Attorney Lynn Szymoniak had spent a career investigating insurance fraud when a bank moved to foreclose on her Florida home in 2008. Almost four years later, the fraud she said she uncovered by combing through mortgage documents earned her $18 million.
Szymoniak, 63, is among six whistle-blowers who will pocket $46.5 million as part of a $25 billion national foreclosure settlement that state and federal officials reached in February with five banks, including Bank of America Corp. and JPMorgan Chase & Co. (JPM), according to the U.S. Justice Department.
Let me spell it out for you folks who work for a big bank: If you have knowledge of the bank doing something that has caused the government to get screwed, you can sue in the name of the government and get a big chunk of the recovery.
It’s called “Qui Tam” and it exists for the very purpose of giving people just like you, dear Wall Streeter, an incentive to blow the whistle on any fraud that has the effect of stealing from the government.
So as you lose your bonuses this year, Dear Wall Streeters, consider all the things that were done previously over the last few years. Selling junk mortgages to Fannie and Freddie while clamiing they were good, cramming FHA approvals, any sort of scam or scheme — so long as the government got hosed, you can go after it as a Qui Tam action and get to keep a big chunk of the recovery for yourself.
Yes, you’ll never work in the banking industry again.
But if you get a $10+ million payday do you really care?
I suspect not.