A Florida-based lender is under increased scrutiny over the management role of an employee because of his criminal record and involvement with a failed savings and loan in 1988. Two other employees with felony records have already cost the company a Georgia license while an Ohio originator for the company lost a license due to a mortgage fraud indictment.
The Florida employee, Michael R. Wise, is primarily involved in marketing at CFIC Home Mortgage, Chris Likens, owner of CFIC's parent company, told MortgageDaily.com in a telephone interview.
"He can't write checks; he can't give loans; he has nothing to do with loans; he has nothing to do with consumers," Likens said. "He has no say-so over finance; he has no say-so over growth; he's not in a position to set policy."
Likens is owner of Piggybanker Stock Co., which through subsidiary Challenge Financial Investors Corp. owns St. Petersburg, Fla.-based CFIC.
Wise was barred from banking because of his role in an S&L failure in 1988 and his admitted theft of $8.7 million from a mortgage company he established in 1995.
Likens said he hired Wise five years after his release from the U.S. Penitentiary at Leavenworth, Kan., where he served a 42-month sentence for two counts of wire fraud. Wise went to work in the Prairie Village, Kan., headquarters of Nations Holding Co., the parent of seven real estate related companies, which Likens also owns.
Because Wise had run analyses for Nations Holding Co.'s accounting department, Likens says he transferred Wise to Florida after purchasing Piggybanker three years ago and wanting to grow its mortgage unit.
But although Likens minimized the role of the felon, some employees maintained he essentially ran the office.
When contacted by MortgageDaily.com, Wise stated, "I don't have anything to say at this point."
However, in an e-mail sent to CFIC Corporate Associates and CFIC Career Advisors, all of whom were apparently unfamiliar with his criminal past, Wise admits, "I have made serious mistakes, the consequences of which will be with me for the rest of my life, and that is how it should be."
He said he was "blessed to have the opportunity" to work at CFIC, work he describes as "a labor of love."
CFIC is currently undergoing "an open examination that is confidential" by Florida's Department of Financial Regulations, Holly Hinson told MortgageDaily.com. "Other than that, I can't tell you more."
Likens described it as a traditional examination of the company's 2005 audit.
And admitting the revocation of the company's Georgia license in March, and the payment of a $193,000 fine, Likens said it was from the employment of two persons who had committed felonies, one of them a DUI, and the other which had "nothing to do with mortgage banking," and that both had been hired at an office before that office was purchased by CFIC.
CFIC will reapply for a new state license after the three-year waiting period, he said.
In Ohio, the Division of Financial Institutions has moved to revoke the license of a loan officer in a CFIC office after he was indicted as part of a mortgage fraud investigation.
Two years ago, Challenge paid a $2,000 fine to the State of Kentucky for its employment of two loan originators who had failed to register with Kentucky's Office of Financial Institutions.
CFIC and Challenge also are currently involved in several suits filed by former employees. In New Jersey, Challenge has been fighting a suit by a former employee over employment-associated agreements. And in Iowa and Florida, former employees have filed suits involving lack of overtime payments, both charging violations of the Fair Labor Standards Act.