Supreme Court Rejects $300 Million Mortgage Fraud Challenge

The U.S. Supreme Court said Monday it won’t review an appeals court’s conclusion that two mortgage companies and their CEO owe $300 million for defrauding a federal mortgage insurance program.

Jim C. Hodge and companies formerly known as Allied Home Mortgage Capital Corp. and Allied Home Mortgage Corp. had challenged the U.S. Court of Appeals for Fifth Circuit’s ruling that they violated the False Claims Act by making false certifications to obtain mortgage insurance.

Their petition asserted that the Fifth Circuit improperly relied on a less stringent “but for” causation standard, instead of a “proximate cause” standard, in upholding a ...