Facts

The U.S. Dept. of Justice sued defendants relating to Wells Fargo's residential mortgage lending business, bringing claims under the False Claims Act, Financial Institutions Reform, Recovery and Enforcement Act of 1989 and common law fraud.

PLAINTIFF'S CONTENTIONS:
The government contended that Wells Fargo engaged in a regular practice of recklessly underwriting and falsely certifying that materially deficient mortgage loans were eligible for Federal Housing Administration insurance. It claimed that because of Wells Fargo's misconduct, the FHA paid hundreds of millions of dollars in insurance on defaulted loans that were falsely certified, and thousands of Americans lost their homes to foreclosure.

DEFENDANTS' CONTENTIONS:
Wells Fargo contended that it was entitled to dismissal because the claims were barred by a prior release of liability, lacked pleading particulars required under Rule 9(b) and otherwise failed to state claims for relief.

Result

Wells Fargo settled with the government for $1.2 billion.