The Change Company CDFI, LLC, the parent company of Non-QM-focused Change Wholesale and Change Lending, has secured a $94 million judgment from a New York state court against Yeti Global Services (YGS) and its sole owner, Adam Levine.
Levine was a former assistant White House press secretary under President George W. Bush who later served as an executive at The Change Company.
The court found YGS liable for tortious interference with contract and for aiding and abetting a breach of fiduciary duty by Levine. The Change Company had alleged Levine stole confidential documents and used them to build his new firm, YGS.
The $94 million judgement includes damages awarded to The Change Company for the harm caused by Yeti Global Services' actions in facilitating Adam Levine's alleged misconduct, including the theft and dissemination of documents and a purported extortion scheme.
The Change Company CEO Steven Sugarman thanked the court for the judgement and stated, “While the damage done by Adam Levine cannot be fully remediated, this is a great first step to secure justice for The Change Company.”
The Change Company will now pursue collection of the judgement amount from YGS. “Proceeds collected from this judgement will be utilized by The Change Company to further [its Community Development Financial Institution or CDFI] mission of financing homeownership for underbanked Americans,” according to Sugarman.
Earlier Serious Incident
A few years before this legal victory, there was another serious episode involving Levine: he was arrested on August 24, 2023, for impersonating a police officer, according to a statement from The Change Company.
The company claimed that after he was put on leave on March 2, 2023 due to certain misconduct it accused him of, Levine began threatening the Change Company and several of its employees. In its statement, The Change Company alleged the misconduct by Levine included racist remarks and behavior as well as potentially inappropriate conduct toward a female direct report.
“Levine also began threatening to go to regulators, the press, and others unless Change paid him over $6 million (the sum he claimed to have been paid by a prior employer for his silence),” the company alleged, adding also that Levine would later nearly double that demand amount.
This latest judgement gives The Change Company some vindication in the now years-long situation.
Regulatory Setbacks and Recovery
The case comes after heightened scrutiny surrounding The Change Company itself.
In June 2023, Levine filed a wrongful termination lawsuit against the Anaheim, Calif.-based nonbank mortgage lender, alleging that it “falsified information on its annual certification by mischaracterizing its loans.” Levine, who had served as chief of staff for Sugarman, specifically accused the Change Company of “mischaracterizing the race, ethnicity, and income level of borrowers.”
Shortly after, Change Wholesale lost its CDFI status, a certification by the U.S. Treasury Department to issue Non-QM mortgages to underserved borrowers.
The company in late 2023 resolved that dispute with the U.S. Treasury and regained its CDFI status through Change Lending, allowing it to continue offering products to underserved and minority borrowers.
As part of the settlement, Change did not need to reapply for CDFI certification until 2025.
The settlement agreement emphasized that neither Levine nor the Change Company admitted fault, error, or liability, and as of the date of the settlement, the Treasury had "not identified any findings or recommendations that would warrant action" against Change by the CDFI Fund, the agency within the Treasury that provides financial assistance and resources to CDFI lenders.
Key points of the 2023 settlement included:
- Change was reaffirmed as a certified CDFI lender in good standing with the Treasury;
- The Treasury deemed Change compliant with its CDFI lending obligations;
- Change committed to remaining an equal opportunity lender, with a particular focus on providing home loans to CDFI target market borrowers; and
- Change planned to offer new loan products aimed at underserved homeowners to expand its Non-QM platform.
