The United States has filed a civil mortgage fraud lawsuit against Deutsche Bank AG and its wholly owned subsidiary, MortgageIT Inc.
The government’s complaint seeks damages and civil penalties under the False Claims Act for repeated false certifications made to the U.S. Department of Housing and Urban Development (HUD) in connection with the residential mortgage origination and sponsorship practices of MortgageIT.
To date, the Federal Housing Administration (FHA) has paid insurance claims on more than 3,100 mortgages, totaling $386 million, for mortgages endorsed by MortgageIT.
Preet Bharara, U.S. Attorney for the Southern District of New York; Tony West, Assistant Attorney General for the Justice Department’s Civil Division; Helen Kanovsky, General Counsel of HUD; and Michael P. Stephens, Acting Inspector General of HUD, made the announcement today.
According to the government’s complaint filed today in Manhattan federal court: Between 1999 and 2009, MortgageIT was an approved direct endorsement lender, and endorsed more than 39,000 mortgages for FHA insurance, totaling more than $5 billion in underlying principal obligations.
The government’s complaint seeks treble damages and penalties under the False Claims Act for the insurance claims already paid by HUD for mortgages wrongfully endorsed by MortgageIT through the false statements of Deutsche Bank and MortgageIT.
“Many working families count on FHA’s mortgage insurance program to help them achieve the dream of home ownership,” said Assistant Attorney General West. “According to our complaint, these lenders put millions of dollars of taxpayer funds at risk and violated the integrity of this important program by making false certifications to HUD.”
Defendant: Deutsche Bank AG, MortgageIT Inc.
Criminal Charges: Mortgage Fraud under the False Claims Act
City and State: New York
Exact Date: January 2007 (acquisition), 1999-2009 (fraudulent activities)
Sentence or Outcome: Ongoing lawsuit, seeking damages and civil penalties
Dollar Amounts: $386 million, $5 billion in underlying principal obligations
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Key Facts
- State: Federal
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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