Fraud by hedge funds that participate in TALF

The Federal Reserve created the Term Asset-backed securities Loan Facility (TALF) in 2008 to increase credit available to households and small businesses for auto loans, student loans, small business loans and other consumer loans.

The Federal Reserve said that "any U.S. company that owns eligible collateral may borrow from the TALF, provided it maintains an account relationship with a primary dealer." This includes hedge funds, but use of offshore vehicles to conduct the transactions aren't permitted.

Most hedge funds conduct significant business through offshore accounts. If this practice were continued by a hedge fund that participated in  TALF, it could be violating the False Claim Act and subject to a qui tam lawsuit by a whistleblower.

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