On July 27, 2016, a three-judge panel of the Ninth Circuit Court
of Appeals in California issued a ruling in United States ex
rel. Hastings v. Wells Fargo Bank, NA, Inc., affirming the
district court dismissal of a qui tam suit on the grounds
that the relator was not an original source.
The relator had sued Wells Fargo and a number of other lending
institutions under the Federal Claims Act (FCA), claiming they had
falsely certified to the federal Department of Housing and Urban
Development (HUD) that they were in compliance with a regulation
requiring borrowers to make a down payment of at least 3%. Federal
regulations allow this down payment to be paid via gift, so long as
repayment for the gift is not "expected or
implied." See U.S. ex rel. Hastings v. Wells Fargo Bank,
Nat. Ass'n (Inc.), 2014 WL 3519129, at *1 (C.D. Cal. July
15, 2014) (summarizing HUD regulations).
