Bank of America has joined the group of investment banks that are being sued by federal prosecutors in New York for carrying out mortgage schemes that defrauded the government during the country's financial crisis.
The accusations landed on Wednesday in a civil complaint that is seeking to collect $1 billion in damages from the bank.
The justice department focused on the home loan program created by the bank known as the "hustle." That program was created with the banks purchase of Countrywide Financial during the financial crisis that shook the nation.
"The fraudulent conduct alleged in two days complaint was spectacularly brazen in scope," United States attorney in Manhattan Preet Bharara, said in a statement, according to the New York Times.
Bharara brought the case in front of the inspector general of the Federal Housing Finance Agency, which monitors Fannie Mae and Freddie Mac, and the government watchdog for the bank bailout program, the Times reported.
Prosecutors claim the program that was created in 2007, was created to mix up mortgages at a rapid pace without the bank properly checking on wrongdoings.
Bank of America allegedly sold the "defective" loans to Fannie Mae and Freddie Mac, who are now stuck with heavy losses and a pile of foreclosed properties.
According to the Times, Bank of America paid $2.4 billion to settle a securities class-action lawsuit claiming that it misled investors about its takeover of Merrill Lynch.
