FINANCE COMPANY TO PAY NEARLY $4 MILLION TO RESOLVE MORTGAGE FRAUD CASE

The following excerpt is from the Department of Justice website: Friday, February 10, 2012 “Pennsylvania-based Lender to Pay U.S. $3.9 Million to Resolve False Claims Liability Related to Two Nursing Home MortgagesCare Facilities Located in New York and California Capmark Finance LLC in Horsham, Pa., has agreed to pay the United States $3.9 million, to settle a False Claims Act lawsuit, the Justice Department announced today.   The lawsuit, filed in the Central District of California, alleges that Capmark made false statements in connection with two nursing home mortgage loans insured by the U.S. Department of Housing and Urban Development (HUD).   Shortly after the United States filed its complaint in 2009, Capmark filed for bankruptcy protection.     The United States alleges that Capmark misrepresented material facts critical to the borrowers’ creditworthiness in the two loan applications and that Capmark’s false statements induced HUD to insure the loans, both of which defaulted, causing a loss to the government.   The two nursing homes were Canoga Care Center in Canoga Park, Calif., and Hudson Valley Care Center in Ghent, N.Y.   The allegations arise from investigation and audit work conducted by the HUD Office of Inspector General.   This case was handled by the Justice Department’s Civil Division with the assistance of HUD’s Office of General Counsel, Program Enforcement Branch.   “Today’s action should be a reminder to all FHA mortgage lenders.   Attesting to things you know to be false is not only lying, it is against the law and there will be consequences,” said Helen Kanovsky, HUD’s General Counsel.   This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force.   The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.   It includes representatives from a broad range of federal agencies, including regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.   The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial rimes."