A well-known Florida attorney and whistleblower who appeared on ’60 Minutes’ to make allegations of robo-signing against mortgage servicers will receive $18 million to settle her lawsuit over the foreclosure of her condo.

The funds will go to Lynn Szymoniak, the first in South Carolina to file a lawsuit under the whistleblower provision of the False Claims Act to settle her claims over the 2009 foreclosure of her condominium unit.

The condo is in West Palm Beach, Fla., but Szymoniak filed her lawsuit in South Carolina after her attorneys presented her case to the state’s U.S. Attorneys Office because of its “very active” false claims practice, said Bill Nettles, U.S. Attorney for the District of South Carolina. The office is devoting more resources to false claims cases, recently doubling the number of attorneys handling those case types.

The $18 million figure is a line item in the government’s $25 billion settlement with the nation’s five largest mortgage servicers, details of which were revealed in court filings Monday. The funds going to Szymoniak will come out of a $95 million payment to the Treasury that originated from Szymoniak’s initial lawsuit related to the improper foreslosure on her condo.

Szymoniak was featured on “60 Minutes” in 2011 for uncovering details of banks’ robo-signing of mortgages documents.

The state attorneys general and the Department of Justice filed the settlement with the servicers Monday. About $1.5 billion of the total settlement will be used as a “Borrower Payment Fund.” Borrowers foreclosed on between Jan. 1, 2008, and Dec. 31, 2011, who qualify for the payouts, could receive up to $2,000 each.

Banks are paying tens of millions of dollars to resolve whistleblower lawsuits alleging lenders defrauded the government in seeking federal mortgage insurance for some risky loans. The settlement also resolves cases in New York, Georgia and Massachusetts, according to court filings.

The False Claims Act allows the government to bring civil actions against entities that knowingly use or cause the use of false documents to obtain money from the government or to conceal an obligation to pay money to the government.

The whistleblower provision entitles a private person to bring a lawsuit on behalf of the United States, where the private person has information that a defendant knowingly violated the False Claims Act.

“This case establishes a precedent for the application of the False Claims Act to complex financial fraud cases,” said Reuben Guttman, one of Szymoniak’s attorneys. “It demonstrates the ability of an individual whistleblower to use federal law to seek redress from some of the world’s largest financial institutions,” he said.

“This is only the beginning of the use of the False Claims Act as a tool in seeking redress from complex financial fraud,” he said.

jhilley@housingwire.com

@JustinHilley

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