Beazer fraud probe heats up

Beazer Homes USA Inc. has received a grand jury subpoena for documents as part of a federal investigation of possible fraud in the company’s mortgage lending and other financial transactions, the home builder said Thursday in a regulatory filing.

The disclosure by the Atlanta-based company reinforces a statement that Beazer issued Wednesday saying it had been in contact with the U.S. attorney’s office and was cooperating with a request for unspecified documents.

Beazer said the subpoena was issued by the U.S. attorney’s office in western North Carolina and was based on an application by the Department of Housing and Urban Development’s inspector general’s office. The subpoena focuses on the company’s mortgage origination services, Beazer said in a filing with the Securities and Exchange Commission.

The company, which is cooperating with the investigation, said it had not received a request for information or documents from the FBI or Internal Revenue Service in this regard.

An FBI spokesman in Charlotte, N.C., where the probe is centered, has said the inquiry began last week and involves “fraud in general” and more specifically is related to corporate, mortgage and investment issues.

Beazer Homes has recently suffered losses amid a downturn in the housing market.

Weak demand for new homes, sales at steep discounts and the need for inventory write-downs have taken a toll on the company’s results.

Beazer lost $59 million, or $1.54 a share, in its first quarter ended Dec. 31 compared with a profit of $89.9 million, or $2 a share, a year ago. Revenue tumbled to $806.4 million from $1.1 billion.

Beazer shares rose 51 cents Thursday to $29.28.