Federal prosecutors sued Bank of America on Wednesday, accusing the bank of carrying out a mortgage scheme that defrauded the government during the depths of the financial crisis.

In a civil complaint filed in New York seeking $1 billion from the bank, the Justice Department took aim at a home loan program known as the "hustle," a venture that Bank of America inherited with its purchase of Countrywide Financial during the crisis. Prosecutors say the effort, created in 2007 but kept alive through 2009 by Bank of America, was designed to churn out mortgages at a rapid pace without proper checks on wrongdoing. The bank then sold the "defective" loans to Fannie Mae and Freddie Mac, the government-controlled housing giants, which were stuck with hefty losses and foreclosed properties.

"The fraudulent conduct alleged in today's complaint was spectacularly brazen in scope," Preet Bharara, the United States attorney in Manhattan, said in a statement. Mr. Bharara brought the case with the inspector general of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, and the government watchdog for the bank bailout program.

The case is the latest legal headache for Bank of America over its acquisition spree during the crisis. The bank in September paid $2.4 billion to settle a securities class-action lawsuit that it misled investors about the takeover of Merrill Lynch.

The Countrywide case is also the first time the Justice Department has taken action over the mortgage loans sold to Fannie Mae or Freddie Mac. But it overlaps with a steep pile of lawsuits against big banks filed by government agencies, as well as those brought by Fannie Mae and Freddie Mac.

A spokesman for Bank of America did not immediately return a request for comment.