Bhatia

Filing 124

ORDER: For the reasons stated in the attached memorandum and order, Defendants' motions to dismiss 113 , 114 , and 119 are granted, and this action is hereby dismissed in its entirety. The Clerk of Court is respectfully directed to enter judgment and close this case. Ordered by Judge Orelia E. Merchant on 3/12/2025. (EDH)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------------------X
UNITED STATES of AMERICA, ex rel, PREMALAL
RANASINGHE, IRENE RANASINGHE and KEERTHI
RANASINGHE,
Plaintiffs,
-against-

MEMORANDUM AND ORDER
20-CV-02890 (OEM) (LKE)

OCWEN LOAN SERVICING LLC, HSBC BANK
USA NATIONAL ASSOCIATION, US BANK
NATIONAL ASSOCIATION, MORTGAGE
ELECTRONIC REGISTRATION SYSTEM,
LEOPOLD & ASSOCIATES PLLC, and McCABE,
WEISBERG & CONWAY P.C.,
Defendants.
----------------------------------------------------------------------X
ORELIA E. MERCHANT, United States District Judge:
On June 30, 2020, Plaintiffs-Relators Premalal Ranasinghe, Irene Ranasinghe, and Keerthi
Ranasinghe (collectively “Relators”) commenced this action against defendants Ocwen Loan
Servicing, LLC (“Ocwen”), HSBC Bank USA National Association (“HSBC”), U.S. Bank
National Association (“US Bank”), Mortgage Electronic Registration System (“MERS”), Leopold
& Associates PLLC (“Leopold”), and McCabe, Weisberg & Conway LLC (“McCabe”). Relators
allege violations of the False Claims Act (“FCA”), 31 U.S.C. § 3729, on behalf of the United States
of America (“United States”). Amended Complaint (“AC”), ECF 87. Before the Court are
motions to dismiss filed by: (1) Defendant Ocwen, ECF 113; (2) Defendants HSBC and US Bank
(the “Trust Defendants”), ECF 114; and (3) Defendant McCabe, ECF 119.
For the following reasons, Defendants’ motions to dismiss are granted and this action is
dismissed in its entirety.

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BACKGROUND
A. The Home Affordable Modification Program
The 2008 housing crisis, resulting in part from mortgage fraud and predatory lending
practices, caused home prices in the United States to plummet and foreclosures to skyrocket,
leaving homeowners unable to sell or refinance their homes to meet their mortgage obligations.1
See, e.g., Picini v. Chase Home Finance LLC, 854 F. Supp. 2d 266, 269 (E.D.N.Y. 2012). In
response to the crisis Congress enacted the Emergency Economic Stabilization Act of 2008, which
authorized the U.S. Department of Treasury (“Treasury Department”) and the Federal National
Mortgage Association (“Fannie Mae”) to administer the Home Affordable Modification Program
(“HAMP”). See AC ¶¶ 11, 13; Servicer Participation Agreement, AC Ex. A, ECF 87-1. HAMP
was a voluntary program designed to provide affordable loan modifications and other foreclosure
prevention services to eligible borrowers through participating mortgage servicers. Id.; see 12
U.S.C. § 5219(a). The program helped to guarantee that when a mortgage was modified, the
modification would not result in a mortgage worth less than the value of the property. In return,
mortgage servicers such as Ocwen would receive HAMP incentive payments from the Treasury
Department via Fannie Mae for each successful permanent modification. AC ¶ 14.2 The program
ended in December 2016.
To obtain a HAMP modification, a borrower would apply directly to their mortgage
servicer. The Making Home Affordable Program. If approved, and before a modification would

The Making Home Affordable Program, Dep’t of the Treasury, https://home.treasury.gov/data/troubled-assets-reliefprogram/housing/mha#:~:text=Program%20Purpose%20and%20Overview&text=Since%20its%20inception%2C%2
0MHA%20has,%2Din%2Dlieu%20of%20foreclosure (last accessed December 29, 2024).
1

See Jonathan A. Marcantel, Enforcing the Home Affordable Modification Program, 70 N.Y.U. Ann. Surv. Am. L.
121, 130 (2014) (citing Home Affordable Modification Program, Supplemental Directive 11-06, Making Home
Affordable Program--Updates to Servicer Incentives 1 (2011)); see also Wigod v. Wells Fargo Bank, N.A., 673 F.3d
547, 556 (7th Cir. 2012) (servicers receive incentive payments for permanent loan modifications).
2

