U.S. files mortgage fraud lawsuit against Wells By Rick Rothacker and Aruna Viswanatha Tue Oct 9, 2012 4:37pm EDT (Reuters) - The U.S. government filed a civil mortgage fraud lawsuit on Tuesday against Wells Fargo & Co, the latest legal volley against big banks for their lending during the housing boom. The complaint, brought by the U.S. Attorney in Manhattan, seeks damages and civil penalties from Wells Fargo for more than 10 years of alleged misconduct related to government-insured Federal Housing Administration loans. The lawsuit alleges the FHA paid hundreds of millions of dollars on insurance claims on thousands of defaulted mortgages as a result of false certifications by Wells Fargo, the fourth-biggest U.S. bank as measured in assets. "As the complaint alleges, yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance," said Manhattan U.S. Attorney Preet Bharara. The bank denied the allegations and said in a statement it believes it acted in good faith and in compliance with FHA and U.S. Department of Housing and Urban Development rules. It said it has previously disclosed the investigation and will vigorously defend itself. Bharara's office has brought similar cases in the past year, including one against Citigroup Inc unit CitiMortgage Inc, which settled the case for $158.3 million in February, and against Deutsche Bank, which paid $202.3 million in May to resolve its case. The U.S. Attorney's office in Brooklyn brought the biggest such case, against Bank of America Corp's Countrywide unit, which agreed in February to pay $1 billion to resolve the allegations. The Wells Fargo case is brought under the False Claims Act, which gives whistleblowers incentives to report fraud against the government, and under FIRREA, a little-used statute that has grown in popularity in the past year. Reporting by Rick Rothacker in Charlotte, N.C. and Aruna Viswanatha in Washington; editing by Matthew Lewis