In a ruling issued on Thursday, a federal magistrate judge in Charlotte recommended dismissal of a government lawsuit alleging that Bank of America defrauded investors in a mortgage-backed security. The ruling, which is a win for Skadden, Arps, Slate, Meagher & Flom, may undermine the U.S. Department of Justice’s efforts to use a statute known as FIRREA to hold banks liable for the 2008 financial crisis.

Congress enacted FIRREA (the Financial Institutions Reform, Recovery and Enforcement Act) in the wake of the savings and loan crisis of the 1980s. The statute authorizes civil enforcement of various criminal offenses, such as wire fraud or making false statements. Prosecutors resuscitated the statute after the subprime meltdown and brought several cases under FIRREA in lieu of criminal indictments, hoping to take advantage of FIRREA’s generous statute of limitations and lower burden of proof.

The U.S. Attorney’s Office in Charlotte brought one such case against Bank of America in August 2013, alleging that the bank made false statements about the riskiness of home loans pooled into a $885 million securitization known as BOAMS 2008-A that it sponsored in 2008, and therefore is liable under FIRREA.

That case now appears headed for a quick demise. In Thursday’s ruling, U.S. Magistrate Judge David Cayer wrote that prosecutors failed to allege with sufficient particularity that BofA committed the predicate offense of making false statements to the government. The U.S. district judge assigned to the case, Max Cogburn Jr., must now decide whether to adopt Cayer’s recommendation.

The Justice Department also invoked FIRREA in a suit alleging that BofA’s Countrywide Financial unit originated faulty home loans in a program known as High Speed Swim Lane, or “Hustle,” and sold them to Fannie Mae and Freddie Mac. A jury returned a verdict in October 2013 that Countrywide engaged in fraud. The government is seeking $2.1 billion in damages, as The Wall Street Journal reported here.

Skadden’s John Carroll, Charles Smith, Boris Bershteyn and Amy Van Gelder represented Bank of America in the North Carolina case. Carroll declined to comment.