The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), in coordination with the U.S. Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Northern District of Illinois’ Eastern Division, conducted a joint review of the former president and founder of MDR Mortgage Corporation.
MDR Mortgage provided annual verifications to HUD in 2006, 2007, and 2008, certifying that none of its principals, owners, officers, directors, or employees were involved in proceedings that could result or had resulted in criminal conviction, debarment, suspension, or civil monetary penalty by a Federal, State, or local government. However, on April 7, 2005, the former president and founder of MDR Mortgage was indicted in the U.S. District Court for the Northern District of Illinois, Eastern Division. The U.S. Government identified 237 loans that MDR Mortgage processed between January 2006 and August 2008 that had defaulted and resulted in claims paid by FHA. The U.S. District Court for the Northern District of Illinois found the former president and founder liable under the False Claims Act and Financial Institutions Reform, Recovery, and Enforcement Act for loans insured from 2006 through August 7, 2008, the period in which MDR Mortgage operated using the false verifications.
On November 23, 2016, a judgment of more than $10 million was entered against the former president and founder of MDR Mortgage in favor of the U.S. Government. Of the more than $10 million judgment, HUD’s loss totaled more than $3.4 million.