U.S. seeks new defendant in Wells Fargo mortgage fraud case
By Jonathan Stempel and Peter Rudegeair
NEW YORK (Reuters) - The U.S. government on Thursday asked for permission to add a Wells Fargo & Co (WFC.N: Quote) mortgage executive as a defendant in its year-old lawsuit accusing the country's largest mortgage lender of fraud.
In a letter to U.S. District Judge Jesse Furman in Manhattan, who oversees the case, the Department of Justice said the Wells Fargo Home Mortgage vice president it wants to add as a defendant played a "pivotal role" in allegedly causing the bank to not report defective home loans to the government.
Wells Fargo, which is also the fourth-largest U.S. bank, was accused in the October 2012 lawsuit of misleading the U.S. Department of Housing and Urban Development into believing its loans qualified for insurance from the agency's Federal Housing Administration, costing hundreds of millions of dollars.
Furman on September 24 rejected Wells Fargo's bid to dismiss the lawsuit, which was brought by U.S. Attorney Preet Bharara in Manhattan.
No individuals were originally named as defendants. The executive the government wants to add is identified in court papers as a male vice president of decision quality management.
Neither the bank nor the Justice Department would immediately confirm the name of the person who held that title at the time of the alleged wrongdoing. No settlement talks are scheduled, Thursday's letter said.
Federal investigators have received much criticism for failing to hold enough individuals accountable for activities contributing to the recent U.S. housing and financial crises.
One exception is Rebecca Mairone, a former midlevel executive at Bank of America Corp's (BAC.N: Quote) Countrywide unit, who along with that bank was found liable by a Manhattan federal jury last month for selling defective mortgages to Fannie Mae FNMA.OB and Freddie Mac FMCC.OB. Penalties have yet to be determined. Continued...