Whistleblower to get $56M in Bank of America case

Robert Madsen, one of four whistleblowers in the federal government’s $16.65 billion civil settlement with Bank of America, said keeping secret his cooperation with federal prosecutors for nearly four years had not been easy.

"It’s not a fun and pleasant experience," said Madsen, 47, a former employee of LandSafe, a property appraisal company that is a subsidiary of Bank of America. "You are under a court-ordered seal, and you have all this stress."

But for his efforts, Madsen is being rewarded. Madsen said federal prosecutors would pay him $56 million, out of the $16.65 billion Bank of America agreed to pay in August to settle claims arising from the investigation into the bank’s mortgage lending and mortgage securitization business. The specific terms of Madsen’s settlement with the federal government remain sealed.

In an interview Thursday, Madsen said he could not talk to many people about his behind-the-scenes cooperation with federal prosecutors, which involved turning over thousands of pages of documents and sitting for many interviews with an agent for the FBI.

And, he said, when the process of working with federal authorities began, there was no guarantee anything would come of his claim that Bank of America systematically overvalued distressed residential properties held on its balance sheet — much of it after the 2008 financial crisis.

In a confidential complaint Madsen filed in federal court in Manhattan against Bank of America in 2011, the appraiser said the bank deliberately used "improper appraisal practices" that overstated the value of the homes backing Bank of America’s portfolio of nonperforming loans by $6.6 billion. The 220-page legal filing said the improper appraisals at the bank’s LandSafe subsidiary continued until at least 2011.

Total Recall

Health officials are warning consumers to avoid prepackaged caramel apples because they are linked to four deaths and more than two dozen illnesses in 10 states. Caramel apples are most popular around Halloween, and the outbreak started just before then, in mid-October. But the commercially produced variety can have a shelf life of a month or more; some may still be on store shelves.

The Centers for Disease Control and Prevention said it knows of 28 cases in which people were sickened with the same strains of the bacterial illness listeria, and at least 26 were hospitalized. Of those, five died. Listeriosis contributed to four of the deaths; a fifth person who died had a strain of listeria linked to the caramel apples, but health officials do not think listeriosis caused that person’s death.

Christopher Braden, an epidemiologist at the CDC, said the agency is still trying to determine which brands are involved and how caramel apples may have become infected.

Braden said anyone with commercially produced, prepackaged caramel apples at home should throw them away, taking care to wrap them so animals or people going through trash don’t eat them.

Coming Up

» Monday: National Association of Realtors releases existing home sales for November.

» Tuesday: Commerce Department releases durable goods for November. Commerce Department releases third-quarter gross domestic product. Commerce Department releases personal income and spending for November. Commerce Department releases new home sales for November. Walgreen Co. reports quarterly financial results.

» Wednesday: Labor Department releases weekly jobless claims. Mortgage company Freddie Mac releases weekly mortgage rates.

» Thursday: Stock and bond markets are closed for Christmas Day.

Ship Ahoy!

Monday’s ship arrivals and departures: