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Rochester, N.Y. — (April 2, 2009) Charles Livecchi, and C.R.L. Management, Inc.
real estate management company, were Ordered on March 31, 2009, to pay the
United States $962,876 plus prejudgment interest by U.S. Magistrate Judge
Marian W. Payson, Acting U.S. Attorney Kathleen M. Mehltretter of the
Western District of New York announced today. The decision follows a trial
in which the United States argued that defendants violated a HUD mortgage
agreement.
Assistant U.S. Attorney Robert G. Trusiak, who handled the case, stated
that defendants owned and managed a multifamily dwelling known as
Cambridge Court Apartments that was financed through a HUD-insured
mortgage. The property was located on Dodge St., Rochester, NY. In return
for HUD’s agreement to insure the mortgage, Mr. Livecchi signed a Regulatory
Agreement with HUD. Mr. Livecchi breached the terms of the Regulatory
Agreement resulting in foreclosure of the property. The United States sued
defendants for the breach of the Regulatory Agreement and sought double
damages plus prejudgment interest. The Court determined that Mr. Livecchi
engaged in substantial and repeated fault concerning the numerous violations
of the Regulatory Agreement by the defendants. The Regulatory Agreement
violations included the substantial and repeated failure to make mortgage
payments during the period of default in the amount of $481,438; the failure to
make monthly deposits into an escrow account required by HUD necessary to
maintain the property and the failure to provide certain financial statements
necessary for HUD to determine cash flow and risk to the taxpayer.
Assistant United States Attorney Robert G. Trusiak stated the decision
demonstrates the importance of following government rules for government
insured loans that implicate federal taxpayer dollars. Mr. Trusiak also stated
the Court decision demonstrates the reasonableness of HUD in seeking to
resolve the matter prior to the foreclosure in an attempt to preserve taxpayer
dollars.
The Court finding of liability and damages was the culmination of an
investigation by HUD Office of Inspector General, under the direction of Rene
Febles, Special Agent in Charge. Mr. Febles stated that the programs that HUD
administered are so important to the communities across the United States.
Whenever someone does not follow government rules, it is up to our office, as
gate keepers for the Agency, to ensure that it is uncovered and brought to the
attention of the United States Attorney’s Office.
SOURCE: United State Department of Justice -- Western District of New York
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