Three Individuals In District Of New Jersey Receive Attorney General Awards

NEWARK, N.J. –  Attorney General Loretta Lynch recognized 279 Justice Department employees and 33 individuals, including three people in the District of New Jersey, with Attorney General Awards at a ceremony today in Washington, D.C. These annual awards recognize department employees and other individuals for their dedication to carrying out the Department of Justice’s mission.  

“The individuals being honored today stand out within a department that holds all of its employees and partners to an extremely high standard of excellence,” said Attorney General Lynch.  “They have put in long hours, made immense sacrifices, and, in some cases, placed themselves in harm’s way.  They have taken on issues that once seemed intractable, and made progress on problems that once seemed impossible.  And their outstanding work is an inspiration to public servants everywhere.”

In the District of New Jersey, the following individuals were recognized for the following award: Assistant U.S. Attorneys Leticia Vandehaar and David Feder and Auditor Barbara Radey received the Attorney General’s Award for Distinguished Service in connection with their work on the Department of Justice’s historic settlement with Bank of America regarding fraud in the sale of residential mortgage backed securities (RMBS) by BofA subsidiary Merrill Lynch.

“Merrill Lynch continued to buy and package mortgage loans in the run-up to the financial crisis, selling them off in securities, knowing full well that a substantial number of those loans were defective,” U.S. Attorney Paul J. Fishman said. “The tireless work of Leticia, David and Barbara as part of the RMBS Working Group led to a record-breaking settlement, which included the resolution of our office’s imminent multibillion-dollar suit.”

As part of the RMBS Working Group, AUSAs Vandehaar and Feder, with the assistance of Radey, conducted a Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007. The investigation revealed that Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts.  Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects – including as many as 55 percent in a single pool.  Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools.  Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective.

As a result of the District of New Jersey’s investigation of Merrill Lynch and other investigations conducted by Working Group members across the country, BofA agreed in August 2014 to a $16.65 billion global settlement – at that time, the largest civil settlement with a single entity in American history – to resolve federal and state claims against BofA and its former and current subsidiaries, including Merrill Lynch and Countrywide Financial Corporation.  As part of this global resolution, the bank agreed to pay a $5 billion penalty – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners.

Vandehaar, Feder, and Radey share this award with the other Working Group members who investigated cases resolved by the global settlement with BofA, as well as those who investigated cases resolved in a similar settlement between the Department of Justice and Citibank.