Whistleblower Wins $16 Million Settlement Against Bank That Inflated Rates on Government-Guaranteed Farm Loans

Roger Ediger knew something was wrong with his farm loan long before he could name the violation. As a borrower with Gold Banc Corporation and its subsidiary Gold Bank, one of the largest Farm Service Agency guaranteed lenders in Oklahoma, Ediger noticed his interest rates seemed high. He could not do much about it as a farmer. After debt forced him off his land, he became a law clerk, and the legal framework finally came into view.

Gold Banc had been inflating interest rates and improperly charging fees on federally guaranteed agricultural loans, then submitting those inflated figures as claims to the United States government. The practice affected borrowers across Oklahoma and Kansas. Ediger filed a qui tam complaint in October 2002 in the U.S. District Court for the Western District of Oklahoma under the federal False Claims Act, which allows private citizens to sue on behalf of the government and share in any recovery.

Pepper DeVaughn of what is now Parrish DeVaughn Injury Lawyers served as co-counsel for Ediger. The settlement agreement signed for the case identifies DeVaughn, then practicing under his full name Forrest L.P. DeVaughn, and Larry Lahman of Mitchell and DeClerck, P.L.L.C. as counsel for the relator, alongside Terry Oxford and Jonathan Bridges of Susman Godfrey L.L.P. The United States government intervened in the case, adding the weight of federal prosecutors to the litigation. Gold Banc maintained it wanted to avoid costly litigation and denied wrongdoing.

In November 2004, Gold Banc agreed to pay the federal government $16 million to resolve the claims. The U.S. Attorney for the Western District of Oklahoma called it the largest single False Claims Act settlement recovered on behalf of the United States in that district. U.S. District Judge David L. Russell presided over the case.

Ediger's relator award came next. After a full day of negotiations, Ediger and the U.S. Attorney's Office settled on a 19.1 percent share, yielding a personal recovery of $3,056,000. Within weeks, two class-action lawsuits were filed in Oklahoma City federal court on behalf of roughly 400 farm families in Oklahoma and Kansas who alleged they had been charged the same excessive fees.

Gold Banc also paid $500,000 in attorney fees and costs directly to Ediger's legal team. No reduction or remittitur of the primary $16 million settlement has been reported.