Feds Deploy Potent Bank Fraud Law In $7B Citi Pact
Law360, New York (July 14, 2014, 7:56 PM EDT) -- The U.S. Department of Justice's $7 billion mortgage bond settlement with Citigroup Inc. on Monday may not have been possible without the help of a once-obscure fraud law that has become a legal magic wand for prosecutors.
Citigroup's settlement included a $4 billion civil fine under the Financial Institutions Reform Recovery and Enforcement Act, the largest such penalty in history. FIRREA was passed in the wake of the 1980s savings-and-loan crisis but has been dusted off in recent years as prosecutors have targeted major Wall Street banks that packaged and sold toxic residential mortgage-backed securities before the 2008 economic collapse....
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