Wells Fargo was served papers by United States prosecutors on Tuesday in the Federal District Court in Manhattan.
Prosecutors are accusing Wells Fargo of being dishonest regarding the value of mortgages it held.
Wells Fargo had been allegedly defrauding the government for more than a decade by issuing risky loans then falsely certifying them. The misrepresentation of loans then cost the Federal Housing Administration millions of dollars, as their suit claims, when they were expected to then cover the losses on those loans.
Wells Fargo denies any misrepresentation and insists they acted in good faith releasing the following statement, “Wells Fargo is the leading F.H.A. lender and has acted as a prudent and responsible lender, with F.H.A. delinquency rates that have been as low as half the industry average. The bank will present facts to vigorously defend itself against this action.”