Caterina Platt
Senior Member
- Joined
- Jan 17, 2002
- Professional Status
- Certified Residential Appraiser
- State
- New Mexico
Future MBA President Charged With Embezzlement and Fraud
John Courson, slated to become the president of the Mortgage Bankers Association of America at year’s end, stands accused in a civil lawsuit of defrauding 11 former branch managers and embezzling $879,000 as his California-based brokerage collapsed in 2007. In a separate lawsuit filed last year, Courson was accused of misappropriating $1.6 million by now-defunct Lehman Brothers Bank.
The 66-year-old mortgage banker is currently the chief operating officer of the MBA, an industry group representing roughly 2,400 companies and 370,000 professionals throughout the mortgage sector.
The MBA maintains a vast lobbying operation, spending roughly $3.0 million on related expenditures in 2007 and $2.2 million in the first half of 2008.
Courson has been a powerful figure on Capitol Hill, playing a key role in several major housing initiatives this year.
Last week, Courson sent letters to House and Senate members urging them to pass legislation to allow the Treasury to buy up billions in troubled mortgage-related assets.
At year’s end, the MBA’s current president and CEO Jonathan Kempner will step down, replaced by Courson, who previously served as the association's chairman in 2003.
"Few members of the mortgage industry are more respected than John, as he brings to MBA a wealth of experience, both in terms of business knowledge, and political and advocacy skills," said Kempner of Courson when the MBA's announced the transition in July.
Central Pacific Mortgage, Courson's Folsom, California-based net branch operation, collapsed with the onset of the subprime crisis early last year.
Plans to sell off the company’s wholesale operations to TMSF Holdings, Inc. fell through after TMSF backed out of the deal with the struggling lender.
Even if the deal had gone through, Central Pacific would have been left with the repurchase risk on loans that had been originated by its wholesale division.
A few days prior to TMSF’s decision to withdraw its bid, the net branch operation had notified its employees that it no longer had adequate capital and was shutting down, leaving many of them without a final paycheck.
In court documents, Courson says the company’s business files and financial records – with the exception of records on taxes, payroll and loan files – were either dumped or destroyed by a small group which included himself, his wife, a few friends and some “faithful” employees.
Last year, the company was ordered pay a total of $111,953 towards unpaid wages, overtime, vacation pay and other penalties related to 16 former employees of Central Pacific.
Eleven of Central Pacific's former branch managers – eight in California, two in Maryland and one in Florida – have filed a separate civil lawsuit against Courson.
The lawsuit, which was first publicly reported by the Sacramento Bee, charges Courson, along with former executive vice president John Cassell and former chief financial officer Ed Fuchs , with violating the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO).
According to the lawsuit, the MBA executive schemed to defraud the branch managers while using interstate phones, faxes, internet and mail.
Courson has filed statements denying any wrongdoing in several civil court cases filed against him.
When asked about whether the MBA was aware of the allegations against Courson when it hired him, chairman Kieran Quinn issued a written statement saying the defendant was “very forthcoming about all the details surrounding the closing of Central Pacific Mortgage."
"John is an experienced, unwavering and respected leader who will guide MBA and the industry through these challenging times," Quinn added.
In 2007, Lehman Brothers charged Courson and his company with a $1.6 million civil fraud for allegedly misappropriating $1.6 million in mortgage funds.
The money had been repaid by three homeowners to Central Pacific, but the was never turned over to the bank where it belonged.
One Lehman executive said in court documents that Courson said the “funds were not available” when asked about the $1.6 million in question.
Furthermore, the bank charged Central Pacific with reneging on an agreement to repurchase $11.5 million in mortgage loans.
Ultimately, a $1.6 million judgment was entered against Central Pacific as part of an October 2007 out-of-court settlement, and Lehman dropped the case against Courson.
Another judgment forced Central Pacific to pay $295,170 to A&A properties for unpaid rent on the company’s 46,000-square-foot office in Folsom.
A former president of both the California and Michigan Mortgage Banker associations with more than 40 years of mortgage experience, Courson was appointed by California Gov. Arnold Schwarzenegger in 2004 to chair the board of directors of the California Housing Finance Agency.
Central Pacific donated $21,100 to the Schwarzenegger's campaign in 2003, and an additional $10,000 in 2006.
Courson is set to become the president of the MBA on January 1, 2009.
