Edward O’Donnell, a former Countrywide Financial executive turned financial crisis whistle-blower is collecting more than $57 million for his role in forcing Bank of America to pay $16.65 billion penalty in connection with its role in selling mortgage securities. Mr. O’Donnell reached an agreement last week with the federal government that enables him to collect part of the settlement paid in August . The rewards are taxable so Uncle Sam will get some of it back.
Mr. O’Donnell’s provided the information on the bad mortgages to the federal prosecutors who pursued the so-called global settlement with Bank of America was not previously known until it was disclosed in the court filing. This is not the first time Mr. O’Donnell has served as a critical whistle-blower in helping the government pursue claims against Bank of America. Another false-claims lawsuit filed by Mr. O’Donnell was instrumental in a settlement against Bank of America and a former Countrywide official for selling shoddy mortgages. That lawsuit centered on a program at Countrywide nicknamed the hustle, which rewarded employees for producing more loans regardless of the quality.
In July, a federal judge ordered Bank of America to pay a $1.27 billion penalty in that case. The former Countrywide executive who faced civil action in that lawsuit, Rebecca Mairone, was ordered to pay a $1 million fine for her role in directing the program .A financial settlement with the federal government concerning Mr. O’Donnell’s role in the hustle case has yet to be decided. In addition, Mr. O’Donnell is collecting a separate $1.6 million payment from Bank of America.
Jeffrey Newman represents whistleblowers