Edward O’Donnell, a former Countrywide Financial executive, will receive more than $57 million in exchange for his testimony and help in securing a $16.65 billion settlement between Bank of America (BAC) and the U.S. Department of Justice to resolve claims over toxic mortgage-backed securities on residential mortgage loans sold to Fannie Mae and Freddie Mac in the run-up to the financial crisis.
O’Donnell, who already stood to earn a hefty whistleblower payout from his participation in the so-called “Hustle” case against Bank of America, will also receive money from Bank of America as part of the record settlement between BofA and the DOJ, according to a report from the New York Times.
From the New York Times report:
The payment to Mr. O’Donnell arises from a federal civil lawsuit he filed under the False Claims Act earlier this year and which Preet Bharara, the United States attorney for Manhattan, joined and used as the basis for pressing Bank of America to reach a deal.
As for Mr. O’Donnell, his role in providing ammunition to the federal prosecutors who pursued the so-called global settlement with Bank of America was not previously known. It only became public in a court document, which was filed on Monday.
O’Donnell’s involvement in the Hustle case was previously known, although that case is still unresolved, after BofA asked U.S. District Judge Jed Rakoff to throw out a jury verdict finding it liable for fraud over defective mortgages sold by its Countrywide unit that resulted in a $1.27 billion penalty.
More from the New York Times report:
The government’s agreement with Mr. O’Donnell arises from the portion of the global settlement that Bank of America reached with federal prosecutors and California, Delaware, Illinois, Kentucky, Maryland and New York. It values that portion of the settlement at $350 million and said Mr. O’Donnell was entitled to a 16 percent share of it.
In addition, Mr. O’Donnell is collecting a separate $1.6 million payment from Bank of America, according to the settlement.