LOS ANGELES (CBS) — Bank of America on Tuesday agreed to pay $67 million to settle charges of bid rigging, price fixing, and other anti-competitive practices that defrauded state agencies, local governments and nonprofit groups.
“This settlement means that government agencies facing lower budgets will recover millions of dollars in restitution for money that they were deprived of by some unscrupulous bond-derivative investment advisers,” Attorney General Jerry Brown said.
After an internal investigation, Bank of America voluntarily reported the scheme in 2004 to the federal Department of Justice and applied for the Corporate Leniency Program, which reduces potential criminal liability in exchange for cooperation.
Throughout Brown’s investigation, Bank of America cooperated in identifying California-based transactions and victims, according to the Attorney General’s office.
The settlement is part of a $137 million overall series of settlements agreed to by Bank of America with 20 states and federal agencies, including the Internal Revenue Service and the Securities and Exchange Commission, Brown said.
State agencies and nonprofits will receive about $6 million in restitution under today’s multi-state settlement, he said.
Brown said the illegal activities date back at least to 1998, and they include rigging bids, compensating losing bidders, submitting courtesy bids, deliberately losing bids and agreeing not to bid.
The schemes enriched the financial institutions and brokers at the expense of state agencies, cities, school districts and nonprofits, who received lower rates of return on investments or paid higher rates to protect
their funds, he said.
(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)