Justice Department Finds that Idaho Violates Federal Civil Rights Law by Unnecessarily Segregating People with Physical Disabilities

The US Department of Justice (DOJ) has announced its finding that Idaho unnecessarily segregates adults with physical disabilities in nursing facilities, in violation of the Americans with Disabilities Act (ADA) and the US Supreme Court’s decision in Olmstead v. L.C. DOJ’s findings, detailed in a letter to Idaho Governor Brad Little, follow a thorough investigation into the state’s service system for people with physical disabilities.

The ADA and the Olmstead decision require state and local governments to ensure the services they provide to people with disabilities are available in the most integrated setting appropriate to individuals’ needs. Community-based services can include assistance with daily activities, like showering or transferring from bed to wheelchair. Without community-based services, Idahoans with physical disabilities have little choice but to enter nursing facilities. Many will remain in those nursing facilities for years or decades, when they would prefer to live in the community. And each year of nursing facility care costs Idaho, on average per person, much more than what Idaho spends serving adults with physical disabilities at home.

According to the DOJ’s findings, 65% of Idahoans in nursing facilities have expressed a desire to live in the community, but 82% did not have an active discharge plan as of October 2024. In Idaho, about 19% of nursing home residents are younger than 65, and about 14% have low care needs.

DOJ’s investigation found that most Idaho Medicaid-funded nursing facility residents could live successfully at home with services Idaho offers. But Idaho limits access to services to transition out of nursing facilities and to live in the community. As a result, very few Idahoans with physical disabilities can access Idaho’s services to leave nursing facilities and remain at home. 

In-home nursing services can help people with disabilities with medication management, bathing, housekeeping, and more intensive care like managing medical devices. The DOJ letter says Idaho could remedy the ADA violations by expanding community-based services and allocating more resources to existing programs. By doing so, the state could not only improve outcomes for individuals with disabilities, but also save money on Medicaid expenditures, the report says.

The Civil Rights Division’s Disability Rights Section investigated this case with assistance from the U.S. Attorney’s Office for the District of Idaho.

For more information on the ADA, please call the department’s toll-free ADA Information Line at 1-800-514-0301 (TDD 800-514-0383) or visit www.ada.gov/topics/community-integration/.

Read the January 16, 2025 DOJ press release.

Read the January 19, 2025 Idaho Capital Sun article.

Justice Department Agreement with DoubleTree by Hilton Hotel Orlando at SeaWorld Resolves Allegations of Discriminatory Policy Against Hosting Arabs

The U.S. Department of Justice (DOJ) has reached an agreement with AWH Orlando Property LLC, the owner of the DoubleTree by Hilton Hotel Orlando at SeaWorld in Florida (DoubleTree), to resolve allegations that the DoubleTree discriminated against people of Arab descent in violation of Title II of the Civil Rights Act of 1964 (Title II). Title II prohibits discrimination on the basis of race, color, religion, or national origin in places of public accommodation, including hotels.

The owner, AWH Orlando Property, denied the allegations and did not admit liability. Attorneys for the owner said that both parties reached the agreement to avoid a prolonged legal process.

The lawsuit filed in the U.S. District Court for the Middle District of Florida alleges that the DoubleTree adopted and implemented a discriminatory policy against hosting guests of Arab descent by unilaterally canceling a conference that was to be held by the Arab America Foundation, a non-profit educational and cultural organization, in November 2023, a week before the conference was scheduled to begin and almost a month after the Hamas attack on Israel on October 7, 2023.

The lawsuit alleges that the DoubleTree’s decision to cancel the Arab America Foundation’s conference was not because of any legitimate, non-discriminatory reasons. Although the hotel claimed that the cancelation was because of security concerns, the hotel faced no security threats or risks associated with the conference. As alleged in DOJ’s complaint, contrary to what the DoubleTree told to the Arab America Foundation, it had not received any calls or other communications raising a safety or security threat to the conference or to the hotel. Rather, the decision to cancel was based on the national origin of the Arab America Foundation’s members and the conference attendees. The complaint therefore alleges that the DoubleTree discriminated on the basis of national origin and denied people of Arab descent the full and equal enjoyment of access to the services, accommodations, and privileges at the hotel.

