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Peter Nickles: Bank of America Like Disney Land

Acting Attorney General Peter Nickles rarely minces words and it was no different when D.C. Wire caught up with him today to get his take on the $105 million lawsuit the city filed against Bank of America to recoup money lost, along with damages, in the D.C. tax office embezzlment scandal.

Nickles said he tried to negotiate a finanicial settlement with the bank that would have avoided a lawsuit. But "they did not make a proposal that seemed to me to fit the seriousness of the charges. Now they can see how serious we are," he said.

In the lawsuit, the city said former Bank of America assistant branch manager Walter R. Jones assisted and facilitated the cashing of bogus tax refund checks issued by former D.C. government tax manager Harriette Walters and her co-conspirators. The bank failed to give him proper training and failed to conduct oversight, the suit states.

"It made no sense to have these large checks being cashed and nothing adding up," Nickles said. "It sounds like a bank that would be in Disney Land. The proof is in the pudding. As soon they tried to do what they were doing for years at another bank, Suntrust Bank, a very low-level person said, 'What's going on here?' and the whole process came tumbling down."

Nickles was asked how the city can convince the court that the bank should be liable even though District officials failed to uncover the scam for the 20 years Walters was embezzling money.

"One might want to believe the District should have picked it up," he said. "But the hints the District had at high levels were much less clear cut than the hints, more than hints, that the bank had, which were these very large checks."

Even though the bank cashed $34 million in bogus checks, the city is seeking treble damages under the False Claims Act.

"The District has a very strong False Claims Act law," Nickles said. "I tried to point that out to Bank of America. Other cities do not have as clear and forceful a law as ours. It's a monster."

Bank of America spokeswoman Shirley Norton declined to comment on the lawsuit. "We cooperated fully with authorities," she said of the federal investigation that has led Walters and 10 others to plead guilty. Norton said that the company's lawyers need time to review the lawsuit before the bank makes any other statements.

By David A Nakamura  |  October 31, 2008; 3:53 PM ET
Categories:  City Finances  
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