OCC Issues Civil Money Penalty Against National Bank Subsidiary

WASHINGTON, DC -- The Office of the Comptroller of the Currency (OCC) today announced a $6.25 million civil money penalty against ABN-Amro Mortgage Group. Inc.(AAMG), a subsidiary of LaSalle Bank Midwest, N.A., Troy, Michigan.  Today’s actions, part of a $16.85 million settlement by AAMG that also includes restitution payments, were the result of a joint investigation by the OCC and the U.S. Department of Housing and Urban Development (HUD). 

"Today’s actions represent an outstanding example of federal partners working together to investigate and enforce compliance with the law," said Julie L. Williams, Chief Counsel and First Senior Deputy Comptroller at the OCC.

The investigation focused on AAMG’s Federal Housing Administration (FHA) loan underwriting practices.  The OCC and HUD’s Office of Inspector General began their joint investigation of AAMG’s FHA loan underwriting practices after HUD alerted AAMG of suspected improprieties in its FHA loan processing.  AAMG conducted its own investigation and reported those findings to HUD and the OCC.

The federal government found that, during the period January 2000 through April 2003, AAMG engaged in a pattern of submitting loans to HUD for FHA insurance without proper review and certifications by appropriate direct endorsement underwriters as required by HUD.  The agencies asserted that this activity constituted, among other things, the making of false claims to the government in violation of the False Claims Act, 31 U.S.C. §§ 3729 et seq. and an unsafe and unsound banking practice under 12 U.S.C. § 1818.

The settlement payment, which will be made to the U.S. Department of Justice, includes $6.842 million that will be distributed to the FHA fund for purposes of restitution and indemnification.  The $16.85 million settlement also includes the OCC’s civil money penalty, which will be paid to the U.S. Treasury Department, along with other related fees and damages.

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• The OCC order is attached