Bank of America Sued For Millions in Losses

Jones later received $145,000 from Walters's niece Jayrece Turnbull, another co-conspirator, according to the suit.

Jones, who has pleaded guilty to conspiracy, handled at least $17 million in fraudulent checks from 2000 to 2006, charging documents state; he was fired in early 2007 after questions about his dealings with Turnbull emerged. But federal authorities did not catch on to the scam until several months later, when SunTrust Bank raised questions about a large check handled by Turnbull.

Patrick O'Connell, a former deputy in the Texas attorney general's office who specializes in False Claims Act cases, said the law provides "a bigger stick for the government" that can force defendants into settlements to avoid larger losses.

"This is exactly what the law was intended to do," said O'Connell, who works in private practice. "If you do business with the government, you better do it right."

Nickles has said that he negotiated with Bank of America to attempt to reach a financial settlement. But "they did not make a proposal that seemed to me to fit the seriousness of the charges. Now they can see how serious we are," he said.

Nickles was asked how the city can convince the court that the bank should be liable, even though District officials failed to uncover Walters's scam for 20 years.

"One might want to believe the District should have picked it up," he said. "But the hints the District had at high levels were much less clear-cut than the hints, more than hints, that the bank had, which were these very large checks."