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In one of the most dramatic reversals of judicial fortune in the post-recession era, a U.S. appeals court reversed a jury’s ruling that Bank of America Corp. could be held liable for mortgage fraud during the years leading up to the 2008 financial meltdown.
The case in question, which was filed in 2012 and ruled upon the following year, involved the mortgage program nicknamed "Hustle" that was operated by Countrywide Financial Corporation, which was acquired by Bank of America in July of 2009. According to a Reuters report, the Second U.S. Circuit Court of Appeals in New York overruled the jury’s verdict by stating there was not enough evidence under federal fraud statutes to affirm liability. The court effectively voided the $1.27 billion penalty dealt to the bank.
"The trial evidence fails to demonstrate the contemporaneous fraudulent intent necessary to prove a scheme to defraud through contractual promises," stated U.S. Circuit Judge Richard Wesley in his decision.
The Justice Department did not immediately comment on the court’s action.