As published in the Milwaukee Journal Sentinel
Retained to represent a former employee of a mortgage brokerage after he unsuccessfully sued over allegedly unpaid commissions, a tiny Milwaukee, Wis., law firm wound up with a monster case. Researching Allied Home Mortgage Capital Corp. for Peter Belli's appeal, the Mahany & Ertl firm discovered Allied had the highest mortgage default rate in the nation, topping 50 percent, reports the Milwaukee Journal Sentinel on its Proof & Hearsay case.
A qui tam lawsuit under the False Claims Act resulted, which was recently taken over by the Department of Justice. Filed in U.S. District Court in Manhattan, it alleges some $834 million in damages, and seeks civil penalties and treble damages that could bring the total to $2.5 billion, as a Pro Publica article details.
The law firm could get as much as 25 percent of any government recovery.
"Our timing was just right," attorney Brian Mahany tells the newspaper.
Update:
The above article appeared in the Journal Sentinel in November 2011. In 2016, our case finally went to trial. In November 2016, a jury in Houston, Texas ordered Allied Home Mortgage to pay $92 million. CEO Jim Hodge was ordered to pay $22,110,396. A year later, the court ordered the damages tripled against Allied meaning it had to pay $268 million.
Said a senior Justice Department official, "Jim Hodge and Allied defrauded a federal mortgage insurance program designed to help spread the dream of homeownership, and then lied about it repeatedly. A jury saw through their lies, and now the Court has imposed millions of dollars in additional penalties. This Office will continue to investigate and root out fraud in all of its forms.”
Many appeals later, in 2020 Hodge and Allied lost for good.
Our case against Allied was one of many successful prosecutions of mortgage companies. To learn more or to see if you have a case, contact us online or by phone 800.669.7782. All inquiries are protected by the attorney - client privilege and kept confidential.