A lawsuit has been filed in federal court against a plethora of Ohio and Florida businesses by Regions Bank, which claims that it is owed $5 million from a mortgage fraud scam masterminded by the owner of a title and settlement company.
The Alabama-based bank filed the lawsuit in the U.S. District Court for the Northern District of Georgia against about a dozen companies and individuals including Cincinnati-Oh.-based title and settlement companies Groves Funding Corp., Home Loan Funding Corp. and Real Estate Benefit Plan.
Regions claims the defendants conspired to obtain funds from it through phony requests for mortgage loan funding.
Groves, Home Loan and Real Estate Benefit Plan did not return calls for comment.
The banking corporation claims Toby Groves, principal of Groves Funding Group, masterminded the plan. In court papers, the bank said Groves intentionally supplied false documentation in order to originate mortgage loans under a warehouse line of credit. Regions said it advanced the funds, but instead of closing loans and disbursing the money, the funds were forwarded either to Groves or to other businesses for Groves’ benefit.
Regions said it agreed to enter into a warehouse line-of-credit arrangement with Groves in 2005 and demanded the outstanding principal balance in 2007. A demand, Regions said in the lawsuit, that Groves failed to honor.
The defendants are being sued under Georgia law for, among other things, breach of contract, conversion, fraud and RICO violations.
In addition to monetary damages, Regions has asked the court to award it any personal property, money and other things of value traceable to the enterprise allegedly masterminded by the defendants.
Regions’ attorneys did not return calls for comment.
Regions Bank v. Groves Funding Corp., et al., was filed in June.
