Mortgage Fraud Results in Several Cases Totaling Over $100 Million Dollars Against PHH, Prospect Mortgage and Quicken Loans

Our Los Angeles based False Claims Act (“FCA”) attorneys report several multi-million dollar settlements from mortgage companies over allegations that they abused the government programs (such as FHA). Amongst the companies entering into settlements with the government are Quicken Loans, Prospect Mortgage and PHH Corp. The Department of Justice (“DOJ”) brought the whistleblower FCA cases on behalf of the Department of Housing and Urban Development, Department of Veterans Affairs, and the Housing Finance Agency. The alleged fraudulent activities involved unlawful mortgage origination and underwriting schemes. As such, these cases are examples of greed and result in almost $100 million dollar settlements. The PHH corp. settlement resulted in over $75 million dollars with almost $10 million dollars going to the whistleblower. The whistleblower, Mary Bozzelli, was a former employee who witnessed the illicit underwriting schemes.

Under the FCA, the Judge is entitled to order the defendant to pay triple the actual damages that the jury finds. In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant. As result, the whistleblower receives approximately 15 to 25 percent of the total FCA recovery plus attorney’s fees.

As the main enforcement arm of the federal government, the DOJ reviews all cases filed under the FCA. Then, once the whistleblower case is assessed, the government decides whether it will prosecute or allow the whistleblower to bring the complaint on the government’s behalf.  See these blogs for more examples.

The FCA is used to stem out fraud. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them. They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services. In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame. See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital. Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.