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be made permanent, the loan servicer and the borrower would enter a three-month trial period.
The modification would become permanent if: (1) the borrower’s representations of his or her
financial state continue to be true; (2) the borrower complies with the terms of the temporary
payment plan; (3) the borrower provides all required documentation; and (4) the lender determines
that the borrower qualifies. See Making Home Affordable Data File User Guide, at 6, “Exhibit A
– The Life of a HAMP 1st Lien Modification,” Dep’t of the Treasury.3 Once the borrower
successfully completes the trial period, a permanent modification is established and the servicer
reports the permanent modification to the HAMP program administrator. Id. The servicer would
thereafter receive incentive payments.
Defendant Ocwen participated in the HAMP program by offering loan modifications to
defaulting borrowers. AC ¶ 12; Servicer Participation Agreement. Ocwen acted as a mortgage
loan servicing agent for numerous trusts, including the Fremont Home Loan Trust 2004-B, AssetBacked Certificates, Series 2004-B (the “HSBC Trust”) and the Morgan Stanley Mortgage Loan
Trust 2007-11AR, Mortgage Pass-Through Certificates, Series 2007-11AR (the “US Bank Trust”),
for which the Trust Defendants served as Trustees. See AC at 2.
B. Relators’ Mortgage Loans and Foreclosure Actions
Relators Irene Ranasinghe (“Irene”) and Keerthi Ranasinghe (“Keerthi”) entered into
separate mortgage loan agreements serviced by Ocwen and secured by separate properties. AC
¶¶ 25-26, 48-49.

https://home.treasury.gov/sites/default/files/initiatives/financialstability/reports/Documents/MHA%20Data%20File%20User%20Guide%20v12.0.pdf (last accessed December 29,
2024).
3

3

1.

Lerer Lane Property

On June 5, 2002, Irene obtained a mortgage for $345,000 collaterally secured by her
property located at 50 Lerer Lane, Staten Island, NY 10307. Id. ¶ 24. On February 20, 2004, Irene
obtained a second mortgage for $496,000, which was consolidated with the earlier mortgage. Id.
¶ 25. Irene defaulted on the loan, and the servicer, then Litton Loan, issued a notice of default and
intent to accelerate the mortgage on September 27, 2011. Ex. E, ECF 87-5. Thereafter, Litton
Loan notified Irene that, effective November 1, 2011, the loan would be transferred to Ocwen for
servicing. See Ex. F, ECF 87-6.
In 2012, the mortgage was assigned to HSBC, as Trustee for the HSBC Trust. AC ¶ 30;
Ex. H, ECF 87-8. Thereafter, Irene twice applied for HAMP modifications for her loan. See AC
¶ 32. Ocwen denied both applications, stating that Irene was not qualified for the HAMP program.
Id.
The HSBC Trust commenced a foreclosure action on the property in June 2013 in New
York Supreme Court, Richmond County bearing Index No. 130754/2013. See Ex. R, ECF 87-18;
HSBC Bank USA et al v. Ranasinghe, Index No. 130754/2013 (N.Y. Sup. Ct., Richmond Cnty.).
Irene made numerous efforts to challenge the foreclosure, which were unsuccessful. See AC ¶¶
38-45.
Relators allege that Ocwen approved Irene for a HAMP trial modification in February
2016. AC ¶ 45; Ex. AA, ECF 87-27. Relators do not allege that Irene ever made payments on the
loan thereafter or that Ocwen approved a permanent modification of the loan. Relators assert that
“Ocwen took HAMP modification approval from Fannie Mae by submitting fabricated note (sic)
. . . and void assignment by MERS an[d] without any signed application from her. Upon

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information and belief, Ocwen created a false HAMP application and forged Irene’s signature on
the HAMP application.” AC ¶ 46.
2. Holden Boulevard Loan
On February 13, 2007, Keerthi executed a note in the amount of $380,000 secured by a
mortgage on his property located at 224 Holden Boulevard, Staten Island, New York. AC ¶ 48;
Ex. AB, ECF 87-28. U.S. Bank, Successor-in-Interest to US Bank Trust, commenced a foreclosure
action on the Holden Boulevard property in October 2016 in New York Supreme Court, Richmond
County bearing Index No. 135822/2016.

AC ¶ 51; U.S. Bank v. Weerasinge, Index No.

135822/2016 (NY Sup. Ct., Richmond Cnty.). Keerthi made numerous attempts to challenge and
delay the foreclosure action. On February 28, 2022, the New York Supreme Court granted a
judgment of foreclosure and sale to U.S. Bank. U.S. Bank v. Weerasinge, Index No. 135822/2016,
Doc. No. 118.
C. Relators’ Qui Tam Action
In this action Relators allege that Defendants submitted false claims in violation of 31
U.S.C. § 3729(a)(1)(A), made false statements in violation of 31 U.S.C. § 3729(a)(1)(B), and
conspired to submit false claims and make false statements in violation of 31 U.S.C.
§ 3729(a)(1)(C) to the United States under HAMP. AC ¶¶ 67-77. Specifically, Relators assert
that “All defendants knowingly presented false claims for payment or approval that directly or
indirectly supported the defendants[’]” receipt of incentive payments from Fannie Mae under
HAMP by, inter alia, submitting fabricated documents, false certifications, falsely claiming
ownership of Relators’ mortgage rights, and submitting false testimony in state court proceedings.
AC at 3.

