Lawyer owes $10M-plus for false forms

Date Published: 
December 5, 2016
News Type: 
News
Program Area(s): 
Single Family Loan Programs

(Source: chicagolawbulletin.com) A federal judge has found an Aurora attorney liable for more than $10 million after previously finding he filed false documents with the government.

In a 12-page memorandum opinion, U.S. District Judge John J. Tharp Jr. ruled sole practitioner Robert S. Luce owes the government $3,452,499 in damages for 237 defaulted mortgage loans his mortgage company MDR Mortgage Corp. certified while it remained an approved correspondent for the Department of Housing and Urban Development and the Federal Housing Administration under false verification forms.

However, Tharp ruled that the total grow to $10,373,997 after damages are tripled as required by the federal False Claims Act and another $16,500 in fines are tacked on.

Michael S. Shapiro, an associate at Scandaglia Ryan LLP who represented Luce, said he and his client believe the judge’s ruling is incorrect, and they intend to appeal it.

The Luce-founded MDR served as an HUD loan correspondent from 1993 until 2008. While most of the loans it processed were already insured by the FHA and being refinanced for lower rates, about 5 percent of its business stemmed from originating new FHA-insured loans.

HUD requires loan correspondents to sign and submit annual verification forms that state no principal, owner, officer or employees within them are “currently involved a proceeding and/or investigation that could result, or has resulted in a criminal conviction, debarment, limited denial of participation, suspension or civil monetary penalty by a federal, state or local government.”...