HOUSTON – A federal jury has found the entities formerly known as Allied Home Mortgage Capital Corporation (Allied Capital) and Allied Home Mortgage Corporation (Allied Corporation) as well as president and CEO Jim C. Hodge liable in connection with more than a decade of fraudulent misconduct related to Allied’s participation in the Federal Housing Administration (FHA) mortgage insurance program. The jury returned the verdicts late yesterday following a five-week trial, finding Allied and Hodge violated the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).

U.S. Attorney Kenneth Magidson of the Southern District of Texas and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement along with Julián Castro, Secretary of the Department of Housing and Urban Development (HUD), and HUD Inspector General David A. Montoya. 

The jury awarded the United States a total of $92,982,775 in damages, including $7,370,132 against Hodge specifically. Pursuant to the FCA, the damages in this case are subject to trebling. In addition, the court must impose a mandatory penalty of $5,500 to $11,000 for each violation. Separately, FIRREA also provides for a penalty for each statutory violation. U.S. District Judge George C. Hanks Jr., who presided over the trial, will determine the total penalties and damages at a later date.