The settlement, a consent decree that must still be approved by the court, requires the DoubleTree to:

• Issue a statement to the Arab America Foundation that all guests and groups are welcome to the hotel, including Arab and Arab American guests and groups;
• Retain a qualified compliance officer to oversee compliance with the consent decree for two years;
• Notify employees and executives of the DoubleTree’s obligations under Title II and the consent decree, including its commitment to ensuring equal access to the hotel, regardless of race, color, religion, or national origin;
• Establish a written anti-discrimination policy, which includes a system of accepting, investigating, and responding to guest complaints of discrimination;
• Conduct outreach to Arab or Arab American groups to share promotional materials about the hotel and indicate that it is open to all members of the public;
• Provide training to employees and executives on Title II and the company's obligations under the consent decree; and
• Make regular reports to DOJ to demonstrate its compliance with the consent decree.

Under Title II, DOJ’s Civil Rights Division can obtain injunctive relief that changes policies and practices to remedy the discriminatory conduct. Title II does not authorize the division to obtain monetary damages for customers who are victims of discrimination.

Read the January 16, 2025 DOJ release.

Read the January 17, 2025 CBS News article.

Justice Department Files Civil Rights Lawsuit Against Iowa Landlord for Sexually Harassing Tenants

 

The US Department of Justice (DOJ) has filed a lawsuit against Kurt Williams and Gearhead Properties LC, of Davenport, Iowa, for sexually harassing female tenants in violation of the Fair Housing Act (FHA). Williams has managed residential rental properties in Davenport since at least 2010.

The lawsuit, filed in the U.S. District Court for the Southern District of Iowa, alleges that, since at least 2010, Williams subjected female tenants to unwelcome sexual contact, exposed his genitals to female tenants, made requests for sex in exchange for reduced rent or other housing benefits, and evicted tenants when they did not give in to his sexual advances.

“Landlords who target vulnerable women by repeatedly demanding sex for themselves and their friends and retaliating against those who refuse with eviction actions and refusals to make repairs show an egregious abuse of power,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department remains committed to protecting tenants’ right to live in and access housing free of sexual harassment. We encourage survivors of sexual harassment to speak out so that we can vindicate their fair housing rights.”

The lawsuit seeks monetary damages to compensate persons harmed by the alleged harassment, civil penalties to vindicate the public interest, and a court order barring future discrimination. The lawsuit is the result of a joint investigative effort with the Department of Housing and Urban Development Office of Inspector General (HUD-OIG).

The FHA prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. It also prohibits sexual harassment, a form of sex discrimination. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental properties owned or managed by Kurt Williams or Gearhead Properties LC, or who have other information that may be relevant to this case, may contact the Justice Department by calling the U.S. Attorney’s Office for the Southern District of Iowa at (515) 473-9300. Individuals may also email the Justice Department at fairhousing@usdoj.gov or submit a report online. Reports also may be made by contacting HUD at 1-800-669-9777 or by filing a complaint online.

Read the January 17, 2025 DOJ press release.

The Mortgage Firm to Invest $1.75M to Settle DOJ Redlining Housing Discrimination Case

 

The Mortgage Firm, a Florida-based mortgage lender, has agreed to invest $1.75 million to settle a redlining case with the U.S. Department of Justice (DOJ), the parties announced. The DOJ accused the company of discrimination against predominantly Black and Hispanic neighborhoods in the Miami-Fort Lauderdale-West Palm Beach metropolitan area. The company ‘significantly underperformed’ its peers in generating applications from majority-Black and majority-Hispanic neighborhoods during 2016-2021. The complaint, filed in the Southern District of Florida, alleges violations of the Fair Housing Act and Equal Credit Opportunity Act. DOJ opened an investigation into The Mortgage Firm’s lending practices after receiving a referral from the Consumer Financial Protection Bureau. 

A spokesperson at The Mortgage Firm told HousingWire that “throughout its 29-year history, the company has been committed to providing equal credit access to all communities within its lending footprint. The complete absence of legal or regulatory violations on The Mortgage Firm’s record speaks for itself.”

The company received 9,375 mortgage applications during 2016-2021, of which 30.4% were from residents of majority-Black and majority-Hispanic neighborhoods. Its peers’ share was 59%. The complaint also pointed out that the company had its offices located predominantly in white neighborhoods and took inadequate steps to market to and develop referral networks within Black and Hispanic neighborhoods.

