The United States Law Week

High Court Urged to Reverse $300 Million Mortgage Fraud Ruling

Feb. 13, 2020, 7:41 PM

Two mortgage companies and their CEO want the U.S. Supreme Court to reverse a ruling ordering them to pay $300 million for defrauding a federal mortgage insurance program.

The U.S. Court of Appeals for the Fifth Circuit improperly used a less stringent “but for” causation standard when it affirmed that Jim C. Hodge and companies formerly known as Allied Home Mortgage Capital Corp. and Allied Home Mortgage Corp. violated the False Claims Act by making false certifications to obtain mortgage insurance, the petitioners told the Supreme Court.

The Fifth Circuit said it relied on a proximate cause standard, but it...

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