Monday, September 20, 2021
HomeBlogFraudulent Misrepresentation: Vendor Rep Or The Order Mill Guilty?

Fraudulent Misrepresentation: Vendor Rep Or The Order Mill Guilty?

A civil conspiracy or collusion is an agreement between two or more parties to deprive a third party of legal rights or deceive a third party to obtain an illegal objective. A conspiracy may also refer to a group of people who make an agreement to form a partnership in which each member becomes the agent or partner of every other member and engage in planning or agreeing to commit some act. It is not necessary that the conspirators be involved in all stages of planning or be aware of all details. Any voluntary agreement and some overt act by one conspirator in furthance of the plan are the main elements necessary to prove a conspiracy. A conspiracy may exist whether legal means are used to accomplish illegal results, or illegal means used to accomplish something legal. “Even when no crime is involved, a civil action for conspiracy may be brought by the persons who were damaged.”

The elements of common law fraud are: (1) a false statement of material fact, (2) knowledge that the statement was false, (3) intent to induce the defendant to act, (4) reliance on the statement by the plaintiff; and (5) damages. Fraudulent concealment has the same elements with the additional requirement that the plaintiff show the defendant omitted or concealed a material fact when it had a duty to disclose it. While a conspiracy claim will normally not lie against a corporation acting through one of its officers based on agency rules (because the corporation can only act through its agents), that rule doesn’t apply in cases where the corporate officer actively participates in the tortious conduct.

Civil conspiracy law often takes the form of antitrust lawsuits, usually litigated in federal court, where the plaintiff seeks treble damages for overpayments caused by price-fixing above the market rate. The federal Sherman Antitrust Act provides both civil and criminal penalties. Other agreements among businesses and their agents for group boycotts, to monopolize, and to set predatory prices with intent to drive a small competitor out of business, would be actionable.

Now, let’s get to the heart of the matter. Order Mill A is based out of State B. It has both employees in State B and Remote Independant Contractors in State C performing a plethora of administrative duties. For the purposes of this discussion and bearing in mind I am not a lawyer nor giving legal advice, we will presume that the two key sets of duties are: Processing and Recruiting. Order Mill A has a Contract with a Financial Institution, vis-a-vis a Portfolio Holder albeit no Doctrine of Privity exists. In layman’s terms, this means that a Regional Order Mill has a Contract with a National Order Mill whom is acting on behalf of a Bank.

Initially, when a Member of Labor is Recruited, the Recruiter has active knowledge of the Company they work for whether that be that the Company is financially solvent — this would be generally gathered by the fact that Members of Labor are paid in a timely fashion — or that the Company is financially challenged or insolvent — this would be generally gathered by the fact that there are Complaints either via email; on Craigslist; on Facebook; on LinkedIn; or on Foreclosurepedia. The Recruiter actively uses on or all of these social media platforms in addition to others.

Recruiters, Vendor Mangers and Processors are all intimately involved with each other and generally in communication with either the Owners of said Order Mills or, in the alternative, have access to C Level Personnel at the Company. The rationale being that when a Recruiter onboards a Member of Labor, the Vendor Manager generally knows what Area of Operations to instruct the Recruiter to target based upon the metrics — the needs analysis — which are gleaned from the Processors and, occasionally, at the whim of an Owner or C Level personnel whom determine a new Area of Operation conducive for expansion.

When anyone transmits documents in the Mortgage Field Services Industry, it is done electronically. 9 times out of 10, this transmission is across state lines. So, if a Recruiter is actively engaging Members of Labor, all the while knowing that the Company s/he works for is tanking, they are freely, willingly and with overt intention placing themselves as an agent of an active conspiracy — civil or criminal generally depends upon the Grand Jury for the day.

