PNC Bank N.A. has agreed to pay $7.1 million over failing to engage in prudent underwriting practices in connection with the issuance of loans guaranteed by the Small Business Administration, the Department of Justice said Friday.
PNC, a Pittsburgh-based national banking association, also agreed to take corrective action to prevent similar occurrences in the future,the DoJ said.
The DoJ's claim was brought under the False Claims Act, an 1863 statute prompted by vendors overcharging the federal government during the Civil War or providing Union soldiers with shoddy munitions, materiel, food, and other goods and services.
A key provision of the FCA, which is increasingly being used to address alleged wrongdoing by financial services institutions, is that it encourages whistleblowing by paying a bounty to individuals whose reports of improprieties result in an award to the federal government.Also, the federal government can seek treble damages under the FCA.The DoJ took in $13.3
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