WASHINGTON — Citigroup agreed Monday to pay $7 billion to settle a federal investigation into its handling of risky subprime mortgages, admitting to a pattern of deception that Attorney General Eric Holder said “shattered lives” and contributed to the worst financial crisis in decades.
In addition to a $4 billion civil penalty being paid to the federal government, the bank will also pay $2.5 billion in consumer relief to help borrowers who lost their homes to foreclosure and about $500 million to settle claims from state attorneys general and the Federal Deposit Insurance Corporation.
The agreement does not preclude the possibility of criminal prosecutions for the bank or individual employees in the future, Mr. Holder said.
The Justice Department is investigating other financial institutions into the packaging and sale of risky home loans.
“We're not letting up, and we're not going away,” Tony West, the Justice Department's No. 3 official, said in announcing the Citigroup deal.
“We will continue to pursue these cases,” he said, adding that related announcements could come “in the very near future.”
Truck-stop firm’s fines
NASHVILLE, Tenn. — The truck-stop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam has agreed to pay $92 million in fines for cheating customers out of promised rebates and discounts.
According to the U.S. Attorney’s Office for the Eastern District of Tennessee, Pilot Flying J has accepted responsibility for the criminal conduct of its employees, 10 of whom have pleaded guilty to participating in the scheme.
The agreement was signed Friday by attorneys for the nation’s largest diesel retailer. The agreement does not protect any individual at Pilot from prosecution and requires the company to cooperate with an ongoing investigation of current and former employees.
VA benefits’ cost rising
WASHINGTON — Benefits for U.S. military veterans will cost an extra $1.14 billion in the next five years without management improvements in an agency already criticized for health care delays, according to an inspector general’s report.
The Department of Veterans Affairs inaccurately processed about one-third of the benefit claims during a two-month review and failed to make a final decision on claims for almost 6,900 veterans, according to testimony from the VA’s Office of Inspector General.
Octomom welfare fraud
LOS ANGELES — The California mother of 14 dubbed “Octomom” after she took fertility medication and gave birth to octuplets pleaded no contest Monday to welfare fraud and was sentenced to 200 hours of community service, officials said.
Nadya Suleman, 39, also was sentenced to two years of probation in the case in which she was accused of failing to report income to welfare officials while receiving public assistance, Los Angeles County District Attorney Jackie Lacey said in a statement.
Suleman was charged with failure to report nearly $30,000 in income from public appearances and videos, Ms. Lacey said.
Also in the nation ...
An online campaign has raised nearly $300,000 for Cassidy Stay, the teenage survivor of a shooting attack in suburban Houston last week in which her parents and four siblings were killed. ... Overcoming two months of delays, a Space Exploration Technologies’ Falcon 9 rocket blasted off Monday from Florida to put six small commercial communications satellites into orbit for ORBCOMM Inc.
— Compiled from news services