US mortgage firm Fannie Mae laid off around 700 employees this week — including hundreds of Indian-Americans. Around 200 people were fired over salary fraud allegations while others lost their jobs to a company-wide restructuring bid. The company has since cited ‘ethical’ reasons for the layoffs with reports indicating that the affected employees had misused the Fannie Mae matching grants program.

According to reports, around 200 people — mostly of Telugu origin — have been sacked for misusing the company initiative that added to employee donations towards charity. An update shared by Times of India explained that the issue centered around claims that some workers had teamed with non-profit groups such as the Telugu Association of North America and misused official funds.

Fannie Mae — known formally as the Federal National Mortgage Association — is a government-sponsored financial enterprise in the US. It had previously said that in early April that around 100 employees had been fired after being “caught engaging in unethical conduct — including facilitating fraud”.

“Since my swearing-in, we fired over 100 employees from Fannie Mae who we caught engaging in unethical conduct, including facilitating fraud, against our great company.  Anyone who commits fraud against Fannie Mae does so against the American people,” said William Pulte — the Chairman of the Board of Directors of Fannie Mae — in a joint statement with the US Federal Housing Finance Agency.

The number appears to have risen sharply in the ensuing weeks. Sources also told TOI that TANA was not the only non-profit organisation involved and investigation into other groups remains underway. The ‘scam’ also echoes a similar case involving Apple employees earlier this year. The company had reportedly laid off more than 100 workers after uncovering a fraud that inflated employee earnings.

Meanwhile Indian-American Congressman Suhas Subramanyam also took note of the layoffs and contacted the company to ascertain details. A statement from his office (quoted by The American Bazaar) said that the former employees had denied any wrongdoing and alleged that Fannie Mae did not carry out a proper investigation.