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Federal prosecutors announced fraud charges late Monday against the former head of Deutsche Bank’s subprime trading unit, accusing him of knowingly selling $1.4 billion worth of real estate-backed securities backed by problematic loans.

According to prosecutors, Paul Mangione knew that key aspects of the home loans packaged as securities, including their compliance with lending standards, the borrowers’ ability to pay, as well as their fraud and appraisal accuracy, were misrepresentations. The charges were filed in the U.S. District Court for the Eastern District of New York.

“By allegedly misleading investors about the riskiness of these securities, Mr. Mangione prioritized his and his employer’s bottom line over principles of honesty and fair dealing,” said Acting Assistant Attorney General Chad Readler of the U.S. Justice Department’s civil division, which brought the charges. “The Department of Justice will continue to pursue those who engage in fraud as a way to conduct business.”

Mangione knew that Deutsche Bank’s wholly-owned subsidiary, DB Home Lending had questionable loan originating practices, even as he packaged two separate RMBS to be sold to investors—one for $1 billion and one for $400 million—in mid-2007.

Deutsche Bank agreed to a related $7.2 billion settlement with DOJ earlier this year.

Mangione face three counts of mail and wire fraud pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

Smith Villazor name attorney Patrick Smith said in a statement that the government’s suit against Mangione was “wrong and unfair,” while singling him out for “for blame on two ten-year old securitization transactions on which numerous other participants had more input and responsibility.”

Mangione denies participating in any fraud, his attorney said.

“The government, apparently succumbing to criticism that it has not held anyone accountable for the housing market collapse and the ensuing credit crisis, has concocted a baseless theory of a civil fraud that supposedly victimized federally insured banks rather than digging in and gaining a full understanding of what actually happened,” Villazor said.