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Relators allege that Ocwen, in its role as loan servicer, “presented claims with false
information and obtained HAMP approvals and misused the HAMP program,” id. at 2, that Ocwen
“submitted false statements and a false claim certification” to Fannie Mae by submitting “false
HAMP applications,” id. ¶ 22. Relators claim these submissions were false because Ocwen did so
“without the ownership of [Relators’] mortgage.” Id. ¶ 57. Relators also make numerous
allegations of fraud in connection with their foreclosure proceedings in state court, including that
Ocwen submitted a forged allonge to Relators’ mortgage notes, id. ¶ 59, 60, created a “fraudulent
power of attorney,” id. ¶ 62, and “filed false affidavits before the Supreme Court of New York,”
id. ¶ 40. Relators assert that these affidavits “violat[ed] the terms of the agreement with Fannie
Mae under the HAMP program,” but do not state which terms were violated or how. Id. Relators
claim that “Ocwen also breached agreements with the New York State Department of Financial
Services” by initiating foreclosure actions “without proper documents and without having the
original Note and Mortgage.” Id. ¶ 23. However, Relators do not assert how these alleged
violations relate to their FCA claims.
In addition to the general allegations stated above, Relators imply that Trust Defendants
fraudulently “claimed for the HAMP program that they are Trustees of five trusts claiming that
they were lenders owed Mortgage backed security Trusts (sic).” Id. at 2. Relators allege that “U.S.
Bank defrauded (sic) when [it] filed the HAMP application on behalf of Relator Keerthi.” Id. ¶
56. Relators claim that that U.S. Bank did so when “Ocwen[,] as an attorney-in-fact of U.S.
Bank[,] endorsed [Relator Keerthi’s Mortgage] Note transferring the ownership of ‘U.S. Bank
National Association’ to [the US Bank Trust].” Id. The Amended Complaint does not state who
the Trust Defendants allegedly defrauded, when, where, or how. Relators also make allegations
of fraud against the Trust Defendants in Relators’ foreclosure proceedings. Specifically, the

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Amended Complaint states that the Trust Defendants “fabricated Mortgage Notes and allonges to
create ownership rights through MERS,” id at 2, see id. ¶¶ 54, 59, 60, and that US Bank “created
a fraudulent power of attorney,” id. ¶ 62. Relators assert the mortgage notes were transferred to
“non-existing trusts,” but do not explain anything further. See id. at 2-3, ¶¶ 34-35, 41, 54, 56.
Relators allege that “McCabe committed fraud the US Government on Fannie Mae (sic),
the agent of the United States Government for supporting the defendants to create ownership of
the Mortgages and Notes.” Id. at 3. Relators assert generally that McCabe “colluded to commit
violation[s]” of the FCA “by commencing illegal foreclosure actions based on fraudulent
documents,” id. at 4, without stating any relationship to submissions of claims to the United States.
Relators claim that McCabe made false statements in connection with Relators’ state court
foreclosure actions by “submit[ing] false attorney affirmations[,]” id. ¶ 55, and “fabricat[ing] the
documents” in the second foreclosure complaint against Relator Keerthi. Id. ¶ 60. Similar
allegations are made against Leopold. See id. ¶¶ 35, 38, 40-42.
The Amended Complaint does not provide the dates – or even the range of dates – when
Defendants allegedly submitted false claims and statements to the United States or conspired to
commit such fraud.
D. Procedural History
Relators filed this action on June 30, 2020, and the complaint remained sealed until August
10, 2022, when the United States declined to intervene. See ECF 1, 13, 14. After delays of service
and requests for a premotion conference on intended motions to dismiss by Defendants HSBC,
ECF 41, MERS, ECF 42, Ocwen, ECF 43, US Bank, ECF 44, Leopold, ECF 59, and McCabe,
ECF 60, the Court dismissed Relators complaint with leave to amend on March 8, 2023 for failure
to comply with Rules 8 and 9(b) of the Federal Rules of Civil Procedure. See March, 8, 2023

7

Order. Relators filed a second amended complaint under seal on April 6, 2023, see ECF 65, 66.
The case was reassigned to the undersigned on October 2, 2023. The United States again declined
to intervene, and the second amended complaint was unsealed on October 31, 2023. ECF 69, 70.
Defendants Ocwen, US Bank, HSBC, MERS, and McCabe requested a pre-motion
conference on anticipated motions to dismiss in January 2024. See ECF 74-78. The Court granted
the request, held a pre-motion conference on March 13, 2024, and set a briefing schedule on
Defendants’ motions to dismiss.
On February 9, 2024, Defendant Leopold filed an answer to the second amended
complaint. See ECF 81. On March 25, 2024, the parties jointly stipulated to dismiss MERS as a
defendant to this action. ECF 86.
Relators refiled their amended complaint on April 5, 2024 (herein referred to simply as the
“Amended Complaint”). ECF 87. Defendants Ocwen, HSBC, US Bank, and McCabe filed their
fully briefed motions to dismiss on September 19, 2024. See ECF 113, 114, 119.
E. Defendants’ Motions to Dismiss
Defendants have filed three separate motions to dismiss for failure to state a claim. See
Memorandum of Law in Support of Ocwen’s Motion to Dismiss (“Ocwen Mem.”), ECF 113-25;
Memorandum of Law in Support of HSBC Bank’s and US Bank’s Motion to Dismiss (“Trust Defs’
Mem.”), ECF 114-2; Memorandum of Law in Support of McCabe’s Motion to Dismiss (“McCabe
Mem.”), ECF 119-12. Collectively, Defendants argue the Court must dismiss this case because
(1) Relators have not alleged Defendants obtained loan modifications under HAMP, Ocwen Mem.
at 13; see Trust Defs’ Mem.; (2) Relators have failed to satisfy Federal Rule of Civil
Procedure 9(b)’s heightened pleading standard, id. at 15, McCabe Mem at 4, see Trust Defs’
Mem.; (3) Relators’ claims are barred by the Rooker-Feldman doctrine, Ocwen Mem at 18-21,

