Self-Made Whistleblower Recovers $18M from Foreclosing Banks

When homeowner Lynn Szymoniak received a mortgage foreclosure complaint, she turned the tables on the foreclosing banks by utilizing her skills as an attorney and fraud detective to investigate tens of thousands of foreclosure documents in other foreclosure cases. After discovering that the foreclosing banks were engaging in pervasive fraud, she brought a False Claims Act lawsuit against the banks on behalf of the federal government. Now, CBS News reports that homeowner Lynn Szymoniak “is walking away with an $18 million settlement after blowing the whistle on a ‘robo-signing’ fraud that she says was perpetrated by some of the nation's largest mortgage companies.”

Szymoniak uncovered the "robo-signing" fraud while fighting to save her Florida home from foreclosure. After receiving what she considered to be fake paperwork from her bank, Szymoniak…began investigating tens of thousands of documents in other foreclosure cases that appeared to be falsified. She blew the whistle, claiming that the country's four largest mortgage [servicers] had defrauded the federal government by creating fake documents to replace lost or nonexistent ones in order to receive government-funded payments. The government joined Syzmoniak's complaint, and it was announced this week that those banks -- Bank of America, J.P. Morgan Chase & Co., Wells Fargo & Co, and Citigroup Inc. -- settled the case for $95 million. Under law, the whistleblower is entitled to a share of the money recovered by the U.S. government, in this case $18 million.… Meanwhile, Szymoniak's own case against the bank that holds her mortgage continues. And, oddly enough, she still faces foreclosure.

While the vast majority of False Claims Act whistleblowers discover government fraud as an employee, contractor, or regulator of a company receiving federal funds, the False Claims Act does not limit potential whistleblowers to traditional insiders. As demonstrated by homeowner Lynn Szymoniak, with certain statutory limitations, an individual who uncovers fraud through dedicated and skilled research may become a False Claims Act whistleblower.