Justice News

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, December 8, 2009
Syracuse Mortgage Underwriter to Pay United States Nearly $679,000 to Resolve Mortgage Fraud Allegations

WASHINGTON -- Robert Corp, a mortgage underwriter in Syracuse, N.Y., has agreed to pay the United States close to $679,000 to settle allegations that he defrauded the U.S. Department of Housing and Urban Development (HUD), the Justice Department announced today. This settlement resolves Corp’s liability under the False Claims Act, a federal statute that imposes triple damages and penalties for false claims made in connection with federal government programs.

The Justice Department filed suit against Corp in May 2008, alleging that he made false statements to HUD on an application for government insurance of a mortgage loan used to refinance the existing debt of Brylin Hospitals, a psychiatric and substance abuse hospital in Buffalo, N.Y. The mortgage insurance program authorizes HUD to guarantee mortgage loans used to refinance debt held by hospitals and other healthcare facilities. Corp allegedly overstated Brylin Hospitals’ existing debt in order to obtain a larger refinance loan, and HUD was required to pay more in mortgage insurance claims as a result of Corp’s allegedly false statements.

"Mortgage fraud is a top priority for this administration," said Tony West, Assistant Attorney General for the Department of Justice’s Civil Division. "We will aggressively pursue both individuals and corporations who defraud federal mortgage insurance programs, which are so important to this economy." Assistant Attorney General West noted that his case was a collaborative effort involving the Justice Department’s Civil Division, HUD’s Office of General Counsel – Office of Program Enforcement, and HUD’s Office of the Inspector General in Buffalo, New York.

"We have no tolerance for those who try to cheat the Federal Housing Administration or the taxpayer," said FHA Commissioner David H. Stevens. "It’s not just about protecting the financial health of the FHA insurance fund – this is about protecting each and every hospital and healthcare facility that looks to the FHA for safe and secure mortgage financing."

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