Thursday, October 22, 2009
U.S. Files Civil Suit to Enjoin Fraud in Government Insured Mortgage Loans
Ideal Mortgage Bankers, Ltd. d/b/a/ Lend America, a mortgage lender located in Melville, Long Island, is the subject of a civil complaint seeking a court-ordered injunction to prevent the company from making loans insured by the Federal Housing Administration ("FHA"). The complaint, filed in federal court in Central Islip, also seeks relief against Lend America's Executive Vice President and Chief Business Strategist, Michael Ashley. The case has been assigned to United States District Judge Joseph F. Bianco.
As alleged in the government's pleading, Lend America participates in a federal program sponsored by the United States Department of Housing and Urban Development ("HUD") that authorizes Lend America to make mortgage loans that are insured by FHA in the event of default. As a condition of participation in the program, Lend America must determine that all borrowers who receive FHA-insured mortgage loans meet HUD lending standards. The complaint alleges that Lend America falsely certified to HUD that borrowers who received over $14 million in loans met HUD's lending requirements when, in fact, the defendants knew they did not.
The complaint was announced by Benton J. Campbell, United States Attorney for the Eastern District of New York; Kenneth Donohue, Inspector General for the Department of Housing and Urban Development; and Assistant Secretary David H. Stevens, Commissioner of the Federal Housing Administration.
"Fraudulent lending practices that compromise the integrity of the FHA mortgage insurance program and contribute to the alarming increase in loan defaults and housing foreclosures will not be tolerated," stated United States Attorney Campbell. "We will use all means at our disposal to stop those who engage in such activity." In May 2008, Mr. Campbell announced the formation of a task force comprised of federal, state, and local law enforcement agents and investigators to address the burgeoning problem of mortgage fraud.
HUD Inspector General Donohue stated, "One of our most important responsibilities is administering and enforcing procedures that protect our federal mortgage insurance programs from fraud. The complaint announced today, the product of a joint effort by the U.S. Attorney's Office, HUD's Office of Inspector General, and the Department of Housing and Urban Development, demonstrates our continuing commitment to this goal."
FHA Commissioner Stevens said, "Fraud against the Federal Housing Administration impacts every family that looks to the FHA for access to safe and reliable mortgage financing. Those who would seek to game the system should be on notice - play by the rules or you will face the consequences."
The government's case is being litigated by Assistant United States Attorneys Kevan Cleary, James H. Knapp, Edward K. Newman, and John Vagelatos.
mortgage fraud
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
