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Ex-employees win $9M award against Topdot Mortgage

Aaron Daniels, the chief plaintiff suing for minimum

Aaron Daniels, the chief plaintiff suing for minimum wage and overtime, said he went through "hard times" working on commission. A judge ruled in his favor and for 165 other Topdot workers. (Sept. 26, 2011) Credit: Howard Schnapp

Former loan officers who sued to get minimum wage and overtime have a won a $9-million judgment against the now-defunct Topdot Mortgage in Jericho.

U.S. District Court Judge Leonard Wexler in Central Islip levied damages by doubling the $4.5 million in unpaid wages and overtime due 166 ex-workers. A jury this month had concluded that the lender paid only commission, violating federal and state labor laws.

It also found chief executive David Brown and operations head Frank Fiore liable.

"I definitely went through some hard times, because for some months you're working and you don't get paid," said Aaron Daniels, the suit's chief plaintiff, who quit in 2008 after months of working at least 50 hours a week.

"That's the way the industry worked. No one knew anything aside from that. You only know what they tell you when you come in for an interview. If they say you're hired on commission, that's what you do."

The suit was filed in November 2008.

Federal authorities last year stripped Topdot of its license to make loans insured by the Federal Housing Administration. Topdot, which operated nationwide and was also known as Premium Capital Funding, was accused of ignoring borrowers' creditworthiness in pushing through loans. When it lost its license in January 2010, it had a 12.5 percent default rate on recently made loans, higher than the 5 percent national average.

Erik Langeland, the attorney for the former loan officers, said Topdot required its workers to work weekends and long hours, especially the "power hours" before people left home for work and after they got back.

But the company failed to keep records of hours worked, he said, and during the trial Brown said no time clock was used so employees wouldn't feel like "factory workers."

"Instead of doing a time clock because they didn't want to make them feel like factory workers, they deprived them of the dignity of a regular paycheck," Langeland said.

After the suit was filed in 2008, the company installed computer programs that shut off each worker's computer after 40 hours, the attorney said. But managers would give loan officers passwords to log in under other names, he said.

Topdot's attorney, Michael Barone of Syosset, declined to comment.

Brown, who represented himself, did not return calls. He and his family, including his brother and father, ran the company, and they all now work at The Grublife Group, a Syosset-based marketer specializing in social media.

Fiore also represented himself and could not be reached.

The court award could pay an average of $54,000 per loan officer, but one question is how much can be delivered.

Langeland plans to hire an asset recovery company to see what Brown and Fiore own and what can be liquidated.


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