DOJ seeks to add Wells Fargo exec to fraud suit

by Ryan Smith26 Nov 2013
The government on Friday asked permission to add a Wells Fargo executive to its fraud lawsuit against the nation’s largest mortgage lender.

In a motion filed Friday, the Justice Department sought to name Kurt Lofrano, a Wells Fargo vice president, to the lawsuit, Reuters reported. The lawsuit accuses Wells Fargo of misleading the Department of Housing and Urban Development into believing that shoddy home loans qualified for insurance through the Federal Housing Administration, precipitating hundreds of millions of dollars in losses, Reuters reported.

Lofrano, who was in charge of quality control, “played a critical role in the bank’s decision not to report to HUD, as required, more than six thousand materially defective loans that Wells Fargo had falsely certified to HUD for FHA insurance,” the DOJ wrote in a court filing.
The bank, meanwhile, denies any allegations of wrongdoing and says it stands by Lofrano “unequivocally.”

“Wells Fargo is very disappointed that the government is seeking to add Mr. Lofrano as a defendant in this civil case,” Wells Fargo spokesman Ancel Martinez wrote in an email to the Bloomberg news service. ‘‘Wells Fargo has not been presented with any facts or circumstances warranting this action nor has the government explained why it is even remotely appropriate to include Mr. Lofrano more than a year after first filing suit.’’

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