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Bothwell Law Group announces the conclusion of its clients’ seven-year long civil False Claims Act case against mortgage giants Taylor Bean & Whitaker Mortgage Corporation (TBW) and Home America Mortgage, Inc.

TBW Agrees To Pay More Than $320 Million For Fraud Allegations

Bothwell Law Group announces the conclusion of its clients’ seven-year long civil False Claims Act case against mortgage giants Taylor Bean & Whitaker Mortgage Corporation (TBW) and Home America Mortgage, Inc. The qui tam complaint was jointly filed in December 2006 by Stephanie Kennedy, former Vice President of Operations, and Comfort Friddle, former Home America loan processor. Defendants will pay more than $320 million to resolve allegations that they falsified loan applications, created false documentation, and misrepresented qualifications of applicants in order to secure federally-funded insurance for home loans that ultimately defaulted.

According to Relators, Greg Hicks, principal at Home America, and his hand-selected group of loan officers and processors tricked the Government into insuring bad loans by hiding or falsifying data about borrowers’ eligibility for various loan programs and their ability to repay. The loans were then sold to TBW, freeing up Home America to repeat the scam. When the loans inevitably defaulted, the Government insurance had to pay. In this fashion, defendants pawned off hundreds of millions of dollars in bad loans onto the federal government.

Farkas (TBW) In Prison, Case Continues Against Hicks (Home America)

Relators observed these practices firsthand, routinely witnessing falsification of credit scores, assets, income, and employment. When they tried to stop the fraud internally, Hicks fired them both. But the pair persevered. “When companies like TBW and Home America commit fraud, everyone suffers,” stated whistleblower Comfort Friddle. “It’s tempting to bury your head in the sand and pretend that you don’t see what’s happening, but if you don’t speak up, everyone is harmed. The effects of this kind of fraud will be felt throughout our economy for years to come.” From filing in 2006, Relators worked tirelessly to assist various Government agencies with related investigations. In 2010, Taylor Bean owner Lee Farkas was convicted of mortgage fraud and is presently serving a 38-month sentence. Relators continue their case against Home America president Greg Hicks.

Kennedy and Friddle were represented by nationally-recognized whistleblower attorneys, Mike Bothwell, Julie Bracker, and Jason Marcus of Bothwell Law Group welcomed today’s announcement, which marks the end of seven years of litigation. “I’m sure there are other people out there right now who are debating whether they should come forward,” Friddle said, “who feel led to do the right thing but are afraid. Those people should know they don’t have to be alone. Good lawyers will guide you every step of the way, explain what’s happening and how it affects the case, and make sure that the Government takes your claims seriously.”

Remarking on the significance of this settlement, whistleblower attorney Julie Bracker stated that, “When we filed this case in 2006, the mortgage crisis was barely a speck on the horizon, and FCA cases against mortgage companies were virtually unheard of. But were engaging in one of the most blatant examples of fraud we had ever seen, and we knew it had to be reported. Fortunately for the taxpayers, the False Claims Act is a flexible tool. We are delighted with the results, and honored to have represented these outstanding whistleblowers.”

False Claims Act Pays Percentage To Successful Whistleblowers

Federal and State False Claims Acts allow private citizens with insider knowledge of fraud, waste, and abuse to bring an action on behalf of the governments and to participate in the recovery of the stolen funds. These statutes allow governments to recover three times the amount they were defrauded, in addition to civil penalties of $5,500 to $11,000 per false claim. Successful whistleblowers can receive between 15 and 30 percent of the governments’ recovery. The amount to be paid in this case has yet to be determined.

The settlement was achieved through the coordinated efforts of a team of attorneys from the U.S. Department of Justice, the U.S. Attorney’s Office for the Northern District of Georgia, and HUD. The team was led by Sam Buffone from the Department of Justice, Joel Foreman of HUD, and at the USAO by Assistant U.S. Attorneys Dan Caldwell (retired) and Paris Wynn.

The case is United States ex rel. Friddle and Kennedy v. Taylor Bean & Whitaker Mortgage Corporation et al., Civil Action No. 06-cv-3023-JEC (N.D. Ga.).

Read the Full Press Release HERE.

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