Stonegate Accuses Mortgage Co. Of $5M Ponzi Scheme

Law360, New York (May 1, 2013, 9:47 PM EDT) -- Stonegate Mortgage Corp. has filed suit in New Jersey court against a mortgage partner it says operated a Ponzi scheme that defrauded Stonegate of at least $5 million by selling it mortgages for properties with unsatisfied liens against them.

Stonegate said in its complaint, filed April 18 in the Superior Court of New Jersey, that Capital Financial Mortgage Corp. colluded with title company Park Avenue Abstract Inc. to divert money intended to satisfy liens on properties whose mortgages Stonegate was buying.

Capital Financial misrepresented to Stonegate that...
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