Bank of America to pay fired whistleblower $930,000

Reuters News
Posted: Sep 14, 2011 5:18 PM
Bank of America to pay fired whistleblower $930,000

WASHINGTON (Reuters) - Bank of America Corp must reinstate a Countrywide whistleblower fired shortly after the two companies merged in 2008 and pay the employee $930,000, the Labor Department said on Wednesday.

The employee, whose name was not given, led internal investigations that found widespread fraud involving Countrywide employees. Reporting fraud to Countrywide's Employee Relations Department led to retaliation, the employee told the Labor Department.

"It's clear from our investigation that Bank of America used illegal retaliatory tactics against this employee," Occupational Safety and Health Administration Assistant Secretary David Michaels said in a statement.

Bank of America has had a rash of problems related to its 2008 purchase of Countrywide Financial Corp, a major subprime lender accused of churning out loans to high-risk borrowers with little effort to check incomes or ability to repay.

The Charlotte, North Carolina-based bank paid $2.5 billion to buy Countrywide, but writedowns and legal costs have pushed the estimated cost of that purchase to more than $30 billion.

The $930,000 payment includes back wages, compensatory damages and attorney fees, the department said.

Bank of America could not immediately be reached for comment.

The decision can be appealed to the Labor Department's Office of Administrative Law Judges.

(Reporting by Diane Bartz; editing by Andre Grenon)