An underwriter on a psychiatric hospital loan insured by the U.S. Department of Housing and Urban Development has settled allegations that he committed mortgage fraud.
The settlement was announced yesterday by the U.S. Department of Justice.
Robert Corp allegedly overstated the principal balance on a loan to Brylin Hospitals, a psychiatric and substance abuse facility in Buffalo, N.Y. He was reportedly trying to increase the amount of a refinance loan insured by HUD.
The alleged fraud led to higher mortgage insurance claims paid by HUD.
The Justice Department filed a lawsuit against Corp in May 2008. The complaint alleges violations of the False Claims Act, which imposes triple damages and penalties for false claims made in connection with federal government programs.
Yesterday’s statement indicated that Corp settled the allegations for $679,000.
“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,” Federal Housing Administration Commissioner David H. Stevens said in the news release.
