On November 8, 2013, Defendants filed their Motion to Dismiss, contending among “FIRREA authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud,” according to DOJ officials. Countrywide appealed the district court’s judgment, arguing that: (i) FIRREA does not permit claims against federally insured financial institutions on the theory that they engaged in fraud “affecting” themselves; (ii) the claimed predicate offenses of mail and wire fraud may not be based exclusively on a breach of contract; (iii) the district court erred in certain evidentiary rulings; and (iv) the district court erred in its calculation of the civil penalties. The $2.385 billion civil monetary penalty resolves claims under FIRREA, which authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. § 1001 (false statements) and 18 U.S.C. Section 951 of FIRREA authorizes the Justice Department to seek civil money penalties against persons who violate one or more of 14 enumerated criminal statutes (predicate offenses) that involve or “affect” financial institutions or government agencies. of 1989 (FIRREA), in lieu of criminal prosecutions. FIRREA modifies the predicate offenses by lowering the standard of proof from “beyond a reasonable doubt” to “preponderance of the evidence” and adds a lengthy 10-year statute of limitations, effectively doubling the period of limitations under otherwise applicable customs civil penalty laws. § 3293(2) establishes that the statute of limitations for various criminal offenses is extended to 10 years in cases where the conduct at issue “affects a financial institution,” and permits the Department of Justice (“DOJ”) … The government intervened and added claims under FIRREA, which imposes civil liability—in the form of civil monetary penalties—for certain criminal offenses (including violations of the federal mail and wire fraud statutes) that affect a federally insured financial institution. FIRREA authorizes the federal government to seek civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. 13-02-11, ... to establish the fraud necessary to support the predicate offenses of mail and wire fraud. 15-496, 15-499, 2016 WL 2956743 (2d Cir. Second, FIRREA allows the government to rely on a lower civil burden of proof for the predicate offenses. period. Inside A Closely Watched FCA and FIRREA Decision ... however, regarding how these penalties should be applied. (34) To trigger FIRREA, a defendant must commit one of fourteen predicate offenses. For example, in predicate offenses requiring an “affect” on federally insured financial institutions (“FIFIs”), such as mail fraud (18 U.S.C. The United States alleged that HSBC violated FIRREA by misrepresenting to investors the quality of its RMBS and the due diligence procedures it claimed it would use to ensure that quality. In a nutshell, FIRREA authorizes the DOJ to impose civil financial penalties for violations of specifically penalize conduct injuring financial institutions; others sweep more broadly, but only become FIRREA predicates when the defendant’s conduct “affect[s] a federally insured financial institution.” While FIRREA presents an attractive enforcement option, allowing for a civil standard of proof and the possibility of significant damages, it was not originally intended for its current use. Certain of those violations, including the most commonly alleged predicate violations, such as mail and wire A U.S. magistrate judge in North Carolina dealt a blow to government efforts to use the 1980s-era Financial Institutions Reform, Recovery, and Enforcement Act to penalize big banks, but many experts say the decision which is not binding may just be a temporary glitch. 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