Law firm overcharged Fannie Mae ‘millions of dollars,’ lawsuit alleges

04/06/2018 12:24 PM |

A Plainview law firm whose principals also own Sparkling Pointe Winery and Vineyard in Southold has been charged by the U.S. Attorney’s office with overbilling Fannie Mae for “millions of dollars” in foreclosure expenses since 2009.

Geoffrey Berman, U.S. Attorney for the Southern District of New York, and Rene Febles, deputy inspector general for investigations with the Federal Housing Finance Agency, announced last Wednesday that a federal civil lawsuit has been filed against Rosicki, Rosicki & Associates, P.C., a foreclosure law firm, for engaging in a scheme to generate false and inflated bills for foreclosure-related expenses and submit those expenses to the Federal National Mortgage Association, known colloquially as Fannie Mae, for reimbursement.

Two wholly-owned affiliates of the firm, Enterprise Process Service Inc. and Paramount Land Inc., are also named as defendants.

The suit seeks triple damages and civil monetary penalties against the defendants, although the lawsuit doesn’t specify an amount.

Tom and Cynthia Rosicki, who are partners in the Rosicki firm, also are the owners of Sparkling Pointe, a Southold winery and vineyard that was co-winner of the 2017 New York Wine & Food Classic’s “Winery of the Year” award.

The Rosickis have been involved in numerous charitable endeavors in both New York City and Long Island. Last year, they gave $250,000 to Eastern Long Island Hospital’s remodeling campaign and donated space and wine at Sparkling Pointe for the hospital’s annual “Grateful Gathering.”

The federal lawsuit claims that from May 27, 2009, to the present, the Rosicki firm, which specializes in mortgage foreclosures, and its affiliates “defrauded Fannie Mae, a Government-Sponsored Entity.”

Specifically, it alleges, the firm “perpetrated a scheme” whereby Rosicki, acting as counsel to any one of numerous mortgage servicing companies, engaged Enterprise, a service processing company, and Paramount, a title search company, to serve process and perform title searches as required to effectuate a mortgage foreclosure for Fannie Mae-owned mortgage loans, according to the lawsuit.

“In reality, however, Enterprise and Paramount carried out these functions by engaging third-party vendors to perform the majority of the work, and then applied exponential mark-ups to those vendors’ bills for foreclosure-related services despite adding little or no value to the services that the vendors performed,” the lawsuit states.

In some cases, the markups were as high as 750 percent, according to lawsuit.

Enterprise and Paramount then submitted those bills to Rosicki, which in turn submitted them to Fannie Mae for reimbursement, according to the lawsuit.

While it doesn’t give a specific number, the press release from Mr. Berman said “the fraudulently inflated expenses caused Fannie Mae to pay millions of dollars of falsely inflated foreclosure expenses.”

The Rosicki law firm issued the following statement with regard to the federal accusations: “For over a quarter-century, Rosicki, Rosicki & Associates has been a highly-respected leader in the housing mortgage industry and widely admired for its dedication towards improving the broader community. The charges leveled against the firm are based on questionable legal theories, have no merit and will be vigorously challenged in court.”

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U.S. v. Rosicki Complaint-In-Intervention 0(1) by Timesreview on Scribd

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