A group of 41 employees who were fired from Fannie Mae in April sued the agency's CEO and the head of the Federal Housing Finance Agency for defamation.

The former staff are seeking more than $2M each across three lawsuits alleging wrongful termination by Fannie Mae and defamation by CEO Priscilla Almodovar and FHFA head Bill Pulte.

The case stems from the firing of more than 100 staffers in April for what the government described as unethical conduct. Fannie Mae offered vague explanations for the move, but Pulte implied in a release at the time that at least some of the former employees had engaged in fraud.

“In President Trump’s housing market, there is no room for fraud, mortgage fraud, or any other deceitful act that can jeopardize the safety and soundness of the housing industry,” he said.

Almodovar thanked Pulte for “empowering Fannie Mae to root out unethical conduct, including anyone facilitating fraud,” in the same release.

The fired employees who are now suing say they were terminated as a group, effective immediately, during a Microsoft Teams call on April 2. They were told they violated the terms of Fannie Mae’s Charitable Giving program, a donation-matching benefit offered by the mortgage giant, but were not given a more specific explanation.

A week later, on April 9, Pulte explained the firings on Fox News.

“We also found that they were making donations to the charity and then getting kickbacks,” he told anchor Laura Ingraham.

The employees’ attorney, Milton Johns of Executive Law Partners PLLC, says in the lawsuit that Pulte’s statement is demonstrably false and meets the strict legal standards to qualify as defamation. The case against Almodovar says her public statement when the firings were announced amounted to defamation.

“My clients were dedicated Fannie Mae employees, some of whom gave a decade or more of service to Fannie Mae,” Johns said in an emailed statement. “They had spotless employment histories, and were terminated for cause without notice, without an opportunity to respond and without any evidence that any of them had done anything wrong.”

The cases against the two executives were filed in Fairfax County Circuit Court, while a breach of contract and wrongful termination suit against Fannie Mae was entered in U.S. District Court for the District of Columbia.

Fannie Mae and the FHFA didn’t respond to a request for comment Friday morning.

Most of the fired employees were of Indian nationality, and three Indian-American members of Congress questioned the motive for the mass firings shortly after they occurred.

In a letter to Pulte and Almodovar, the lawmakers expressed concern that donations made through the Fannie Mae program to Indian-American organizations “may have been used as a pretext to make indiscriminate cuts to Fannie Mae’s workforce and to tarnish employees’ reputations.”

Pulte arrived at the FHFA in March and appointed himself atop the board of directors at Fannie Mae shortly thereafter as part of a broader board shakeup.

Fannie Mae and Freddie Mac, which keep mortgage markets liquid by purchasing notes from lenders to bundle and sell back as securities, have faced extra scrutiny recently as the White House pushes to fully privatize the agencies.

President Donald Trump has met with the heads of major banks in recent weeks to hear their pitches on how to maximize the return to taxpayers from any initial public offering of Fannie Mae and Freddie Mac.

Pulte reportedly supports merging the two entities into a single public company. The White House is weighing an IPO that could raise up to $30B and value a single combined company around $500B.

If executed, it would be among the largest stock offerings in history.