Federal prosecutors are wrestling with whether to file a civil fraud lawsuit against Angelo R. Mozilo, the former chief executive of Countrywide Financial, which was at the center of the subprime mortgage boom and bust, the New York Times reported today. This summer, the U.S. attorney’s office in Los Angeles was said to be close to filing a lawsuit against Mozilo over his role in Countrywide’s sale of millions of mortgages to home buyers with questionable credit histories. Prosecutors there were planning to move forward with a civil fraud lawsuit nearly three years after it had abandoned a criminal investigation of Countrywide and Mozilo, the firm’s co-founder. But Stephanie Yonekura, the acting U.S. attorney for the Central District of California, which includes Los Angeles, has had lingering questions about the litigation because of arguments raised by lawyers for Mozilo and other potential defendants. One such argument is that a civil fraud lawsuit would duplicate the efforts of the Securities and Exchange Commission, which sued Mozilo and two other former Countrywide executives in 2009. On the eve of the trial in 2010, Mozilo and the other defendants reached a settlement with the agency that required the mortgage financier to pay $67.5 million in fines and restitution. In settling that securities fraud and insider trading case, Mozilo and the two other former Countrywide officials, David Sambol and Eric Sieracki, neither admitted nor denied liability.