8

McCabe Mem. at 8-9, see Trust Defs’ Mem.; (4) Relators’ claims are time barred, Ocwen Mem.
at 21, McCabe Mem. at 11; see Trust Defs’ Mem.; (5) Relators’ claims are released by the
settlement agreement reached in U.S. ex rel. Fisher v. Ocwen Loan Servicing, LLC, 4:12-CV-543
in the United States District Court for the Easter District of Texas, Ocwen Mem. at 22, see Trust
Defs’ Mem.; (6) Relators’ claims are barred by res judicata, McCabe Mem. at 8; and (9) the Court
should abstain under the Colorado River abstention doctrine, id. at 9.
Relators submit lengthy oppositions in response to each. See Memorandum of Law in
Opposition to Ocwen’s Motion to Dismiss (“Ocwen Opp.”), ECF 110; Memorandum of Law in
Opposition to US Bank’s and HSBC’S Motion to Dismiss (“Trust Defs. Opp.”), ECF 111;
Memorandum of Law in Opposition to McCabe’s Motion to Dismiss (“McCabe Opp.”), ECF 112.
The Court notes that Relators’ 36-page memorandum in opposition to Ocwen’s motion fails to
abide by the procedural rules regarding the length of filings, which limits memoranda of law to 25
pages unless leave is granted to exceed such limit. See Individual Practice Rules Section III.F.
Moreover, Relators’ opposition papers are riddled with typos, grammatical errors, incomplete
sentences, and formatting issues that make Relators’ arguments difficult to comprehend.
LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a
complaint based on “failure to state a claim upon which relief can be granted.” FED. R. CIV.
P. 12(b)(6). To avoid dismissal on that basis, a complaint must plead “enough facts to state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A
claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (discussing FED. R. CIV. P. 8). The facial “plausibility standard is not

9

akin to a ‘probability requirement.’” Id. (quoting Twombly, 550 U.S. at 556). In evaluating a
motion to dismiss under Rule 12(b)(6), the court must accept all facts alleged in the complaint as
true. Id. But it need not adopt “[t]hreadbare recitals of the elements of a cause of action” that are
“supported by mere conclusory statements.” Id.
“In determining the adequacy of a claim under Rule 12(b)(6), consideration is limited to
facts stated on the face of the complaint, in documents appended to the complaint or incorporated
in the complaint by reference, and to matters of which judicial notice may be taken.” Wilson v.
Kellogg Co., 628 F. App’x 59, 60 (2d Cir. 2016) (quoting Allen v. WestPoint-Pepperell, Inc., 945
F.2d 40, 44 (2d Cir. 1991)).
“It is self-evident that the FCA is an anti-fraud stature,” and therefore, “claims brought
under the FCA fall within the express scope of Rule 9(b)” of the Federal Rules of Civil Procedure.
Wood ex rel. U.S. v. Applied Research Assocs., Inc., 328 F. App’x. 744, 747 (2d Cir. 2009); accord
U.S. ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 26 (2d Cir. 2016) (“Rule 9(b) principles apply to
complaints filed under the False Claims Act.”). “To satisfy this Rule, a complaint alleging fraud
must ‘(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the
speaker, (3) state where and when the statements were made, and (4) explain why the statements
were fraudulent.’” U.S. ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 25 (2d Cir. 2016) (quoting
Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994)).
DISCUSSION
A. The False Claims Act
The FCA “imposes significant penalties on those who defraud the Government,”
specifically “those who present or directly induce the submission of false or fraudulent claims.”
Universal Health Servs., Inc. v. U.S. ex rel Escobar, 579 U.S. 176, 180-82 (2016). Any person

