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SALT LAKE CITY — Provo-based tech giant Vivint will soon pay $3.2 million to the U.S. Department of Justice to settle allegations that the company's employees made false statements to a federally insured bank.
"We are pleased to have reached this resolution related to certain past sales practices by some of our sales representatives," a company spokesperson said in an emailed statement on Friday. "In addition to cooperating with the DOJ, we have addressed the issues and continue to strengthen our compliance policies, practices and procedures."
The payment must be made within one week of the agreement, which was signed by Vivint Chief Financial Officer Dale R. Gerard on Monday.
The U.S. alleged that from 2017-2020, some Vivint sales representatives used their own money to pay for initial financing payments for Vivint customers who had used loans to buy Vivint products while making misleading statements to the federally insured bank providing the finances to make it seem like the borrowers had paid those initial payments — not the employees.
"Making false statements about the creditworthiness of borrowers undermines the integrity of our banking system and puts at risk the taxpayer dollars that help to support it," Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department's Civil Division said in a statement announcing the settlement with Vivint Smart Home Inc. "We will pursue those who fail to provide truthful information needed by federally insured financial institutions to make appropriate lending decisions."
The allegations were sent to the DOJ in a declaration submitted through the Financial Institutions Anti-Fraud Enforcement Act. Those who provide information about potential violations might be eligible to receive a portion of the funds. However, the whistleblower's share of the recovery in this particular case wasn't yet determined as of Wednesday.
The investigation into the case was headed by the U.S. Attorney's Office for the District of Utah and the fraud section of the Civil Division's Commercial Litigation Branch. The FBI assisted in the investigation as well.
"American business should be based on truthful disclosures, and false and misleading statements should never be part of dealings with federally insured financial institutions," said John W. Huber, U.S. Attorney for the District of Utah, in a news release. "This resolution should send a strong message to corporations that using fraudulent tactics to secure consumer sales will not be tolerated."
The settlement agreement notes it's "neither an admission of liability by Vivint, nor a concession by the United States that its claims are not well-founded."
