FBI Probe of Mortgage Lender Ditech Widens
The FBI moved to seize records from a second company that does business with Ditech.com, widening the criminal investigation into an alleged extortion scheme involving former top managers of the Costa Mesa mortgage lender.
Records were subpoenaed this week from Ditech vendor Southland Title Inc., Harold Grossman, Southland’s corporate counsel, said Friday. The Burbank real estate services company also has launched an internal investigation into possible wrongdoing, he said.
Neither the FBI nor the U.S. attorney’s office in Pittsburgh, which is prosecuting the case, would comment on the subpoena, which was served earlier this week.
Grossman declined to say what types of records had been demanded from Southland or whether the company had identified any improprieties, such as nonexistent employees on its payroll.
Fast-growing Ditech, which was founded five years ago and grew to fund $4.3 billion in loans last year, has garnered a national reputation for aggressively marketing higher-risk home equity loans.
A federal grand jury in Pittsburgh indicted three Ditech managers May 2 on two counts each of extortion and illegal kickbacks.
The indictment accuses them of threatening to stop using ATM Corp. of America unless the Pittsburgh real estate services company agreed to pay them and to put the father-in-law of a Ditech executive on its payroll as a “ghost employee.” ATM allegedly paid the men $11,451 before federal agents stepped in.
Ditech founder and Chief Executive J. Paul Reddam, a flamboyant figure who doubled as the firm’s TV pitchman, resigned the same day the investigation became public. Reddam has not been charged in the case.
The indictment names operations manager Jay David Marx, 36; Vincent Pozzuoli, 36, vice president of loan originations; and Gregory Kenneth DeLong, 41, who supervised the company’s escrow services.
Attorneys for the men said they had not heard about the Southland subpoena and were unaware of any possible expansion of the case.
The Ditech trio is scheduled to be arraigned May 31 in Pittsburgh via a video conference.
Marx, of San Juan Capistrano, and DeLong and Pozzuoli, both of Newport Beach, are on paid administrative leave until the case is resolved, said Rick Gillespie, a spokesman for GMAC Residential Holdings, which owns Ditech.
GMAC has dispatched executives from its Pennsylvania headquarters to help run Ditech in the interim.
Ditech has not yet named a replacement for Reddam. A former philosophy teacher with a passion for horse racing, the 44-year-old Reddam built the company with a scrappy, attention-grabbing style.
Last year, he sold the company to GMAC, a unit of General Motors Corp., in a deal valued at up to $265 million, according to estimates.
