory Prevails Again In Wells Fargo Case

Law360, New York (September 24, 2013, 2:33 PM EDT) -- A New York federal judge ruled Tuesday that the U.S. Department of Justice may sue Wells Fargo Bank NA under a 1989 law for negatively “affecting” itself through mortgage fraud, marking the third time in recent months that a court has approved that controversial legal theory.

U.S. District Judge Jesse Furman refused to dismiss claims that Wells Fargo defrauded a government insurer out of hundreds of millions of dollars by knowingly submitting mortgages with a high risk of default. In particular, the judge said the DOJ...
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