Wells Fargo whistleblower lawsuit from 2011 unsealed

CHARLOTTE, N.C. — A big bank in Charlotte is being sued over allegations connected to the mortgage crisis.  It's not Bank of America. Wells Fargo is the target of a whistleblower lawsuit charging it took money from federal programs while hiding "mismanagement and fraudulent practices."

The lawsuit was filed under seal in 2011 and wasn't made public until this week.
 
Legal expert James Wyatt says the U.S. Justice Department has likely been checking into the lawsuit's allegations ever since. 

"Once it's filed, it stays under seal while the government has time to investigate it," Wyatt said.

The accusations come from two whistleblowers, including Robert Kraus, a former Wachovia employee from Union County. 
They raised questions about how Wells Fargo, which took over Wachovia, handled home loans during the height of the financial crisis.

University of North Carolina at Charlotte economist John Connaughton said the accusations are similar to others that have cost rival Bank of America billions of dollars in fines and settlements. 

"Basically it's the same thing," Connaughton said. "It's certifying mortgages as being complying when, in fact, they weren't complying."

One part of this whistleblower suit is different though. 

The U.S. Justice Department has declined to join the whistleblowers in the suit, leaving them to pursue the case on their own. 

"The government is saying we've looked at it and we don't want to devote our resources to it.  We don't want to be involved at this point," Wyatt said.

Robert Kraus didn't respond immediately to requests for comment.  Wells Fargo issued a statement saying it believes the lawsuit is "without merit."

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