The link to the article. Phew! I can verify the source.
http://www.mortgageledger.com/intro_10-02-08.htm
John Courson, slated to become the president of the Mortgage Bankers Association of America at year’s end, stands accused in a civil lawsuit of defrauding 11 former branch managers and embezzling $879,000 as his California-based brokerage collapsed in 2007. In a separate lawsuit filed last year, Courson was accused of misappropriating $1.6 million by now-defunct Lehman Brothers Bank.
The 66-year-old mortgage banker is currently the chief operating officer of the MBA, an industry group representing roughly 2,400 companies and 370,000 professionals throughout the mortgage sector.
The MBA maintains a vast lobbying operation, spending roughly $3.0 million on related expenditures in 2007 and $2.2 million in the first half of 2008.
Courson has been a powerful figure on Capitol Hill, playing a key role in several major housing initiatives this year.
Last week, Courson sent letters to House and Senate members urging them to pass legislation to allow the Treasury to buy up billions in troubled mortgage-related assets.
At year’s end, the MBA’s current president and CEO Jonathan Kempner will step down, replaced by Courson, who previously served as the association's chairman in 2003.
"Few members of the mortgage industry are more respected than John, as he brings to MBA a wealth of experience, both in terms of business knowledge, and political and advocacy skills," said Kempner of Courson when the MBA's announced the transition in July.
Central Pacific Mortgage, Courson's Folsom, California-based net branch operation, collapsed with the onset of the subprime crisis early last year.
Plans to sell off the company’s wholesale operations to TMSF Holdings, Inc. fell through after TMSF backed out of the deal with the struggling lender.
Even if the deal had gone through, Central Pacific would have been left with the repurchase risk on loans that had been originated by its wholesale division.
A few days prior to TMSF’s decision to withdraw its bid, the net branch operation had notified its employees that it no longer had adequate capital and was shutting down, leaving many of them without a final paycheck.
In court documents, Courson says the company’s business files and financial records – with the exception of records on taxes, payroll and loan files – were either dumped or destroyed by a small group which included himself, his wife, a few friends and some “faithful” employees.
Last year, the company was ordered pay a total of $111,953 towards unpaid wages, overtime, vacation pay and other penalties related to 16 former employees of Central Pacific.
Eleven of Central Pacific's former branch managers – eight in California, two in Maryland and one in Florida – have filed a separate civil lawsuit against Courson.
The lawsuit, which was first publicly reported by the Sacramento Bee, charges Courson, along with former executive vice president John Cassell and former chief financial officer Ed Fuchs , with violating the civil provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO).
According to the lawsuit, the MBA executive schemed to defraud the branch managers while using interstate phones, faxes, internet and mail.
Courson has filed statements denying any wrongdoing in several civil court cases filed against him.
When asked about whether the MBA was aware of the allegations against Courson when it hired him, chairman Kieran Quinn issued a written statement saying the defendant was “very forthcoming about all the details surrounding the closing of Central Pacific Mortgage."
"John is an experienced, unwavering and respected leader who will guide MBA and the industry through these challenging times," Quinn added.
In 2007, Lehman Brothers charged Courson and his company with a $1.6 million civil fraud for allegedly misappropriating $1.6 million in mortgage funds.
The money had been repaid by three homeowners to Central Pacific, but the was never turned over to the bank where it belonged.
One Lehman executive said in court documents that Courson said the “funds were not available” when asked about the $1.6 million in question.
Furthermore, the bank charged Central Pacific with reneging on an agreement to repurchase $11.5 million in mortgage loans.
Ultimately, a $1.6 million judgment was entered against Central Pacific as part of an October 2007 out-of-court settlement, and Lehman dropped the case against Courson.
Another judgment forced Central Pacific to pay $295,170 to A&A properties for unpaid rent on the company’s 46,000-square-foot office in Folsom.
A former president of both the California and Michigan Mortgage Banker associations with more than 40 years of mortgage experience, Courson was appointed by California Gov. Arnold Schwarzenegger in 2004 to chair the board of directors of the California Housing Finance Agency.
Central Pacific donated $21,100 to the Schwarzenegger's campaign in 2003, and an additional $10,000 in 2006.
Courson is set to become the president of the MBA on January 1, 2009.
The link to the article. Phew! I can verify the source.
http://www.mortgageledger.com/intro_10-02-08.htm
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