UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK
January 20, 2011
UNITED STATES OF AMERICA PLAINTIFF,
ROBERT R. GOODS, DEFENDANT.
This Settlement Agreement ("Agreement") is entered into between the United States of America ("United States"), acting through the United States Department of Justice, and Robert R. Goods ("Goods"), (collectively "the Parties").
As a preamble to this Agreement, the Parties agree as follows:
1. Goods is a settlement attorney who handled real estate refinance closings on behalf of financial institutions including SunTrust Mortgage, Inc. ("SunTrust"). In each transaction, refinance loan funds were deposited in Goods' escrow account.
2. Goods began retaining proceeds from real estate settlement transactions in violation of 18 U.S.C. § 1344. Goods used funds from incoming transactions to make up the difference between the settlement funds issued by banks and the amount he retained for personal benefit.
3. Goods has an escrow account, operating account and personal bank account at First Niagara Bank. Bank records reveal internet withdrawals from Goods' escrow account which were deposited into his personal and operating accounts.
4. Despite receiving settlement funds from SunTrust Mortgage, Goods was unable to payoff two prior liens in recent refinances transacted by SunTrust. This failure caused loss to the financial institution and jeopardized its lien position on those properties.
III. SUBJECT TRANSACTIONS WITH LOSS
5. On or about February 22, 2010, borrower Craig K. MacLean obtained a refinance mortgage with Sun Trust Mortgage in the amount of $417,000. A review completed by SunTrust Mortgage revealed that Settlement Attorney, Robert R. Goods retained funds, failed to satisfy the required payoff to Sovereign Bank on the existing lien on the subject property and compromised SunTrust Mortgage's lien position on this property.
6. On or about March 25, 2010, borrower Paula Williams obtained a refinance mortgage with SunTrust Mortgage in the amount of $128,000. A review completed by SunTrust Mortgage revealed that Settlement Attorney Robert R. Goods retained funds, failed to satisfy the required payoff to US Bank on the existing lien on the subject property and compromised SunTrust Mortgage's lien position on this property.
7. Goods repeatedly retained funds sent to his escrow account by SunTrust to settle real estate refinance transactions. Goods retained funds for his personal benefit, failed to timely and appropriately pay off previous liens and failed to file security interests on properties related to SunTrust transactions. This conduct caused SunTrust actual loss and jeopardized its lien position in the subject transactions.
8. Pursuant to 12 U.S.C. § 1833a, Goods is liable for civil fraud penalties in an amount up to $1,000,000 as a result of having knowingly retained settlement funds from a financial institution for personal benefit, failing to satisfy liens on behalf of the financial institution and failing to record lien positions causing SunTrust, a financial institution, actual loss.
9. In order to avoid the delay, uncertainty, inconvenience and expense of protracted litigation of these claims, the Parties reach a full and final settlement pursuant to the terms and conditions set forth below.
IV. TERMS AND CONDITIONS
THEREFORE, in consideration of the mutual promises, covenants, and obligations set forth below, and for good and valuable consideration as stated herein, the Parties agree as follows:
10. Goods agrees to pay to the United States $600,000.00 (the "Settlement Amount"). Goods will execute a Consent to Entry of Judgment in the form attached hereto as Exhibit A.
11. Subject to the exceptions in Paragraph 3 below, in consideration of the obligations of Goods set forth in this Agreement, and conditioned upon Goods' performance in full of his obligations hereunder, namely the payment of $600,000 as set forth in paragraph 1, the United States (on behalf of itself, its officers, agents, agencies and departments) agrees to release Goods from any civil or administrative monetary claim the United States has or may have under the 12 U.S.C. § 1833a for the Covered Conduct.
12. Notwithstanding any term of this Agreement, specifically reserved and excluded from the scope and terms of this Agreement, including its releases, are the following:
A. Any civil, criminal or administrative claims arising under Title 26, U.S. Code (Internal Revenue Code);
B. Any criminal liability; 4
C. Any administrative claims or liability except administrative claims or liability based on the Covered Conduct;
D. Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct; and,
E. Any claims based upon such obligations as are created by this Agreement.
13. Goods fully and finally releases the United States, its agencies, employees, servants, and agents from any claims (including attorneys' fees, costs, and expenses of every kind and however denominated) which Goods has asserted, could have asserted, or may assert in the future against the United States, its agencies, employees, servants, or agents, related to the Covered Conduct or the United States' investigation or prosecution thereof.
14. Nothing in this Agreement constitutes an agreement by the United States concerning the characterization of the Settlement Amount for purposes of any proceeding under Title 26 of the Internal Revenue Code.
15. This Agreement is intended to be for the benefit of the Parties only, and by this instrument the Parties do not release any claim against any other person or entity.
16. The United States and Goods will bear their own legal and other costs incurred in connection with this matter, including the preparation and performance of this Agreement.
17. Goods represents that this Agreement is freely and voluntarily entered into without any degree of duress or compulsion whatever, and that he has been advised with respect to this Agreement by counsel.
18. This Agreement is governed by the laws of the United States. The Parties agree that the exclusive jurisdiction and venue for any dispute arising between or among the Parties under this Agreement will be the United States District Court for the Western District of New York.
19. This Agreement constitutes the complete agreement between the Parties with respect to the subject matter hereof. This Agreement may not be amended except by written consent of the Parties.
20. The individual signing on behalf of the United States represents that she is signing this Agreement in her official capacity and that she is authorized to execute this Agreement.
21. This Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same agreement.
22. This Agreement is effective on the date of signature of the last signatory to this Agreement ("Effective Date").
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