Law firm settles in Fannie Mae fraud case, must pay $6.1M

12/17/2018 5:05 PM |

A Plainview law firm whose principals also own Sparkling Pointe Winery and Vineyard in Southold has reached a settlement with the U.S. Attorney’s office in which it admits wrongdoing and will pay more than $6.1 million to resolve the government’s claims. 

In March, officials including Geoffrey Berman, U.S. Attorney for the Southern District of New York, announced they had filed a lawsuit against Rosicki, Rosicki & Associates, a law firm specializing in foreclosures, and its wholly-owned affiliates, Enterprise Process Service and Paramount, a title search company.

The lawsuit claimed they had engaged in a scheme to generate false and inflated bills for foreclosure-related expenses and submitted them to the Federal National Mortgage Association — Fannie Mae — for reimbursement. 

The settlement also resolves claims arising from identical misconduct in connection with eviction-related expenses that were submitted to and paid by the U.S. Veterans Administration, according to Mr. Berman.

Tom and Cynthia Rosicki, partners in the Rosicki firm, also own Sparkling Pointe Winery and Vineyard and residential property in Southold. They have supported numerous charitable endeavors locally, including donating $250,000 to Eastern Long Island Hospital in Greenport last year. 

As part of the Dec. 4, 2018, settlement approved by U.S. District Judge Jed Rakoff, the Rosicki, Enterprise and Paramount firms admitted and accepted responsibility for their conduct and must pay $4.6 million to the United States.

The three companies admitted that from 2009 through 2018, on certain invoices for service of process in connection with foreclosures or evictions, Enterprise tacked additional charges onto the costs billed by independent contractors and otherwise took actions that increased costs and expenses.  

Similarly, on certain invoices for foreclosure searches and title continuations, Paramount added to the amounts charged by independent contractors and otherwise took actions that increased costs and expenses. And the Rosicki firm submitted those costs and expenses for payment, with the understanding that Fannie Mae would reimburse for them, according to Mr. Berman. 

The settlement also requires the Rosicki firm to implement a compliance program with regular reporting over the next five years, and to publicly disclose the nature of its affiliation with Enterprise and Paramount on its website.

In a separate settlement, Rosicki, Enterprise and Paramount agreed to pay the United States an additional $1.5 million to resolve a case filed by a whistleblower under the False Claims Act, resulting in a total recovery by the  federal government of just over $6.1 million, according to Mr. Berman.

Prosecution of some of the whistleblower’s claims was taken over by the government in March.

Rosicki, Rosicki & Associates issued the following statement Wednesday: “We chose to resolve this matter in the best interests of our clients. Our practices and procedures adhere to the strictest principles and ethical standards of the legal profession, and we look forward to continuing to deliver the highest-caliber counsel that our clients have come to expect.”

Editor’s Note: This story was updated with additional comment from Rosicki, Rosicki & Associates.

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