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Bust Those Banks! Whistleblower Wins Big in Record Breaking $70 Million Illinois False Claims Act Settlement

Date Published
Mar 26, 2024

MARCH 26, 2024. A historic settlement was reached in an Illinois False Claims Act case involving eight of the United States’ largest banks. Bank of America, Barclays, Citigroup, JPMorgan Chase, Morgan Stanley, Fifth Third Bancorp, BMO, and William Blair have agreed to pay $70 million to resolve allegations brought by a whistleblower, marking the largest settlement ever under the Illinois False Claims Act.

The state of Illinois hired the banks named in the case to market and price tax-exempt Variable Rate Demand Obligations (VRDOs) at the lowest possible interest rates, which are bonds used by state and local entities – municipalities, public universities, hospitals – to raise funds for infrastructure or more long-term projects. Instead of acting in the interest of the consumer, these banks allegedly colluded to inflate rates to collect millions in fees without providing the required services for which they were retained. These fraudulent activities allowed the banks to avoid having the VRDOs tendered back to them, further enriching them.

Edelweiss Fund LLC (Edelweiss) with its principal Johan Rosenberg, the whistleblower in the lawsuit, has over 30 years of experience in municipal bond advising, and began researching the reset of VRDOs rates in 2010. He wanted to shed light on the market and the potential for fraudulent behavior “because of the benefit the public receives from the critical government projects that VRDOs fund.” Rosenberg shared that, “In the years since the litigation began, we have uncovered much that was unknown about how this market is operated and how remarketing agents behave,” emphasizing the importance of whistleblower work and insider knowledge in promoting transparency and ethical practices.

For its efforts in the case, Edelweiss received the maximum 30% of the government’s recovery in this case. Part of the recovery, $22 million, helped to pay Edelweiss’ legal fees. This significant reward serves as a testament to how vital whistleblowers are in exposing fraud and protecting taxpayer dollars.

If you would like to report banking fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at

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