The U.S. Justice Department is suing Bank of America over alleged mortgage fraud perpetrated against Fannie Mae and Freddie Mac by Countrywide, the giant mortgage originator purchased by Bank of America.

The government's complaint seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 for engaging in a scheme to defraud the two government-sponsored enterprises, according to an announcement from Preet Bharara, the U.S. Attorney for the Southern District of New York.

Specifically, the complaint alleges that from at least 2007 through 2009, Countrywide and Bank of America implemented a new loan origination process called the "Hustle" (or "HSSL," for "High-Speed Swim Lane"), which was intentionally designed to process loans at high speed and without quality checkpoints. The Hustle generated thousands of fraudulent and otherwise defective residential mortgage loans sold to Fannie Mae and Freddie Mac that later defaulted, causing over $1 billion dollars in losses and countless foreclosures.