The proposed consent order, which awaits court approval, would require The Mortgage Firm to:

• Conduct a Community Credit Needs Assessment to identify the credit needs of residents of predominantly Black and Hispanic neighborhoods in the Miami MSA and to consider the results in developing future loan programs, marketing campaigns, and outreach efforts.
• Provide $1.75 million for a loan subsidy program to offer affordable home purchase, refinance, and home improvement loans in predominantly Black and Hispanic neighborhoods in the Miami MSA. The program may provide lower interest rates, down payment assistance, closing cost assistance, or payment of initial mortgage insurance premiums.
• Conduct a detailed assessment of its fair lending program in the Miami MSA regarding fair lending obligations and lending in predominantly Black and Hispanic neighborhoods.
• Enhance its fair lending training and staffing to ensure equal access to credit is provided across their market area, including by employing a Director of Community Lending.
• Expand its outreach and advertising efforts by having an office location in a majority-Black and Hispanic neighborhood in Miami-Dade County, translating its website into Spanish, and requiring all of its loan officers in the Miami MSA to market to majority-Black and Hispanic neighborhoods.
• Bolster connections with the community and build referral sources in predominately Black and Hispanic neighborhoods by providing four outreach events annually, six financial education seminars per year, and partnering with at least one community partners to increase access to credit in predominately Black and Hispanic neighborhoods in the Miami MSA.

A copy of the complaint, proposed consent order, and information about DOJ’s fair lending enforcement work, is at www.justice.gov/fairhousing. Anyone may report lending discrimination by calling DOJ’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.

Read the January 9, 2025 HousingWire article.

Read the January 7, 2025 DOJ press release.

Justice Department Sues Six Large Landlords for Algorithmic Pricing Scheme that Over-Charged Millions of American Renters

 

The US Department of Justice (DOJ), together with its 10 state co-plaintiffs, has filed an amended complaint in its antitrust lawsuit against RealPage, to sue six of the nation’s largest landlords for participating in algorithmic pricing schemes that harmed renters. The amended complaint alleges the landlords - Greystar Real Estate Partners LLC (Greystar); Blackstone’s LivCor LLC (LivCor); Camden Property Trust (Camden); Cushman & Wakefield Inc and Pinnacle Property Management Services LLC (Cushman); Willow Bridge Property Company LLC (Willow Bridge); and Cortland Management LLC (Cortland) - participated in an unlawful scheme to decrease competition among landlords in apartment pricing, harming millions of American renters. These landlords operate over 1.3 million units in 43 states and the District of Columbia. 

The Attorneys General of Illinois and Massachusetts joined the amended complaint as co-plaintiffs, increasing the total number of State and Commonwealth co-plaintiffs to 10 (California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, North Carolina, Oregon, Tennessee, and Washington). DOJ simultaneously filed a proposed consent decree with Cortland that requires it to cooperate with the government, stop using its competitors’ sensitive data to set rents, and stop using the same algorithm as its competitors without a corporate monitor.

The amended complaint alleges that the six landlords participated in a scheme to set their rents using each other’s competitively sensitive information through common pricing algorithms.  Along with using RealPage’s anticompetitive pricing algorithms, these landlords coordinated through a variety of means, including:

• Directly communicating with competitors’ senior managers about rents, occupancy, and other competitively sensitive topics. For example, Greystar supplied Camden with information not only about very recent renewal rates, but also its approach to pricing for the upcoming quarter, its acceptance of RealPage’s pricing recommendations, use of concessions and competitively sensitive information about occupancy. Similarly, executives at Camden and LivCor communicated over the course of months about their pricing strategies, including plans for certain price increases.
• Regularly conducting “call arounds.” During these discussions, referred to as “market surveys,” property managers called or emailed competitors to share, and sometimes discuss, competitively sensitive information about rents, occupancy, pricing strategies, and discounts.
• Participating in “user groups” hosted by RealPage. For instance, landlords discussed via user groups how to modify the software’s pricing methodology, as well as their own pricing strategies. For example, LivCor and Willow Bridge executives participated in a user group discussion of plans for renewal increases, concessions, and acceptance rates of RealPage rent recommendations.
• Sharing information with competitors about parameters in RealPage’s software. As an example, at the request of Willow Bridge’s director of revenue management, Greystar’s director of revenue management supplied its standard auto-accept parameters for RealPage’s software, including the daily and weekly limits and the days of the week for which Greystar used “auto-accept.”