10

who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or
approval” by the United States, 31 U.S.C. § 3729(a)(1)(A), “knowingly makes, uses, or causes to
be made or used, a false record or statement material to [such] a false or fraudulent claim,” id. §
3729(a)(1)(B), or “conspires to commit [such a] violation,” may be liable under the FCA, id. §
3729(a)(1)(C). A “claim” is defined as “any request or demand . . . for money or property . . . that
(i) is presented to an officer, employee, or agent of the United States.” 31 U.S.C. § 3729(b)(2)(A);
see Mikes v. Straus, 274 F.3d 687, 696 (2d Cir. 2001) (interpreting “false claim” as one “aimed at
extracting money the government otherwise would not have paid.”). The term “knowing” means
that a person either “(i) has actual knowledge of the information; (ii) acts in deliberate ignorance
of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth or falsity of
the information,” but it does not require “proof of specific intent to defraud.” Id. § 3729(b)(1)(A),
(B). As relevant here, a private person may bring a civil “qui tam” action on behalf of the United
States as a “relator” for violations of the FCA. 31 U.S.C. § 3730(b).
A § 3729(a)(1)(A) claim must allege facts showing “that defendants (1) made a claim, (2)
to the United States, (3) that is false or fraudulent, (4) knowing of its falsity, and (5) seeking
payment from the federal treasury.” Mikes v. Straus, 274 F.3d 687, 695 (2d Cir. 2001), abrogated
on other grounds by United Health Servs., Inc. v. United States, 579 U.S. 176 (2016). A
§ 3729(a)(1)(B) claim “must allege that the defendant (1) created, used, or caused to be used, a
record or statement; (2) that is false or fraudulent, (3) knowing of its falsity, (4) to get a false or
fraudulent claim paid or approved by the government.” U.S. ex rel. Doe v. Taconic Hills Cent.
Sch. Dist., 8 F. Supp. 3d 339, 346 (S.D.N.Y. 2014), aff’d sub nom. U.S. ex rel. Doe v. New York
State Sch. Dists., 597 F. App’x 16 (2d. Cir. 2015) (citations omitted). For both claims, a relator

11

must allege with particularity that Defendants made false claims or statements to the United States
and that Defendants knew they were false.
To state a claim of conspiracy to violate the FCA under § 3729(a)(1)(C), a relator must
allege that “(1) the defendant conspired with one or more persons to get a false or fraudulent claim
allowed or paid by the United States and (2) one or more conspirators performed any act to effect
the object of the conspiracy.” U.S. ex rel. CKD Project, LLC v. Fresenius Med. Care Holdings,
Inc., 551 F. Supp. 3d 27, 48 (E.D.N.Y. 2021). The first prong requires the relator allege that
defendant and the entity who submitted the claim “agreed to defraud the government.” U.S. ex rel.
Ladas v. Exelis, Inc., 824 F.3d 16, 27 (2d Cir. 2016) (quotation marks omitted).
B. The Complaint Fails to Plead Fraud with Particularity
1. The Requirements of Rule 9(b)
Rule 9(b) requires a party “state with particularity the circumstances constituting fraud or
mistake.” Ladas, 823 F.3d at 25 (citations omitted). This means that a complaint alleging fraud
must “set forth the who, what, when, where and how of the alleged fraud.” U.S. ex rel. Polansky
v. Pfizer, Inc., 04-CV-0704 (ERK), 2009 WL 1456582, at *4 (E.D.N.Y. May 22, 2009) (citations
omitted). The purpose of this heightened pleading requirement is “threefold – it is designed to
provide a defendant with fair notice of a plaintiff’s claim, to safeguard a defendant’s reputation
from improvident charges of wrongdoing, and to protect a defendant against the institution of a
strike suit.” Wood ex rel. U.S. v. Applied Research Assocs., Inc., 328 F. App’x 744, 747 (2d Cir.
2009). The Second Circuit rigorously enforces “these salutary purposes of Rule 9(b).” Ross v.
Bolton, 904 F.2d 819, 823 (2d Cir. 1990).
There are, however, circumstances where relators may be exempt from “the generally rigid
requirement that fraud be pleaded with particularity.” Doe 1 v. EviCore Healthcare MSI, LLC,

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22-530, 2023 WL 2249577, at *2 (2d Cir. Feb. 28, 2023) (summary order) (citation omitted). For
the relaxed Rule 9(b) standard to apply, a “relator must make allegations that lead to a strong
inference that specific claims were indeed submitted and also plead that the particulars of those
claims were peculiarly within the opposing party's knowledge.” U.S. ex rel. Chorches for Bankr.
Est. of Fabula v. Am. Med. Response, Inc., 865 F.3d 71, 86 (2d Cir. 2017). Importantly, “th[e]
exception to the general rule is not to be mistaken for license to base claims of fraud on speculation
and conclusory allegations.” Wexner v. First Manhattan Co., 902 F.2d 169, 172 (2d Cir. 1990).
2. Failure to Specify False Claims under 31 U.S.C. §§ 3729(a)(1)(A) and (B)
To state a claim under both §§ 3729(a)(1)(A) and (B), Relators must allege with
particularity that Defendants made false claims or statements to the United States.
As a threshold matter, Ocwen and the Trust Defendants argue that Relators never allege
Defendants submitted false claims to the United States – rather, Relators admit they never agreed
to or made payments under any HAMP loan modification. Ocwen Mem. at 14; see Trust Defs’
Mem. at 2.4 Because Relators do not allege “successful loan modifications,” Ocwen argues, they
cannot state a claim on the basis that Defendants submitted claims to the United States seeking
incentive payments. Id. Ocwen further argues that Relators’ repeated allegations about fraudulent
documents and “non-existing” trusts in relationship to the foreclosure actions are irrelevant to
Relators’ FCA claims because such documents have no relationship to the HAMP modification
program. Id. at 14-15. Rather, Ocwen asserts that it was required to submit loan modifications
and payment information to Fannie Mae, see AC Exhibit A, at 4 ¶ G, not in any filings during

