Consumer Fraud

New York Law Firm Pays U.S. $6.1 Million to Settle False Claims Case

whistleblower housing mortgage 362x210 New York Law Firm Pays U.S. $6.1 Million to Settle False Claims CaseA New York law firm specializing in mortgage foreclosures has agreed to pay the U.S. more than $6 million to settle allegations that it caused the submission of false claims to Fannie Mae with inflated service expenses.

The U.S. Attorney for the Southern District of New York announced the agreement, saying that Rosicki Rosicki & Associates and its wholly owned affiliates, Enterprise Process Service and Paramount Land, “systematically generated false and inflated bills for foreclosure-related and eviction-related expenses,” and then caused the submission of those expenses to Fannie Mae.

Fannie Mae approved Rosicki to perform legal work in connection with foreclosures on residential properties for which it owned mortgages. Fannie Mae’s Servicing Guide requires that all foreclosure costs and expenses be “actual, reasonable, and necessary,” and that foreclosure law firms “must make every effort to reduce foreclosure-related costs and expenses in a manner that is consistent with all applicable laws.”  Federal prosecutors said that Rosicki understood those requirements and represented at various times that the firm was complying with them.

However, in its agreement with the U.S., the law firm admitted that from 2009 through 2018, Enterprise and Paramount added additional charges to the costs charged by independent contractors and deceptively increased costs and expenses on certain invoices. Those expenses were then submitted to Fannie Mae, the government said.

The settlement also resolves claims that the law firm and its subsidiaries defrauded the Veterans Administration in connection with eviction-related expenses that were submitted to and paid for by the VA.

The defendants “admitted and accepted responsibility for their conduct” and agreed to pay $4.6 million to settle the case, the U.S. Attorney’s Office said.

The U.S. said that the case stemmed from a lawsuit filed by a whistleblower under the False Claims Act. In a separate settlement agreement, the defendants agreed to pay the U.S. approximately $1.5 million to resolve the separate claims pursued by the whistleblower. As a result, recovery by the U.S. totaled approximately $6.1 million.