BRENTWOOD — A former mortgage company executive has made scathing allegations of unethical business practices against her former employer — and claims she was fired for not going along with them.
Jean Duerr, former vice president of operations for The Mortgage Specialists in Plaistow, alleges employees regularly "cleaned up" documents in advance of showing them to state auditors.
In August 2008, the New Hampshire Banking Department levied $450,000 in fines against the company for fraud and unethical practices. Duerr was fired three months later.
Duerr's allegations are outlined in a civil lawsuit filed in Rockingham County Superior Court earlier this month. She claims she was fired after 10 years with the company for refusing to hide things from state and federal investigators.
Duerr alleges the "cleanups" were regularly coordinated by Lisa Tracy, the company's compliance officer — and company President Michael Gill encouraged the practice.
In her lawsuit, Duerr claims she tried to discourage the practice, although she was one of four people named in the Banking Department's order.
"She tried to do the right thing in this case," said Andrew Livernois, Duerr's attorney, "and when she tried to do the right thing, she was terminated."
The state Banking Department usually gave the mortgage company advance notice of audits, but there was a surprise audit in 2008. When the company learned of the audit, Tracy assembled a "special team" of employees to make sure documents were cleaned up, according to Duerr's lawsuit.
Tracy allegedly arranged to have a copy machine, correction fluid and scissors ready at an off-site storage facility where files were kept. Auditors requested 20 documents and it took more than four hours for employees to retrieve them, according to the Banking Department.
Duerr offers an explanation in her lawsuit. The team of employees at the storage site reviewed the files, added missing documents, and forged signatures by cutting them from other documents, pasted them to the requested forms and made photocopies, Duerr claims.
During the audit, Banking Department representatives found that documents were missing. They then discovered the missing paperwork in a bin, ready for shredding. As a result, the audit was extended and the department uncovered the altered documents, according to Banking Department records. Two broker fee agreements and an application for a federal mortgage loan were among the altered documents.
During the extended audit, Duerr claims Gill said someone other than management would have to take the fall and put her on administrative leave. She claims she asked Gill to come clean, but he brushed her off.
"She urged Mr. Gill to simply tell the truth to the regulators," the lawsuit states. "Gill laughed about Ms. Duerr's concerns about her reputation."
Duerr claims Gill promised she would get her job back.
Shortly after the fines were levied, Duerr was contacted by the FBI about a criminal investigation into Gill, according to her lawsuit. She said she told Gill about the call and he instructed her to call a criminal attorney. He recommended a lawyer, but Duerr chose her own.
After that, Duerr claims, Gill stopped talking to her and, in November, fired her.
Alex Walker, attorney for The Mortgage Specialists, said the company denies Duerr's allegations.
"We're in the process of reviewing the allegations, but based on what we've seen so far, they are without merit," Walker said yesterday. "The company plans to vigorously defend itself against the allegations."
Gill, a top thoroughbred owner, is under investigation by the Pennsylvania Horse Racing Commission for possible mistreatment of his horses.
