(Reuters) -
The U.S. Department of Justice sued Allied Home Mortgage Capital Corp and two
top executives over fraudulent lending practices that have cost the government
more than $834 million of insurance claims.
In a
complaint filed Tuesday, the Justice Department said Allied profited for years
as one of the nation's largest Federal Housing Administration lenders by
"engaging in reckless mortgage lending, flouting the requirements of the
FHA mortgage insurance program, and repeatedly lying about its
compliance."
Other
defendants in the lawsuit are Allied Chief Executive Jim Hodge, and Executive
Vice President Jeanne Steel. The lawsuit seeks triple damages under the federal
False Claims Act as well as civil penalties and other remedies.
Reached at
his Houston office, Hodge said "they're so absurd" when asked about
the alleged fraudulent lending practices and insurance claims. He had no
immediate additional comment. A spokesman for the company had no immediate
comment.
The
government filed the lawsuit with the U.S. District Court in Manhattan, six
months after accusing Deutsche Bank AG (DBKGn.DE) in a $1 billion fraud lawsuit
of misleading it into insuring risky mortgages. Deutsche Bank has sought
to dismiss that lawsuit.
(Reporting
by Jonathan Stempel in New York. Editing by Robert MacMillan)
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