The Trust Defendants’ Memorandum of Law states that it adopts and incorporates all arguments set forth in Ocwen’s
motion. The parties are represented by the same counsel. Accordingly, the Court’s findings as to Ocwen equally
apply to the Trust Defendants.
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Relators’ foreclosure actions. Id. Lastly, Ocwen argues Relators’ allegation that Ocwen receives
incentive payments using fabricated trusts is conclusory and should be disregarded. Id. at 15.
In response, Relators newly allege that Keerthi made trial payments to Ocwen’s
predecessor Saxson Mortgage (“Saxson”) under the HAMP modification program. Ocwen Opp.
¶¶ 111-115, citing AC Ex. AC; see generally AC. Ocwen and the Trust Defendants reply that
Relators may not raise new factual allegations in briefings to cure defects in their operative
pleadings,5 and the Court agrees. “Plaintiff may not amend his complaint through motion papers
and the Court will not consider these newly raised allegations.” U.S. ex rel. Siegel v. Roche
Diagnostics, Corp., 988 F. Supp. 2d 341, 343 (E.D.N.Y. 2013) (citation omitted); accord Wright
v. Ernst & Young LLP, 152 F.3d 169, 178 (2d Cir. 1998) (party is not entitled to amend its
complaint through statements made in motion papers); Rahman v. U.S. Dep’t of Homeland Sec.,
593 F. Supp. 3d 49, 58 (E.D.N.Y. 2022), aff’d sub nom. Rahman v. Mayorkas, 22-904-CV, 2023
WL 2398027 (2d Cir. Mar. 8, 2023) (rejecting claims raised for the first time in opposition to a
motion to dismiss).
More generally, Defendants argue that Relators fail to plead fraud with particularity
because they do not identify specific claims or certifications submitted to the United States but
simply make conclusory allegations. See Ocwen Mem. at 17; Trust Defs’ Mem. at 3; McCabe
Mem. at 6. Relators make virtually no legal argument in response. Instead, Relators state hardly
intelligible factual allegations and conclusory statements that they have sufficiently plead fraud
with particularity. See Ocwen Opp. at 10-11. This does not constitute adequate briefing in
opposition.

Ocwen also argues that these newly raised allegations fail to state a claim against it because the alleged payments
were made to Saxson, who is not Ocwen’s “predecessor.” Ocwen Reply at 2. Rather, Ocwen argues that it merely
acquired Saxson’s servicing rights, and therefore Relators have failed to claim Ocwen submitted any false HAMP
claims.
5

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The Court agrees with Defendants. “An FCA complaint must plead specific facts showing
that a defendant submitted or caused the submission of a false or fraudulent claim to the
government.” United States v. Medtronic, Inc., 18-CV-1628 (KPF), 2024 WL 4165522, at *6
(S.D.N.Y. Sept. 12, 2024) (citing Chorches, 865 F.3d at 84). It is not enough to plead an
“underlying scheme[] and other wrongful activities that result in the submission of fraudulent
claims,” rather Relators must also state “actual false claims submitted to the government that
constitute the essential element of an FCA qui tam action.” Polansky, 2009 WL 1456582, at *5
(quoting U.S. ex rel. Karvelas v. Melrose–Wakefield Hosp., 360 F.3d 220, 232 (1st Cir. 2004)
(without such allegations, there is simply “no actionable damage to the public fisc as required
under the [FCA.]”)). Without pleading the “details that identify particular false claims for payment
that were submitted to the government” a claim brought under the FCA fails to satisfy Rule 9(b).
U.S. ex rel. Bilotta v. Novartis Pharms. Corp., 50 F. Supp. 3d 497, 510 (S.D.N.Y. 2014) (finding
that “at least some” of the following details must be plead: “the dates of the claims, the content of
the forms or bills submitted, their identification numbers, the amount of money charged to the
government, the particular goods or services for which the government was billed, the individuals
involved in the billing, and the length of time between the alleged fraudulent practices and the
submission of claims based on those practices”); accord United States v. Cath. Health Sys. of Long
Island Inc., 12-CV-4425 (MKB), 2017 WL 1239589, at *16-17 (E.D.N.Y. Mar. 31, 2017)
(adopting same); Medtronic, 2024 WL 4165522, at *6 (plaintiffs must allege particulars of false
claims themselves).
In this case, the operative complaint makes conclusory allegations that “all Defendants”
made false or fraudulent claims to the United States. See AC at 2-3; ¶¶ 22, 25, 27, 61, 67-74.
These allegations do little more than track the language of the subsections of the FCA that were

