Ex-Countrywide CEO Mozilo
will not face U.S. fraud case: sources
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[June 18, 2016]
By Nate Raymond
NEW YORK (Reuters) - Former Countrywide
Financial Corp CEO Angelo Mozilo and other executives will not face a
U.S. Justice Department lawsuit for defrauding investors in
mortgage-backed securities issued before the 2008 financial crisis,
people familiar with the matter said on Friday.
Mozilo, 77, and others were recently informed by the Justice
Department that they would not be the subject of a civil fraud case
related to their roles at the mortgage lender in the run-up to the
crisis, the sources said.
The decision came two years after the potential case against Mozilo
came to light, amid criticism of the Justice Department for having
failed to pursue charges against high-ranking executives linked to
the mortgage meltdown.
"We are gratified by the decision of the Department of Justice to
close its investigation without further litigation," David Siegel,
Mozilo's lawyer, said in a statement.
Eric Sieracki, Countrywide's former chief financial officer, has
similarly been informed he will not be sued, according to his
lawyer, Shirli Weiss.
Patrick Rodenbush, a spokesman for the Justice Department, declined
comment. The news was first reported by Bloomberg News.
Countrywide, at one time the nation's top mortgage company,
collapsed under the weight of soured loans and was acquired for
about $4 billion by Bank of America Corp in July 2008.
But with the acquisition came a series of lawsuits and regulatory
investigations stemming from Countrywide's role in the subprime
mortgage crisis, for which Mozilo became one of the industry's most
Bank of America agreed in 2014 to pay a record $16.65 billion to
resolve government claims that it and companies including
Countrywide that it had acquired misled investors into buying
troubled mortgage-backed securities.
[to top of second column]
Countrywide Financial Corporation founder and CEO Angelo Mozilo
testifies before the House Committee on Oversight and Government
Reform on Capitol Hill in Washington in this March 7, 2008 file
photo. REUTERS/Kevin Lamarque/Files
Mozilo agreed in 2010 to a $67.5 million settlement with the U.S. Securities and
Exchange Commission, which had accused him of misleading investors about
Countrywide's health and risk-taking. Bank of America agreed to cover some of
The Justice Department later in 2011 shelved a criminal investigation of Mozilo.
The more recent civil probe by the Justice Department was being handled out of
the U.S. Attorney's Office in Los Angeles.
The decision to not sue Mozilo came after a federal appeals court in New York
last month overturned a $1.27 billion penalty against Bank of America and a
former Countrywide executive, Rebecca Mairone, in a separate case over conduct
(Reporting by Nate Raymond in New York, Editing by Bernard Orr and Mary
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