How Processing, remote or on location, works is this: A Member of Labor goes out to perform a service. They then transmit the results, including bids, back to the Company. For example, MCS just happens to pay $40 per cubic yard for debris removal. Generally, the Processor will take those bids the Member of Labor submits, and run them through Blue Book, Repair Base or another similarly situated bidding software. If the Member of Labor bids lower, then the Processor will AUTOMATICALLY PAD THE BID TO THE MAXIMUM ALLOWABLE. This is critical to understand. The reason being is this: Remember Order Mill A? Yeah, so the Processor takes say the Window Reglaze bid submitted and cooks up the new numbers. These numbers are then trucked up the pike to the National Order Mill whom, in turn, uses the Financial Institution as a conduit to the US Government. The US Government, in turn, believes that the bid price they received is actually that which the Member of Labor has agreed to perform the service for.

In my opinion, this is a False Claims Act violation. The Processor knows what the Member of Labor is bidding and then lies and states that Order Mill A’s bid becomes X — the padded equivalent. The National may or may not add to that price or perhaps negotiate with Order Mill A. The Financial Institution; they are the ones whom are ultimately being compensated by the US Government, then unwittingly becomes a conduit for fraud. Why? Well, when the US Government pays the bill, they are lied to with respect to the actual costs of the product.

Now, I am not the only one whom states this with respect to the aforementioned. In fact, there is a Sealed Qui Tam pending against a major financial institution as well as one of the oldest Mortgage Field Services Industry and National Association of Mortgage Field Services (NAMFS) Members with a beginning number coming in at around One Hundred Million Dollars. The reality is that this is a drop in the bucket if the US Attorney Generals will get off their collective asses and do what the US Taxpayers pay them to do.

There are some rare circumstances wherein the Letter of the Law might not be shouldered as heavily by the Recruiters, Vendor Managers and Processors. For example: If any of the aforementioned were on their first week of working, they probably would not be held completely liable if they had no former experience in the Industry. In every case I examined, though, each of the job titles I mentioned had at least one tour of duty under their belt. In 67% of the cases, these people came from Firms which collapsed. In 11% of the cases, those whom I investigated came from two or more Firms which collapsed.

Both the W2 and W9 Recruiters, Vendor Managers and Processors have become desensitized to the fact that lives are being destroyed. It appears, to me at least, that they continue to do what they do based upon a misguided belief that they are innocent and only following orders. Many will remember this as the Nuremberg Defense — Befehl ist Befehl as the Nazis said in defense to murdering millions across Europe during WWII. The simple fact of the matter is that the Recruiters, Vendor Mangers and Processors are actually OBLIGATED to report criminal activities in the financial sector. See, there’s that pesky Dodd – Frank thing. While NAMFS loves to trot out Dodd – Frank to justify its bullshit about Background Checks — the reality is that while anyone can require a background check, Dodd – Frank only requires them in the mortgage servicing sector and then the financial institutions are on the hook for them — they are loathe to allow ANYONE TO INTERFERE with the fraudulent actions perpetrated by NAMFS Members at the highest levels including the former and now disgraced NAMFS Secretary Heather Berghorst or Joe Hummel.

What I continue to hear is the fact that Non Disclosure Agreements bind everyone to silence. This is bullshit. The reality is that with respect to the SEC, Confidentiality Agreements are being kicked to the curb. In fact, they would appear to violate Dodd – Frank with specificity to Rule 21F – 17. More on point, though, you become a co-conspirator when you participate in a crime. The only question that remains is whether or not you are going to become a confidential informant to reduce your sentence.

As we move closer to the Presidential Election Cycle, there is one thing you can take to the bank — no pun intended — and that is the simple fact that each Party is going to attempt to demonstrate how they can strech copper out of a penny. What I mean is this: Scapegoats are King in an Election Cycle. For those out on the stump, a novel concept which sways the Blue Collar Voter is Gold. The question that Management needs to ask itself is this: Can we withstand sustained scrutiny based upon an individual’s continued insane public war with no end in sight?

COVID Interview With Industry Veteran

Paul Williams
Linux addict buried deep in the mountains of East Tennessee.
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