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allegedly violated. They fail to specify the nature or role of each Defendant’s alleged participation
in the fraud, the specific false claims or certifications at issue, or any other details of the “who,
what, when, where, and how of the alleged fraud.” Polansky, 2009 WL 1456582, at *4 (citation
omitted). Further, “Rule 9(b) is not satisfied where the complaint vaguely attributes the alleged
fraudulent statements to ‘defendants’” in a general manner. United States v. New York Soc. for
the Relief of the Ruptured & Crippled, Maintaining the Hosp. for Special Surgery, 07-CV-292
(PKC), 2014 WL 3905742, at *19 (S.D.N.Y. Aug. 7, 2014) (quoting Mills v. Polar Molecular
Corp., 12 F.3d 1170, 1175 (2d Cir.1993)). “Where multiple defendants are asked to respond to
allegations of fraud, the complaint should inform each defendant of the nature of his alleged
participation in the fraud.” Id. (quoting DiVittoria v. Equidyne Extractive Indus., Inc., 822 F.2d
1242, 1247 (2d Cir.1987)). Relators’ blanket allegations of misconduct by “all defendants”—
without attributing specific conduct to specific defendant—fail to clear Rule 9(b)’s heightened
pleading standard.
Relators’ allegations against specific Defendants fare no better. As stated above, Relators
allege that “Ocwen had received and upon information and belief, is presently receiving incentive
payments using fabricated trusts for and on behalf of HSBC and U.S. Bank by submitting
unauthorized claims of Mortgages and Mortgage Notes with fabrication of Mortgage Notes.” AC
at 3. As against the Trust Defendants, Relators allege that the Trust Defendants asserted “in the
HAMP program that they are Trustees of five trusts claiming that they were lenders owned (sic)
Mortgage backed security Trusts,” id. at 2 and that “U.S. Bank defrauded (sic) when they filed the
HAMP application on behalf of Relator Keerthi,” id. ¶ 56. Lastly, Relators baldly allege that
“McCabe committed fraud the US Government on Fannie Mae (sic).” Id. at 3.

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These allegations fail to specify any details that Rule 9(b) requires to plead fraudulent
submissions to the United States, including the dates of the alleged fraud or how these claims were
submitted. At its most specific, the Amended Complaint alleges that Trust Defendants filed
HAMP applications on behalf of Relator Keerthi. But, once again, Relators say nothing about
claims submitted to the United States for payment. Relators fail to provide any specific factual
allegations to support their contention that the Trust Defendants filed HAMP applications on
behalf of Relator Keerthi. Rather, the allegations “appear[] to rest solely on speculation and
conclusory allegations.” U.S. ex rel. Piacentile v. Amgen, Inc., 336 F. Supp. 3d 119, 132 (E.D.N.Y.
2018) (citations omitted). As Relators readily admit, HAMP provides incentive payments for
successful HAMP modifications to loan servicers. AC ¶ 14. The Trust Defendants are not loan
servicers and would not submit HAMP modifications to the United States, and therefore are also
not eligible to receive incentive payments. Thus, the allegations lack any facial plausibility.
Further, under the relaxed 9(b) standard, “to survive dismissal under Rule 9(b) when the
complaint pleads only on information and belief that fraudulent claims were actually submitted to
the United States, a plaintiff must (1) ‘make plausible allegations that the bills or invoices actually
submitted to the government were uniquely within [the defendant's] knowledge and control,’ and
(2) ‘adduce specific facts supporting a strong inference of fraud.’” U.S. ex rel. Gelbman v. City
of N.Y., 790 F. App’x 244, 248 (2d Cir. 2019) (quoting Chorches, 865 F.3d at 83 (quotation marks
omitted)); accord United States v. Strock, 982 F.3d 51, 66 (2d Cir. 2020) (“‘Rule 9(b) permits
knowledge to be averred generally,’ but plaintiffs . . . still must ‘plead the factual basis which gives
rise to a strong inference of fraudulent intent.’” (quoting O’Brien v. Nat’l Prop. Analysts Partners,
936 F.2d 674, 676 (2d Cir. 1991))). The allegations which rest upon “information and belief” fail
to allege that submissions are “uniquely within Defendants’ control.” Chorches, 865 F.3d at 83.

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In fact, Relators state that their “case is one that is personally known to them.” AC ¶ 22. Relators
also do not provide any facts to support a “strong inference” of fraudulent submissions to the
United States. “In sum, viewed individually or in the aggregate, Relator[s’] ‘evidence and
arguments proceed more by insinuation than any factual or statistical evidence that would
strengthen the inference’ that [Defendants] orchestrated the submission of fraudulent claims to
government programs ‘beyond possibility.’” Medtronic, 2024 WL 4165522, at *10 (quoting
Hagerty ex rel. U.S. v. Cyberonics, Inc., 844 F.3d 26, 33 (1st Cir. 2016)).
Finally, a substantial majority of Relators’ allegations are that Defendants made false
statements and submitted fabricated documents, including fraudulent mortgages and notes, in order
to assert foreclosure rights in state court foreclosure proceedings. See, e.g. AC ¶¶ 40, 54, 55, 59,
60. Without reaching the propriety of this Court’s review of the state court judgments in those
cases under the Rooker-Feldman doctrine, these allegations plainly fail to state a claim under the
FCA. Accepting Relators’ allegations as true that Defendants falsified documents in order to
obtain title to Relators’ properties, such fraud has no plausible connection to any false claims made
to the United States seeking payment from the Treasury. See Mikes, 274 F.3d at 695. The Supreme
Court has repeatedly made clear that “The False Claims Act is not ‘an all-purpose antifraud
statute,’ or a vehicle for punishing garden-variety breaches of contract or regulatory violations.”
Universal Health Servs., Inc. v. United States, 579 U.S. 176, 194 (2016) (quoting Allison Engine
Co v. United States ex rel. Sanders, 553 U.S. 662, 672 (2008)). Therefore, any alleged frauds
perpetrated by Ocwen, HSBC, US Bank, and McCabe in connection with the foreclosure
proceedings are not properly pleaded under the FCA in this action.
Accordingly, the Court finds that Relators have failed to allege with particularity false
claims or statements submitted to the United States for payment.

