Defunct Lend America and a top executive, Michael Ashley, have been essentially barred from the mortgage industry, according to court documents in a civil suit filed by officials investigating fraud at the Melville-based firm.
Ashley, 44, of Melville, the firm's executive vice president and public face, did not admit liability, according to the agreement filed Wednesday in federal court in Central Islip.
In return, anything tied to federal-related loans is off limits -- from appraising properties and marketing mortgages to working as a consultant or housing counselor.
"I'm beyond thrilled to be done with the mortgage business," Ashley said Monday. "I've had it with the mortgage business. I'm done with everybody chasing me around."
A default judgment was filed Friday against Lend America because no one from the firm had responded to federal prosecutors since the lender's outside attorney bowed out of the case in December, court papers show.
"This company, whatever may be left of it . . . will be permanently enjoined from engaging in the business," said a federal official close to the case who declined to be identified.
Ashley's attorney reiterated that there was no admission of wrongdoing.
"There was no utility in fighting the case because the company no longer existed," said Kevin Keating.
The 155-page civil fraud suit, filed in October by the U.S. attorney's office for the Eastern District, accused the lender of lying on loans so they could be covered by federal insurance; routinely and knowingly approving refinances without funding them, and hiding fraud.
The October civil suit is essentially over, but federal officials said nothing bars federal authorities from launching other civil, criminal and restitution cases against Ashley and others at the firm.
"What we don't want to suggest here is this is the last chapter when it concerns wrongdoers," the federal official said.
The firm shut down Dec. 1, a day after federal authorities yanked its license to make loans insured by the Federal Housing Administration.
In the weeks prior, Lend America continued making loans, including offering incentives to make loan quotas, despite massive problems brewing with federal authorities and its capital funding source drying up, former employees and officials said.
In the current tight credit world, where the government is practically the sole backer of mortgages, this means Ashley is essentially shut out of the industry, but technically, he could play a lending role if there were no federal program involved.
Ashley, a former race-car driver, pleaded guilty in 1993 to conspiracy to commit wire fraud in connection with numerous cases of mortgage fraud while employed by Liberty Mortgage Banking Ltd. in Melville, which was run by his father, Kenneth, who went to prison for the same scheme.
"Our principal concern was that this was a company and an individual, who, unless they were stopped, were going to jeopardize lives and the public" financial interest, the federal official said.