By Christina Rexrode
Edward O'Donnell, the former Countrywide Financial Corp.
executive who filed a whistleblower lawsuit against his former
firm, will collect nearly $58 million for a separate lawsuit
against Bank of America Corp.
Mr. O'Donnell is known for his role as a witness in a 2013 trial
in which the U.S. successfully accused the bank of churning out
mortgages in a Countrywide program known as Hustle. Mr. O'Donnell
had also accused the bank in his own 2012 lawsuit of misleading
Fannie Mae and Freddie Mac, which bought some of the mortgages,
about their quality.
The U.S. Attorney's Office in Manhattan used Mr. O'Donnell's
allegations as the basis of its lawsuit against the bank later that
year.
Mr. O'Donnell's reward, disclosed in a court filing this week,
is related to a separate lawsuit that he filed under seal this June
against Countrywide and Bank of America, in district court in
Manhattan. At the time, the bank's negotiations with the Justice
Department over a broad mortgage-securities settlement were already
well under way.
When that settlement, for $16.65 billion, was announced in
August, it folded in Mr. O'Donnell's sealed complaint. Of the
$16.65 billion, $350 million went toward settling Mr. O'Donnell's
complaint.
According to those documents, unsealed this week, Mr. O'Donnell
will receive 16% of that settlement, or $56 million. He will also
receive an extra $1.6 million. The court documents didn't say how
that number had been reached or why it was being given.
The June allegations echo much of Mr. O'Donnell's original
Hustle complaint.
"This matter has been fully resolved," a bank spokesman said,
and in reference to Mr. O'Donnell's recently unsealed allegations
said that the bank "won't comment on unfounded assertions like
these."
Mr. O'Donnell worked for Countrywide, and later Bank of America,
from 2003 to 2009. Bank of America bought Countrywide in 2008.
Mr. O'Donnell later worked at Fannie Mae--one of the entities
that he said was defrauded by the bank. His lawyer, David Wasinger,
said he had left Fannie Mae within the past two or three weeks. Mr.
Wasinger declined to say why.
Mr. O'Donnell's original Hustle accusations led to the
high-profile case against the bank. A jury last year found the bank
liable for fraud in that case, and a judge in July ordered the bank
to pay a $1.27 billion penalty.
The bank has said it plans to appeal the Hustle ruling.
Mr. Wasinger said there may also be a financial reward for Mr.
O'Donnell's role in the Hustle case.
Access Investor Kit for Bank of America Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0605051046
Access Investor Kit for Federal Home Loan Mortgage Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US3134003017
Access Investor Kit for Federal National Mortgage
Association
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US3135861090
Subscribe to WSJ: http://online.wsj.com?mod=djnwires