Prospect Mortgage Pays $3.1M To End Kickback Probe

Law360, New York (July 14, 2011, 3:30 PM EDT) -- The U.S. Department of Housing and Urban Development announced Wednesday that Prospect Mortgage LLC had agreed to pay $3.1 million to end an investigation into its alleged kickback scheme.

California-based Prospect will pay $3.1 million and dissolve hundreds of joint ventures that HUD claimed were sham businesses geared at evading regulations and paying kickbacks to real estate brokers, banks and mortgage lenders.

“The real test for any bona fide affiliate business arrangement is whether the affiliate has sufficient capital and employees to stand on its own...
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