Bank Involved in Mortgage Fraud To Pay Nearly $11 Million

The U.S. Department of Justice announced on November 25 the settlement of a False Claims Act case involving a mortgage-fraud ring.  RBC Mortgage Co., a subsidiary of the Royal Bank of Canada, has agreed to pay nearly $11 million to the United States to settle the case.

The allegations were made in response to actions taken by a branch of the bank in Rockford, Illinois.  The bank, which was operating under RBC Mortgage’s former name, Prism Mortgage, was found to have made fraudulent statements to the U.S. Department of Housing and Urban Development regarding the credit, employment or source of equity on 219 loans made by three loan officers and 22 other defendants from February 2001 through April 2004.  All 219 loans resulted in foreclosures.

RBC Mortgage has not initiated a mortgage loan since September 2005, and all 25 defendants were convicted on federal charges.  One of the three loan officers was sentenced to 20 months in federal prison and ordered to repay nearly $500,000.  The other two loan officers were sentenced to probation and restitution.  Others sentenced to prison include two real estate agents who contributed to the scam, and the employees and owners of R&J Renovations, which provided fraudulent employment documents. 

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.