DOJ also announced a proposed consent decree that, if approved by the court, would resolve its claims against Cortland, a landlord that manages over 80,000 rental units in 13 states. Under the proposed consent decree, Cortland would cooperate in the DOJ investigation and litigation and be barred from, among other things: (1) Using competitors’ competitively sensitive data to train or run any pricing model; (2) Using third-party software or algorithms to price apartments without the supervision of a court-appointed monitor; and (3) Soliciting, disclosing, or using any competitively sensitive information with any other property manager as part of setting rental prices or generating rental pricing recommendations.

As required by the Tunney Act, the proposed consent decree, along with the competitive impact statement, will be published in the Federal Register. The 1974 Act, also known as the Antitrust Procedures and Penalties Act, requires federal courts to review certain DOJ decisions.

Any person may submit written comments concerning the proposed consent decree during a 60-day comment period to Chief, Technology and Digital Platforms Section, Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite 8600, Washington, D.C. 20530. At the end of the comment period, the U.S. District Court for the Middle District of North Carolina may enter the final judgment upon finding it is in the public interest.

Proposed Final Judgment - US et al. v. RealPage Inc.pdf

Amended Complaint - U.S. et al. v. RealPage Inc..pdf

Read the January 7, 2025 DOJ press release.

US Department of Justice Corrects Legal Record on Horrific 1921 Tulsa Race Massacre

 

A new report by the US Department of Justice (DOJ) has concluded that the 1921 attack in Tulsa's Greenwood District was the result of racially motivated violence targeting Black residents, refuting an initial federal account from the time. A coordinated attack by thousands of White people led to the slaughter of hundreds of Black residents. DOJ conducted the reexamination of the case under the Emmett Till Unsolved Civil Rights Crime Act, which allows it to examine fatalities caused by civil rights crimes that occurred on or before December 31, 1979.

DOJ said a recent four-month reexamination of evidence in the case, known as the Tulsa Race Massacre, found that what an investigator described a month after the attack as spontaneous violence was, in fact, a coordinated effort by White perpetrators to decimate a thriving community known as “Black Wall Street.” The attackers, organized and aided by law enforcement, shot, beat, and arrested Black residents while burning and looting 35 city blocks over several hours on May 31, 1921, DOJ concluded. White authorities promised to help rebuild the community but instead put up barriers to financial assistance and offered no avenues for legal redress, investigators said.

The findings refute much of the initial report on the crime, in which a DOJ investigator at the time wrote that the violence was a “small” and “half-hearted” lynching attempt after a White man falsely accused a 19-year-old Black man named Dick Rowland of assaulting a White woman in an elevator.

Since then, historians have established a narrative consistent with DOJ’s new report, which is based on examining documents, witness accounts, and scholarly and historical research. The massacre “stands out as a civil rights crime unique in its magnitude, barbarity, racist hostility, and its utter annihilation of a thriving Black community,” Assistant Attorney General Kristen Clarke said. “Until this day, the Justice Department has not spoken publicly about this race massacre or officially accounted for the horrific events that transpired in Tulsa.”

Read the January 10, 2025 Washington Post article.

Read the January 10, 2025 DOJ press release.

Citadel FCU Redlining Settlement Proves It’s Time To Bring Credit Unions Under Community Reinvestment Act Enforcement

The recent U.S. Department of Justice (DOJ) law enforcement settlement with Citadel Federal Credit Union is excellent evidence why the Community Reinvestment Act’s (CRA) omission of credit unions from its rules is a mistake, according to the National Community Reinvestment Coalition (NCRC). Citadel FCU agreed to a $6.5 million settlement regarding its alleged discouragement of homebuyers in Black and Hispanic neighborhoods of Philadelphia from applying for mortgages and systematically declined to make mortgages in those neighborhoods. Citadel maintains its innocence in the settlement.

