Ocwen Class Action Says Lender Filed Fraudulent Forms with IRS

Ocwen Loan Servicing LLC d/b/a Ocwen has filed fraudulent 1099 forms with the Internal Revenue Service, according to a class action lawsuit filed last week in Georgia federal court.

Plaintiff Myrtle Carr states that she was never indebted to Ocwen for her Georgia property. According to the Ocwen class action lawsuit, the property was foreclosed in April 2011 by U.S. Bank NA.

The deed reportedly indicates that the property was purchased for a sum of $93,750 by U.S. Bank as the secured creditor.

Carr says she moved out of the property in June 2011. According to the Ocwen class action, U.S. Bank was the only entity that had the authority to file a 1099 with the IRS related to the foreclosure of the property.

However, Carr says that Ocwen filed the 1099 with the IRS in April 2014 claiming it had lent her money, and that it was the secured creditor with a deed covering the property.

The Ocwen class action lawsuit asserts that only the secured creditor—U.S. Bank—had the authority to file a 1099 with the IRS. Carr says that Ocwen wrongly claimed that it was the secured creditor for her foreclosed property in order to file a fraudulent 1099 with the IRS.

“In the last six years, Defendant has filed more than ten thousand (10,000) false 1099-A Acquisition or Abandonment of Secured Property Information Returns (hereinafter 1099’s) with the IRS that relate to the Plaintiff and all others similarly situated foreclosures and/or alleged abandonment of secured property,” the Ocwen class action lawsuit alleges.

By filing the fraudulent 1099’s, Ocwen can allegedly claim a business loss on its federal income tax return due to the foreclosure or abandonment.

This action caused Carr and other similarly situated Class Members to suffer an increased tax burden, according to the Ocwen class action lawsuit.

“All the 1099’s issued to the Plaintiff and all others similarly situated and then willfully filed with IRS are fraudulent because the Defendant never lent any money whatsoever to class members, thus suffered no financial loss and was not a secured creditor under any state property laws,” Carr alleges in the Ocwen class action lawsuit.

Carr’s fraudulent IRS forms class action lawsuit accuses Ocwen of knowingly filing false and fraudulent 1099 forms with the IRS in violation of 26 U.S.C. § 7434.

Carr seeks to represent a Class of all persons for whom Ocwen filed a 1099-A Acquisition or Abandonment of Secured Property with the IRS since Oct. 28, 2010, when Ocwen was not a secured creditor.

According to the Ocwen class action lawsuit, each violation is subject to a statutory penalty of $5,000.

In addition to statutory damages, Carr also seeks an order directing Ocwen to file corrected 1099 Returns with the IRS for Carr and the other affected Class Members.

Carr is represented by Harlan S. Miller of Miller Legal PC.

The Ocwen Fraudulent IRS Forms Class Action Lawsuit is Myrtle Carr v. Ocwen Loan Servicing LLC d/b/a Ocwen, Case No. 1:16-cv-04036, in the U.S. District Court for the Northern District of Georgia, Atlanta Division.