A California mortgage broker that allegedly submitted $2.4 million in fraudulent loans to Downey Savings and Loan Association, F.A., before it failed has been sued by the Federal Deposit Insurance Corp. While the broker operated as a corporation, the FDIC hopes to break the corporate veil and go directly after the owner.
On Friday, the FDIC filed a complaint in U.S. District Court for the Central District of California against Amerifund Financial Inc. Several individuals are also named as defendants.
The FDIC is acting as receiver for Downey Savings and Loan Association, F.A., which failed in November 2008. Its banking operations were acquired by U.S. Bank, N.A.
Amerifund, according to the lawsuit, was a mortgage broker based in the City of Spring Valley, Calif. The broker of record, defendant Eric Matthew Anderson, reportedly had total control over all of Amerifund’s operations.
Loan brokerage agreements between Downey and Amerifund were executed four times between March 2000 and September 2007. The agreements required Amerifund to present accurate financial statements and hold Downey harmless from losses caused by Amerifund.
Although Amerifund was a corporation — the FDIC claims that it ceased to exist as an independent entity and became the alter ego of Anderson. His personal assets were commingled with the company’s, and he paid himself far more than was appropriate for the business at the time. No corporate minutes or resolutions were kept, and shareholder meetings were not documented.
In fact, according to the FDIC, the company was created solely to shield Anderson from personal liability arising as a result of fraud and deceit.
Six fraudulent loans for $2,399,500 cited in the complaint were submitted to Downey in 2004 and 2005. The defendants allegedly “either knowingly or recklessly altered and/or inflated the borrowers’ stated incomes and assets; and/or understated the borrowers’ debts; and/or misrepresented the borrowers’ occupancy of the collateral property as their primary residence,” the lawsuit states.
The FDIC claims that losses from the mortgage fraud came in around $1.2 million.
Federal Deposit Insurance Corp., as Receiver for Downey Savings and Loan Association, F.A., Plaintiff, vs. Amerifund Financial Inc., et al., Defendants.
Case No. 8:11-cv-00840-DOC-RNB, June 3, 2011 (U.S. District Court for the Central District of California against Amerifund Financial Inc.)
