U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.


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.


Key Details
(mouse over or click items for details)
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.


Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.


We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

General Counsel

  •   2017-CH-1801-001-A

    Closed on October 11, 2019

    Acknowledge that the judgment awarded $10,373,998 against the former president and founder of MDR Mortgage to the U.S. Government, of which HUD’s loss totaled $3,452,499.