JUSTICE REACHES FAIR HOUSING SETTLEMENT WITH PROPERTY MANAGEMENT COMPANY, HOA

FROM:  U.S. DEPARTMENT OF JUSTICE 

Tuesday, August 13, 2013

Justice Department Reaches Settlement with Homeowners Association and Property Management Company in Fair Housing Lawsuit Involving Occupancy Limits

The Justice Department announced today that the Townhomes of Kings Lake HOA Inc. (HOA) and Vanguard Management Group Inc. have agreed to pay $150,000 to settle a lawsuit alleging violations of the Fair Housing Act (FHA).  The lawsuit alleged that the HOA adopted and both defendants enforced occupancy limits that discriminated against families with children at the Townhomes of Kings Lake, a 249-townhome community in Gibsonton, Fla.

Under the proposed consent decree, which must still be approved by the U.S. District Court for the Middle District of Florida, the defendants will pay $45,000 to the family that initiated the original complaint filed with the U.S. Department of Housing and Urban Development (HUD), $85,000 into a victim fund to compensate other aggrieved families, and $20,000 to the United States as a civil penalty.  In addition, the proposed consent decree prohibits the defendants from discriminating in the future against families with children and requires the defendants to receive training on the requirements of the FHA.  In January 2013, while the lawsuit was pending, the HOA modified its occupancy limits to permit four occupants in 2-bedroom townhomes, six occupants in 3-bedroom townhomes, and eight occupants in 4-bedroom townhomes.

“The Fair Housing Act ensures that families with children are not denied their housing rights based on discriminatory occupancy policies,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously enforce fair housing laws that protect the rights of families with children.”

The lawsuit, filed in October 2012, arose from a complaint filed with HUD by a family with six children that was living at the Townhomes of Kings Lake.  After the family moved into their 4-bedroom townhome, the defendants indicated there was a problem with the number of people living in the home and threatened to evict the family.  The family eventually moved out of the Kings Lake community.  After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department.  The lawsuit alleged that the defendants violated the family’s rights, that the restrictive occupancy policies discriminated against other families with children, and that the defendants engaged in a pattern or practice of discrimination or denied rights protected by the FHA to a group of persons.

“Twenty-plus years of HUD guidance and cases have put housing providers on notice that occupancy standards which unfairly limit or exclude families with children violate the Fair Housing Act,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to making sure that all people have equal access to the housing for which they financially qualify.”

LOAN OFFICER FOR MORTGAGE CO. GETS PRISON TIME FOR ROLE IN FRAUD SCHEME

FROM:  U.S. DEPARTMENT OFF JUSTICE
Monday, June 25, 2012
Loan Officer Sentenced to 54 Months in Prison for Role in Mortgage Fraud Scheme That Resulted in More Than $9.2 Million in Losses
WASHINGTON – A loan officer for a Florida mortgage company was sentenced today in Miami to 54 months in prison for his role in a mortgage fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, and Department of Housing and Urban Development (HUD) Inspector General David A. Montoya.

Alejandro aka “Alex” Curbelo, 32, of Miami was sentenced before U.S. District Judge Joan Lenard.  In addition to his prison term, Curbelo was sentenced to three years of supervised release and was ordered to pay $9.2 million in restitution to HUD.  Curbelo was indicted and arrested on Jan. 24, 2012, and pleaded guilty on April 16, 2012, to one count of conspiracy to commit wire fraud.

According to court documents, from approximately February 2006 through July 2008, Curbelo was employed as a loan officer for Great Country Mortgage Bankers.  In this role, he assisted in the sales and financing of condominium units at two complexes in Florida – Dadeland Place and Pelican Cove on the Bay.  The borrowers who Curbelo assisted at these two complexes were unqualified to obtain mortgage loans due to insufficient income, high levels of debts and outstanding collections.

Curbelo admitted that he conspired with others to create and submit false and fraudulent Federal Housing Administration (FHA) mortgage loan applications and accompanying documents to the lender on behalf of the unqualified borrowers.  Curbelo and others offered the borrowers cash back after closing as an incentive for them to purchase the units.  These payments were not disclosed properly during the loan application process.  According to court documents, the closing costs were paid on behalf of the borrowers by interstate wire.  After the loans closed, the unqualified borrowers failed to meet their monthly mortgage obligations and defaulted on their loans.

According to court documents, when the loans went into foreclosure, HUD, which insured the loans, was required to take title to the units and pay the outstanding loan balances to the lenders.  As of the date of the sentencing hearing, HUD paid more than $9.2 million for losses related to Curbelo’s conduct.

This case was investigated by the HUD Office of Inspector General, as participants in the Miami Mortgage Fraud Strike Force.  Trial Attorney Mary Ann McCarthy of the Fraud Section in the Justice Department’s Criminal Division is prosecuting the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
               
This prosecution is part of efforts under way by the Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, 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, to 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 crimes.

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."