Categorized | Commercial

U.S. Sues MDR Mortgage Corp. President for False Data on Loans

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The president of an Illinois-based insurance company is facing a lawsuit from the United States Justice Department after he allegedly violated the False Claims Act.

Robert S. Luce, president and founder of MDR Mortgage Corp., is being held responsible for lying to the Department of Housing and Urban Development from 2005 to 2008. During this time, he claimed not to be under any sort of criminal investigation or indictment as he and his company originated loans insured by the Federal Housing Administration. According to the complaint filed by the U.S. Justice Department, however, he was in fact indicted for mail fraud, wire fraud, and obstruction of justice during that time period.

Much of the case against Luce is based on fraudulent activity taken by the company, which included creating false records, making false statements, and then submitting both to the HUD and FHA in order to obtain HUD mortgage insurance on all of the originated loans. Many of these loans have since defaulted, causing HUD to pay over a million dollars in insurance claims.

According to his lawyer, Luce will adamantly defend himself in the case, though if the ruling goes against him, he will face civil penalties, among other things. Tony West, an assistant United States attorney general spoke on behalf of the Justice Department in pointing out that such fraudulent activity serves to tarnish the name and purpose of the programs, and ultimately is a gross misuse of taxpayer money.

It should be noted that MDR is no longer involved with HUD loans, though as the U.S. Justice Department has made clear, the damage has already been done

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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