Gwen Thrower, a former underwriter for Utah-based Academy Mortgage Corporation, blew the whistle on the mortgage company and alleged it was engaging in improper underwriting and originating procedures. The U.S. Department of Justice (DOJ) announced on December 14 that Academy will pay $38.5 million “to resolve allegations it violated the False Claims Act by improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA)” and that Thrower will receive an $11,511,500 qui tam whistleblower award.
The qui tam provisions of the False Claims Act enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs.
According to the DOJ, Thrower alleged in a lawsuit filed in the Northern District of California “that from January 2008 through April 2017, Academy had an underwriting process that led employees to disregard FHA rules and falsely certify compliance with underwriting requirements.” She also alleged that “as a result of Academy’s knowingly deficient mortgage underwriting practices, the government paid insurance claims on loans improperly underwritten by Academy.”
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