HSBC will pay $10 million to settle a civil fraud case involving foreclosure fees paid by the U.S. government.
Federal prosecutors said the British bank failed to establish a quality control program, as required, to ensure that law firms' fees and charges were legitimate from 2009 to 2010 -- when foreclosures were soaring. HSBC passed the expenses on to the U.S. government for reimbursement. The lack of internal controls to review fees incurred during the foreclosure process cost Washington millions of dollars in losses.
HSBC admitted the misconduct as part of the settlement. "Civil actions like these serve as an important tool that our office can and will continue to use in holding financial institutions responsible for misconduct," Preet Bharara, the United States attorney in Manhattan, said in a statement.