A court filing on Friday revealed that former JP Morgan Chase & Co. employee Keith Edwards got $63.9 million richer for divulging information that led to the bank's $614 million payment to the US government over issues surrounding Federal Housing Administration and the Department of Veterans Affairs loan certification. The Wall Street Journal said Edwards' allegations help propelled the case against the global bank for falsification of loan certifications.
WSJ said that Edwards benefited from turning against his employer under the False Claims Act, which allows whistleblowers to claim a percentage of the settlements made by companies who have been reported conducting criminal activities. According to the paper, the US Justice Department posted a record $3.8 billion in settlements and judgments on False Claims cases in the fiscal 2013.
Based on Edwards' statements, JP Morgan allegedly approved Federal Housing Administration and the Department of Veterans Affairs loans that did not meet underwriting requirements as early as 2002, according to the US Justice Department. The government agencies later claimed to have suffered significant losses due to the bad loans. JP Morgan subsequently paid $614 million to settle its case filed by the agencies and vowed that it would be improving its quality control program for loans that would be submitted to the direct endorsement lender program in the future. WSJ also quoted JP Morgan, who stated that it is fully reserved for the settlement, and that the financial impact in relation to the exposure stemming from the bad government loans fiasco will not be that significant.
Reuters earlier reported Edwards' payout on Friday. The news agency said that the Louisiana resident worked for JP Morgan between the years 2003 and 2008. Based on the report, Edwards had filed a lawsuit against the bank in January 2013 under the False Claims Act. The US government later joined Edwards in his suit against the company.
