The U.S. Department of Justice has conceded the battle against Bank of America in the “Hustle” case, according to media reports  on Wednesday.
The Wall Street Journal  reported that the DOJ has given up on trying to obtain a reversal of a federal appeals court decision that overturned a $1.27 billion penalty against Bank of America in late May 2016 .
A Bank of America spokesperson, when reached by email, told MReport that the bank had no comment.
A jury verdict in 2013 found Bank of America liable of mortgage fraud through Countrywide Loans’ High Speed Swim Lane (HSSL, or “Hustle”) program, and a judge ordered the bank in July 2014 to pay the $1.27 billion penalty. Former Countrywide executive Rebecca Mairone was fined $1 million for her alleged role.
In August 2016 , the 2nd Circuit U.S. Court of Appeals in New York denied the DOJ’s request for a new trial in the case, arguing that the May decision that overturned the verdict “overlooked a wealth of evidence” which established that Bank of America committed fraud through the Hustle program.
From the time the verdict and the penalty were issued, Bank of America fought to have both dismissed, claiming not only that the Hustle program ended prior the bank's 2008 acquisition of Countrywide, but that the government's accusations in the case amounted only to breach of contract and not fraud. On May 23, 2016, the 2nd Circuit Court overturned both the jury’s verdict and the judge’s imposed penalty as well as the penalty against Mairone.
The original lawsuit was filed by Manhattan U.S. Attorney Preet Bharara’s office against Bank of America in 2012 based on a complaint from whistleblower Edward O’Donnell, a former Countrywide executive.