California mortgage lender Capmark Finance target of False Claims Act lawsuit

The U.S. Department of Justice has filed suit under the federal False Claims Act against California mortgage lender Capmark Finance Inc. The suit alleges that Capmark included false statements when applying for federal mortgage insurance on residential nursing homes. Capmark sought the mortgage insurance as part of a federal program in which the U.S. Department of Housing and Urban Development (HUD) agrees to guarantee mortgage loans for the purchase of various healthcare facilities, including hospitals and nursing homes.

According to the complaint, Capmark made false statements when seeking a guarantee from HUD for mortgage loans made to purchase two nursing home facilities, one in Canoga Park, California and the other in Ghent, New York. After HUD accepted Capmark’s applications, the agency had to pay nearly $26 million when both Capmark facilities defaulted on their loans. Under the False Claims Act, the government will pursue triple damages and penalties.

The suit was filed in federal court in Los Angeles.

For the full story, go to the Department of Justice’s Press Release.