Preet Bharara, the U.S. Attorney for the Southern District of New York, Helen R. Kanovsky, General Counsel of the U.S. Department of Housing & Urban Development, and David A. Montoya, Inspector General of HUD, announced that the United States has filed a civil mortgage fraud lawsuit against Golden First Mortgage Corporation, and its owner, operator, and president, David Movtady. The Government’s Complaint seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 for years of misconduct in connection with Golden First’s participation in the Federal Housing Administration’s Direct Endorsement Lender Program. The Complaint alleges that Golden First and Movtady intentionally, knowingly, and recklessly approved loans since 2002 that should never have been federally insured.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Golden First and David Movtady churned out bad loans and lied about their compliance with HUD requirements, leaving taxpayers on the hook for millions of dollars when the loans inevitably defaulted. This Office continues its work to hold the perpetrators of mortgage fraud accountable, as this latest complaint demonstrates.”
HUD General Counsel Helen R. Kanovsky said: “Our program depends on lenders properly originating FHA loans and certifying their compliance with our rules. Today’s complaint should send an unmistakable message that we will use the False Claims Act to protect working families and FHA’s insurance fund from allegedly unscrupulous lenders.”
HUD Inspector General David A. Montoya said: “The alleged utter disregard and willful failure to abide by the standards set by the FHA make this one of the worst examples of mortgage fraud that I have seen since becoming Inspector General. My office will continue its dedicated efforts to protect the integrity of FHA’s mortgage insurance program. Safeguarding HUD’s programs from exploitation and ensuring that they are managed with honesty, competency, and stewardship is our commitment to the public we serve.”