The Ohio Public Employees' Retirement System (OPERS) is alleging fraud in a lawsuit against the Federal Home Loan Mortgage Corp.
The suit says Freddie Mac swindled OPERS out of $27 million when it "secretly and intentionally participated in one of the largest housing investment deceptions in modern U.S. economic times."
The lawsuit, filed Friday in federal court in Youngstown, alleges that Freddie Mac downplayed its investments in subprime lenders before its stock nosedived in November on news that it lost $2 billion in the third quarter, largely because of the collapse in the subprime market.
The Ohio Public Employees Retirement System, which represents nearly 900,000 current and retired government employees and their beneficiaries, lost up to $27.2 million in the crash, the lawsuit alleges.
[Ohio Attorney General Marc Dann's] office has named the retirement system as the lead plaintiff in the case, which could broaden to include other public pension plans.
In a press release announcing the lawsuit after the close of business yesterday, Dann said he is determined to hold mortgage lenders accountable for their role in the collapse of the subprime market.
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