“It no longer makes sense to let credit unions out of the common-sense obligations that CRA puts on traditional banks. Citadel’s alleged conduct in the case it just paid $6.5 million to settle is a timely demonstration of the problem and the need to enhance fair lending protections for credit union customers. Despite their public perception as a gentler, kinder, more community-minded provider of retail banking services, credit unions are just as capable of violating borrowers’ civil rights as any other financial institution. Whatever the driving causes underlying such violations, we know how to fix the problem: Supervise credit unions under CRA so that they can prove their actual actions live up to their public image.”

Such failures and business practices are commonly uncovered in traditional banking through regular federal CRA examinations, which are conducted every few years. Extending CRA to cover credit unions would both improve oversight and put new capital into neglected communities as the firms move into compliance with the law’s requirements. Bringing credit unions under CRA would ensure that they face an affirmative and binding obligation to those same people and communities.

Read the October 15, 2024 NCRC article.

Justice Department Secures Over $6.5M from Citadel Federal Credit Union for Redlining Philadelphia Area Black and Hispanic Communities

 

The U. S. Department of Justice (DOJ) just announced that Citadel Federal Credit Union has agreed to pay over $6.5 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods in and around Philadelphia in violation of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA). This is DOJ’s first redlining settlement with a credit union under its Combating Redlining Initiative.

The DOJ complaint, filed in the Eastern District of Pennsylvania, alleges that, from at least 2017-2021, Citadel failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods in and around Philadelphia and discouraged people wanting credit there from obtaining home loans. Citadel’s home mortgage lending was disproportionately in white areas around Greater Philadelphia. Similar lenders generated mortgage applications in predominately Black and Hispanic neighborhoods at almost three times that of Citadel and originated mortgage loans in these areas over three times Citadel's rate.

The complaint also alleges that Citadel’s branches are situated almost solely in majority-White neighborhoods, with no branches in Philadelphia, which has over 75% of the majority-Black and Hispanic neighborhoods and 34% of the total population in Citadel’s market area.

Under the proposed consent order, subject to court approval, Citadel has agreed to invest $6.52 million to increase credit opportunities for communities of color in and around Philadelphia. Citadel will:

• Invest at least $6 million in a loan subsidy fund to increase access to home mortgage, home improvement, and home refinance loans for residents of majority-Black and Hispanic neighborhoods in Philadelphia.
• Spend at least $250,000 on community partnerships to provide services related to credit, consumer financial education, homeownership, and foreclosure prevention for residents of predominantly Black and Hispanic neighborhoods in its market area.
• Spend at least $270,000 for advertising, outreach, consumer financial education, and credit counseling in predominantly Black and Hispanic neighborhoods in Philadelphia.
• Open three new branches in predominantly Black and Hispanic neighborhoods in Philadelphia.
• Hire a community lending officer to oversee the continued development of lending in communities of color.
• Hire independent consultants to strengthen its fair lending program and better meet the communities’ mortgage credit needs.
• Conduct a community credit needs assessment, evaluate its fair lending compliance management systems, and conduct staff trainings.

With assets of approximately $6 billion, Citadel is headquartered in Pennsylvania and has 24 branches in Greater Philadelphia, including Bucks, Chester, Delaware, Lancaster, Montgomery, and Philadelphia Counties. The second largest credit union in the area with over 263,000 members, Citadel cooperated with the DOJ investigation.

Since 2021, the DOJ's Combating Redlining Initiative, a coordinated enforcement effort to address this persistent form of discrimination against communities of color, has announced 14 redlining resolutions and secured over $144 million in relief for communities of color that have been the victims of lending discrimination. 

A copy of the complaint and information about DOJ’s fair lending enforcement work is at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.

Read the October 10, 2024 DOJ press release.

Justice Department and North Carolina Reach $13.5 Million Agreement with First National Bank of Pennsylvania to Regarding Redlining

The First National Bank of Pennsylvania (FNB) has agreed to pay $13.5 million to resolve allegations by the U. S. Department of Justice (DOJ) and the State of North Carolina that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic North Carolina neighborhoods. Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of residents in those communities.

