Barclays, HSBC and also bailed-out Royal Bank of Scotland are among 13 banks facing fraud allegations & a case for $1.15 bn [£700m] in damages in the US state of Virginia over the sale of home loan bonds throughout the financial dilemma.

The Virginia attorney general, Mark Herring, made the allegations, which relate to the sale of bonds to the state's retirement fund from 2004 to 2010.

He alleged the 13 Banks packaged up high-risk mortgage right into the bonds or safety and securities, which then were marketed to the Virginia Retirement System as, mostly, top-notch AAA-rated bonds. The retirement fund has 600,000 members including educators, workers from the city and also region governments, state cannon fodders, as well as court staff members.

'The message today is clear. It does not matter if you're a small-time con artist or a multibillion-dollar Wall Street bank. If you attempt to dupe or defraud Virginia customers or Virginia taxpayers, you will be captured and you will certainly be called to account,' said Herring, which is bringing the case after evidence collected by a whistleblowing analytical firm, IntegraREC.

The case filed in the Richmond circuit court shows the activities of banks in the runup to the financial situation proceeds to come under examination by the authorities, possibly threatening tries by Banks to enhance reputations that have been knocked by repeated accusations concerning their habits.

Last week HSBC became the latest bank to resolve claims that it made untrue portrayals in offering home mortgage bonds to the giant United States mortgage companies Fannie Mae and also Freddie Mac. HSBC paid $550m to the United States's Federal Real estate Finance Agency, which has actually filed 18 lawsuits.

Virginia alleges the banks fraudulently misrepresented the quality of the mortgages they packaged up and also offered to financiers such as the Virginia Retirement System. Baseding on the accusations, 40 % of the home mortgages sold on to the retirement fund had a greater threat of default than was revealed at the time they were gotten, leading to $383m of losses.

The law permits claims for treble the expected losses as well as the 317-page lawsuit additionally names arms of Citigroup, Countrywide, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, UBS and Washington Mutual.

'Every Virginian was harmed by the financial crisis. Homes were lost, pension were ruined, small businesses saw their credit rating dry up virtually overnight, and state and government budget plan cuts harm susceptible Virginians,' said Herring.

The lawsuit sets out three ways in which the banks mispresented the quality of the home loans being sold- the worth of the lending compared with the worth of the house, the owner tenancy rate and percentage of homes with a 2nd home mortgage.