Settlement to aid Pa. entities
Bank of America Corp. has agreed to a sweeping $137 million settlement with state and federal authorities to resolve its role in an alleged bid-rigging scheme that has been under investigation since 2006.
About 120 authorities, school districts and nonprofits could receive slices of Pennsylvania's $4 million share of the multi-state settlement, according to Pennsylvania Attorney General Tom Corbett's office.
Awards will likely range in size from $10,000 to $100,000, though precise figures weren't immediately available, said Corbett spokesman Nils Fredericksen.
"We believe it will cover the losses for the Pennsylvania entities. It will make them whole," Fredericksen said.
A list of settlements posted to the Securities and Exchange Commission website showed the Allegheny County Airport Authority, which operates Pittsburgh International Airport, is due $98,462.
Other Pittsburgh-area claims could come from the city-county Sports & Exhibition Authority, Allegheny County Department of Economic Development; Ross and Moon townships; and Mars Area, Pine-Richland and Norwin school districts, according to Corbett's office.
A national claims administrator will contact affected entities, Fredericksen said.
The settlement is the end result of a February 2007 leniency agreement the Charlotte bank reached with the Department of Justice, which spared it from criminal investigation in return for its cooperation. Bank of America is paying restitution but no fines, as authorities continue to investigate other major financial institutions.
The settlement resolves allegations that the Charlotte bank defrauded state agencies, cities and towns, and nonprofits that bought a type of investment called municipal bond derivatives. The practices occurred between 1998 and 2003.
"The regulatory agencies recognized that the bank stepped forward and reported evidence of improper bidding practices in the industry, cooperated extensively and assisted investigations by the Justice Department, the Securities and Exchange Commission and other law enforcement and regulatory entities," Bank of America said in a statement. "The bank also took appropriate personnel actions and other measures to ensure that these or similar practices would not occur again."
The bank will pay $25 million to the IRS, plus another $107 million worked out with other agencies and $4.5 million to state attorneys general for costs related to the investigation. Other agencies involved in the settlement were the SEC, the Office of the Comptroller of the Currency and the Federal Reserve, said the office of the North Carolina attorney general.
