3 former Fannie Mae execs sued

WASHINGTON, Dec. 19 (UPI) -- Former Fannie Mae chief Franklin Raines and two others have been sued by federal regulators for allegedly manipulating earnings to beef up income.

The administrative complaint seeks to recoup more than $115 million the trio received while the government-chartered mortgage finance company's earnings were reportedly misstated, the Washington Post said. The charges will be reviewed by an administrative law judge.

Raines, former chief financial officer J. Timothy Howard and former controller Leanne Spencer were accused of using a variety of schemes to meet profit goals and boost their compensation.

Lawyers for the former executives said the allegations were false and politically motivated.

The three "did very serious harm to this company," James B. Lockhart III, director of the Office of Federal Housing Enterprise Oversight, said.

He said they "improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls."