In 2008, before the Great Recession was in full swing, Bank of America bought Countrywide Financial, in efforts to solidify its position in commercial banking, according to NPR. Thinking it got a great deal, instead what Bank of America bought was lots of liability.

As we continue to witness the fallout of the Great Recession, and bailout of banks deemed “too big to fail,” Bank of America is dealing with punches from all sides, when not coincidentally, in the space of a week it’s nearing settlement terms with the Department of Justice, and was ordered by a federal judge to pay $1.27 billion in damages.

Bank of America Fraud Case

A whistleblower accused Countrywide and one of its officers, Rebecca Mairone, of initiating a process dubbed “Hustle,” which consisted of Countrywide writing risky loans, which it then sold to Fannie Mae and Freddie Mac, by misrepresenting the quality of the loans. (Since Bank of America is Countrywide’s successor in interest, moving forward we’ll just refer to Bank of America.)

The Damages Order

Having been found liable by a jury, the district judge had to determine the damages award. Noting the “Hustle” process only lasted nine months, Judge Jed Rakoff found that the process was “from start to finish the vehicle for a brazen fraud by the defendants, driven by a hunger for profits and oblivious to the harms thereby visited, not just on the immediate victims but also on the financial system,” Reuters reports. As such, he ordered Mairone to pay $1 million in installments, and ordered Bank of America to pay the government nearly $1.27 billion by September 2.

First came J.P. Morgan, then Citibank, and we all knew Bank of America would be next. As of this writing, the Department of Justice and Bank of America are close to striking a $17 billion (that’s with a “B”) deal – “the largest sum the Justice Department has ever extracted from a single company” – if it doesn’t fall apart, says The New York Times.

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