Lawsuit alleges bill edwards drained mortgage company gas problem in babies

The plaintiffs — the U.S. Department of Justice and two mortgage brokers — stated in a court filing last week that Edwards made the financial moves to help shield the money in the event that he and his company lose the lawsuit, allegations Edwards’ attorney described as baseless.

If MIC loses, it could be forced to pay an estimated $173 million. If neither the company nor Edwards could pay that amount, he could possibly have to sell assets including two downtown staples, the Sundial shopping plaza and the Tampa Bay Rowdies of the North American Soccer League.

"As with any large business, Mortgage Investors Corporation has been involved in civil lawsuits over the years. This is one of them," Edwards said. "I cannot comment on ongoing litigation other than to say that I am confident we will ultimately prevail, and that this suit will not impact my other business endeavors."

"None of this matters until the (plaintiffs) win the case, and we don’t think they are going to win their case," Esposito added. "We wholeheartedly believe there is no merit to those claims whatsoever. I believe the $173 million is extremely exaggerated."

In 2013, for example, MIC made a large payment to shareholders that was more than it listed as total assets in 2012, according to the amended complaint filed Aug. 18 in Atlanta. Edwards, the largest shareholder, received 78 percent of that payout. His ex-wife Linda Edwards, whom he divorced in 1998, is the company’s second largest shareholder with 9 percent of the stock.

The 2006 whistleblower lawsuit was brought by the Georgia mortgage brokers, Victor Bibby and Brian Donnelly, and the DOJ against MIC and seven other banks. The brokers are "whistle blowers" and will receive a percentage of any money paid in recovered funds or a settlement.

The lawsuit alleges the companies making VA loans, backed by the U.S. government’s Veterans Affairs, charged veterans illegal fees and then doctored paperwork submitted to the VA to hide the overcharges. Whenever a veteran homeowner defaulted on a loan, the government backed it, so lenders such as MIC didn’t lose any money. The suit states if the lenders weren’t following the guidelines required for issuing or refinancing VA loans, then the government shouldn’t have had to pay them back when loans went into default.

When whistleblower suits are initially filed, the DOJ investigates the allegations and then decides if it will intervene in the case and take the lead role in trying to recover the money. The DOJ chose not to intervene in the MIC suit and the other VA lenders, leaving the lead role to the plaintiffs’ attorneys.

In October 2013, Edwards laid off 476 people at MIC, including 256 at the company’s headquarters at 6090 Central Ave. He blamed the near-shutdown on federal regulations under the Dodd-Frank Act, saying his company didn’t have the technological capacity to comply with the myriad of new regulations.

MIC is the where Edwards earned the bulk of his wealth, but he has spent it throughout St. Petersburg in public and private ventures. Late last year, he opened the Sundial shopping plaza after an investment he pegged at more than $40 million. He bought the Rowdies in 2013 for an undisclosed amount.