VA Attorney General Sues Major Banks for $1Billion

Fraud Lawsuit Photo

Attorney General Mark Herring announces the lawsuit in front of the John Marshall Courts Building in Richmond.

State Attorney General Mark Herring has announced a  $1.15-billion lawsuit against some of the world’s largest commercial banks for allegedly committing fraud against Virginia taxpayers during the nation’s frenzied real estate bubble.

The court documents—which were filed earlier this year but just unsealed—accuse the banks of bundling both sound and risky mortgages into toxic securities that were then fraudulently sold to the Virginia Retirement System.  And as Virginia Public Radio’s Anne Marie Morgan reports, when the real estate bubble burst, the value of the state pension fund plummeted.

The lawsuit was filed in Richmond Circuit Court against 13 banks, including Citigroup Global Markets, Countrywide Securities, and Goldman, Sachs.

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