Wells Fargo & Co. has agreed to settle for $108 million a 12-year-old whistleblower case accusing the bank of cheating veterans by charging them illegal fees when refinancing their home loans, the bank and whistleblower attorneys announced Friday.
The settlement was reached shortly before the case was scheduled to go to trial in federal court in Atlanta later this month. The suit was first filed in 2006 by Victor Bibby and Brian Donnelly, executives at an Atlanta-based mortgage company that specialized in government-guaranteed loans to U.S. veterans.
The case remained under seal for five years, until federal prosecutors declined to intervene. It was unsealed in 2011 after James Butler and attorneys with his firm, Butler Wooten & Peak, partnered with Atlanta attorney Marlan Wilbanks of Wilbanks & Gouinlock to pursue the banks for hundreds of millions in fees that Bibby and Donnelly claimed had been illegally included in veterans' home refinancing costs.
Wells Fargo is the sixth bank to settle with the whistleblowers. Butler's firm and Wilbanks have so far secured settlements, including the Wells Fargo settlement, totaling more than $270 million. While denying the former mortgage executives' allegations, the bank, nevertheless agreed to the $108 million payout to "put the matter behind us," Tim Sloan, Wells Fargo's chief executive officer, said Friday.