Justice Department Alleges Fraud in Suit Against Bank of America - East Idaho News
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Justice Department Alleges Fraud in Suit Against Bank of America

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Getty 100511 BankofAmerica?  SQUARESPACE CACHEVERSION=1375849650220Jin Lee/Bloomberg via Getty Images(WASHINGTON) — The U.S. Department of Justice has filed suit against Bank of America and some of its affiliates, including Merrill Lynch, for allegedly defrauding investors in connection with the sale of over $850 million in residential mortgage-backed securities.

The Justice Department civil lawsuit, filed Tuesday in Charlotte, N.C., charges Bank of America ignored errors, misstatements and fraud in the mortgage-backed securities it sold, leading to investors losing $100 million, when the sub-prime housing bubble collapsed.

“Today’s filing marks the latest step forward in the Justice Department’s ongoing efforts to hold accountable those who engage in fraudulent or irresponsible conduct,” Attorney General Eric Holder said Tuesday in a statement.

Bank of America denies the charges, and says the bank was not responsible for the housing market collapse, which caused mortgage loans to default at unprecedented rates.

Holder said Tuesday the Justice Department plans to pursue other investigations to uncover abuses and combat financial fraud in the residential mortgage-backed securities market.

“As we proceed with this case, and pursue a range of additional investigations, will continue to use every tool, resource and appropriate authority to ensure stability, accountability and — above all — justice for those who have been victimized,” he said.

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