The complaint alleges that from 2017-2021, FNB failed to provide mortgage lending services to predominantly Black and Hispanic neighborhoods in Charlotte and Winston-Salem, and discouraged people seeking credit there from obtaining home loans. Instead, FNB’s home mortgage lending focused disproportionately on white areas of the cities. Other lenders had applications in predominantly Black and Hispanic neighborhoods at 2.5 times the rate of FNB in Charlotte and 4 times the rate in Winston-Salem. FNB’s branches in both cities were also mostly located in predominantly white neighborhoods. The bank closed its only branch in a predominantly Black and Hispanic neighborhood in Winston-Salem in 2021.

The complaint further alleges that FNB had mortgage loan officers working out of predominantly white areas to generate loan applications and that the bank did not track how they developed loan referrals or how they distributed the bank’s mortgage marketing materials.

Under the two proposed consent orders, FNB will invest $13.5 million to increase credit opportunities for communities of color in Charlotte and Winston-Salem, including: (1) $11.75 million in a loan subsidy fund to increase access to home mortgage, home improvement, and home refinance loans for residents of majority-Black and Hispanic neighborhoods in FNB’s service areas; (2) $1 million on community partnerships to provide services related to credit, consumer financial education, homeownership, and foreclosure prevention for residents of predominantly Black and Hispanic neighborhoods in those areas; (3) $750,000 for advertising, outreach, consumer financial education, and credit counseling for predominantly Black and Hispanic neighborhoods in the areas; (4) open three new branches in predominantly Black and Hispanic neighborhoods in the two cities, with at least one mortgage banker assigned to each branch; (5) hire a director of community lending to oversee the development of lending in communities of color; (6) retain independent consultants to enhance its fair lending program and better meet the communities’ needs for mortgage credit; (7) conduct a community credit needs assessment; (8) evaluate its fair lending compliance management systems; and (9) conduct staff trainings.

With assets of over $45 billion, FNB is headquartered in Pennsylvania and operates approximately 350 branches throughout the District of Columbia, Maryland, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia. It is among the 100 largest US banks.

*****

Photo by Andrew Stapleton on Unsplash

Read the February 5, 2024 DOJ release.

 Discrimination in Rental Housing

Property Management Company to Pay Nearly $75,000 to Resolve Service Members Civil Relief Act Claims

The U.S. Department of Justice (USDOJ) has announced that FPI Management Inc. (FPI) has agreed to pay $74,087 to resolve allegations that it violated the Service Members Civil Relief Act (SCRA) by imposing unlawful charges on nine service members who were exercising their right to terminate their apartment leases after receiving military orders to relocate. The SCRA extends various protections to service members to allow them to devote their entire energy to the national defense, including protections for service members in areas such as evictions, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, interest rates, foreclosures and automobile leases; and allowance to terminate their residential leases after entering military service or receiving military orders for a permanent change of station, deployment or retirement. Landlords are prohibited from imposing an early termination charge on service members who terminate their leases under the SCRA.

The USDOJ started investigating FPI’s leasing practices after receiving a referral from Coast Guard Legal Assistance about two times where FPI attempted to require service members who were terminating their leases early under the SCRA to repay discounts they had received when they signed the lease in Oakland, California. Under the consent order, FPI has agreed to pay $51,587 to the service members and a $22,500 civil penalty. The order also requires FPI to repair the service members’ tenant database entries, implement new policies and procedures complying with the SCRA, and train employees on the SCRA. 

Service members and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations: legalassistance.law.af.mil. 

Read the June 13, 2023 USDOJ release.

GE to Pay $1.5 Billion U.S. Fine overSubprime Mortgage Fraud.

April 12, 2019. General Electric Co will pay a $1.5 billion civil fine to resolve the US Department of Justice (DOJ) examination of defective subprime mortgages from its former WMC Mortgage unit before the 2008 global financial crisis. DOJ said the agreement resolves claims that GE concealed the poor quality of the loans and WMC’s lax fraud controls when packaging the loans into residential mortgage-backed securities that it then sold to misled investors. WMC was purchased by GE’s finance unit, General Electric Capital Corp, in 2004, and issued over $65 billion of mortgage loans in the next three years. DOJ said WMC overstated the quality of a majority of loans it packaged into residential mortgage-backed securities, and its fraudulent practices resulted in billions of dollars of investor losses. https://www.reuters.com/article/us-ge-settlement/ge-to-pay-1-5-billion-u-s-fine-over-crisis-era-subprime-mortgages-idUSKCN1RO233.