HSBC Settles Fraud Charges Over Foreclosure Fees Paid by the US Government,Federal prosecutors in Manhattan on Tuesday announced a $10 million settlement with the British bank HSBC, accusing it of fraud over the way it submitted fees to the government when foreclosing on homeowners.
HSBC, prosecutors said, lacked the internal controls to review fees it incurred in the process of foreclosing — expenses that the bank ultimately passed on to the government for reimbursement. The bank, which admitted committing the misconduct as part of the civil settlement, cost the government millions of dollars in losses.
“Civil actions like these serve as an important tool that our office can and will continue to use in holding financial institutions responsible for misconduct,” Preet Bharara, the United States attorney in Manhattan, said in a statement.
In a separate statement, a spokesman for the bank said, “We are pleased to have settled this matter,” adding that the bank had “taken steps to enhance oversight” of the billing process.