Go Mortgage Sues Former Exec For ‘Corporate Sabotage’

Go Mortgage is suing a former employee it accuses of “corporate sabotage” that cost the company millions of dollars in financial losses.

The national mortgage lender filed a lawsuit July 13 in U.S. District Court for the Southern District of Ohio, Eastern Division. It names Katie Chikonde, the company’s former director of capital markets, as the defendant.

Go Mortgage, which is based in Columbus, Ohio, states in the complaint that Chikonde abruptly resigned on July 10, 2022, but not before committing “acts of corporate sabotage, misappropriation of … confidential information and trade secrets,” as well as “breaches of her duties of loyalty and good faith” and breaches of her employment contract.

The complaint states that, in her role as director of capital markets, Chikonde was provided “unfettered access to the company’s sensitive and proprietary information, including pricing and cost data, consumer information, and loan profitability analysis.”

It continues, “As part of her duties, Chikonde was the primary contact between Go Mortgage and its institutional lenders, investors, and securitization counterparts,” and managed “Go Mortgage’s warehouse lines, pricing, hedging, and loan sales.”

The complaint states that, just before she resigned without notice, Chikonde contacted each of Go Mortgage’s warehouse lenders, investors, and government-sponsored enterprises, including Fannie Mae and Freddie Mac, “for purposes of defaming Go Mortgage and its officers and subjecting the company to ridicule.”

In part, the complaint states, she provided false information to the counterparties, “including, but not limited to, that Go Mortgage had no one to run its capital markets department.”

She also changed passwords and altered “specific company configurations with its counterparties,” the suit claims. 

That included introducing “false and inaccurate information and erroneous settings” to the Optimal Blue platform, which Go Mortgage uses as a Software as a Service (SAAS) platform for loan pipeline management. The complaint states that Chikonde was the “only authorized administrative user of the Optimal Blue interface,” and claims she took the actions “for purposes of causing economic damage and chaos in the wake of her departure.”

According to her LinkedIn profile, Chikonde worked at Optimal Blue, a unit of Black Knight Inc., for more than five years before joining Go Mortgage. 

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The complaint states Chikonde also introduced false information and inaccurate settings for Go Mortgage within the Fannie Mae portal, and deleted "business critical files” from Go Mortgage’s cloud hosted storage site.

Her actions were deliberate and disrupted Go Mortgage’s business operations for weeks, and were done with malicious intent and/or “designed to cause financial harm to Go Mortgage,” the complaint states.

As a “direct and proximate result” of Chikonde’s actions, the complaint adds, “Fannie Mae temporarily suspended Go Mortgage’s seller/service number, which caused the company to be unable to deliver loans.”

In addition, other counterparties terminated or temporarily halted doing business with Go Mortgage, forcing the company to “explain to these entities that it was ready, willing, and able to continue its business processes,” the complaint states.

Chikonde’s actions also resulted in Go Mortgage lacking visibility “as to the accuracy of information it used to manage its financial risks,” causing it to “hedge its loan pipeline based on false and inaccurate information. Ultimately, Chikonde’s conduct resulted in the company realizing severe financial losses.”

The complaint states that Chikonde’s actions were not discovered December, 2022, five months after she had quit. “By then, Go Mortgage had sustained millions of dollars of financial losses,” it states.

The complaint does not provide a specific total for the financial loss, but the company is seeking compensatory and punitive damages in excess of $300,000.

The complaint accuses Chikonde of violating the federal Computer Fraud and Abuse Act and the Defend Trade Secrets Act; the Wisconsin Trade Secrets Act; as well as a breach of contract, tortious interference with a business relationship, and breach of duty of good faith and loyalty.

The lawsuit seeks a jury trial, but a date for that has not yet been set.