Bank of America (NYSE: BAC) thought it won a legal victory when a federal judge in Virginia ruled that the banks did not have to stand trial for its role in a real estate scam that victimized school teachers in Fairfax County, Va. But the revelation of a hot tub meeting involving a Bank of America employee has bubbled up, and led the judge to reverse his stand and rule that Bank of America should stand trial, reports the Washington Post.

The revelation stemmed from more than 700 pages of e-mails that hadn't been turned over at the time the judge mad his initial ruling. The e-mails showed a Bank of America loan officer discussing the "recovery appraisals" with others implicated in the alleged scam.

At issue is whether the participants sought appraisals that were flat out wrong in order get large loans approved for bogus land deals. Legitimate appraisals should be much lower values that couldn't support the large loans.

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