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3. Failure to Adequately Plead Conspiracy under § 3729(a)(1)(C)
“To state a claim under this subsection, a relator must show that: (1) the defendant
conspired with one or more persons to get a false or fraudulent claim allowed or paid by the United
States and (2) one or more conspirators performed any act to effect the object of the conspiracy.”
Amgen, 336 F. Supp. 3d at 136 (citations omitted). The first prong requires Relators to allege that
there was “an agreement to defraud the government between two or more persons coupled with
any act to get a false or fraudulent claim allowed or paid.” U.S. ex rel. Taylor v. Gabelli, 345 F.
Supp. 2d 313, 331 (S.D.N.Y. 2004) (citation omitted); accord Ladas, 824 F.3d at 27.
The Amended Complaint’s only mention of a conspiracy alleges that “Defendants shared
one or more acts in furtherance of the conspiracy to defraud the United States and Fannie Mae to
receive incentive payments or to support already submitted applications that established ownership
of the Mortgages and Mortgage Notes.” AC ¶ 76. Relators have failed to plead with particularity
that Defendants conspired to violate the FCA. They do not identify any agreement among the
Defendants, the object of that agreement, or when such an agreement occurred. The conspiracy
claims are therefore dismissed for failure to state a claim.
4. Claims against Leopold
Relators generally allege that Leopold committed violations of the FCA by submitting
“unethical legal opinions” “fraudulent and false affidavits,” “false affirmations, and other
documents” in connection with Relators’ foreclosure actions. AC at 2-4, ¶¶ 40, 42.
Leopold has not moved to dismiss the Amended Complaint. However, in response to
Plaintiff’s initial complaint Leopold filed a pre-motion conference request in anticipation to a
motion to dismiss. ECF 59. In its request, Leopold argued in part that Relators’ complaint lacked

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facial plausibility and failed to state a claim with particularity under the FCA, id., the same grounds
which the moving Defendants seek to dismiss the claims against them in the instant motion.
Sua sponte dismissal of the claims against Leopold is appropriate here for the same reasons
discussed above: Relators have failed to state a claim under the FCA with particularity. The claims
against the nonmoving and moving Defendants are virtually identical. “Because the Court's
rulings in this Order would apply equally to the [moving and nonmoving] Defendant[s] . . . the
Court dismisses the claims against [the nonmoving Defendant] sua sponte.” Malek v. New York
Unified Ct. Sys., 22-CV-5416 (HG) (RER), 2023 WL 2429528, at *20 (E.D.N.Y. Mar. 9, 2023)
(alterations in original), appeal dismissed (July 7, 2023), appeal dismissed (July 10, 2023), appeal
dismissed (July 10, 2023), appeal dismissed (July 10, 2023) (quoting Beck v. City of N.Y., No. 12cv-9231, 2014 WL 80544, at *1 (S.D.N.Y. Jan. 3, 2014)). As with the moving Defendants,
Relators make no allegations that Leopold submitted, or caused to be made or used for such
submission, to the United States for payment – let alone the details of “who, what, when, where
and how” the alleged fraud was committed. Relators had ample opportunity to amend the
complaint in response to Leopold’s and the moving Defendants’ initial arguments for dismissal
and to respond to the argument that it has failed to state a claim in its amended complaint, but
Relators failed to do so. See Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 26 n. 6 (2d
Cir.1990) (citation omitted) (sua sponte dismissal appropriate where issues concerning defendant
are essentially the same as those issues faced by defendants whose motions for dismissal were
granted); Wachtler v. County of Herkimer, 35 F.3d 77, 82 (2d Cir.1994) (a district court may
dismiss a complaint sua sponte if it fails to state a claim against non-moving defendants).6

Even if it can be said that Plaintiff’s amended complaint and three memorandums of law in opposition to the moving
defendants’ motions do not constitute an “opportunity to be heard” on its claims against Leopold, the Court would
dismiss Relators’ claims as frivolous. “A claim is frivolous,” thus giving a court the authority to dismiss such a claim,
when it “lacks an arguable basis either in law or in fact.” Neitzke v. Williams, 490 U.S. 319, 325 (1989); abrogated
6

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Because the Court dismisses all of Relators’ claims for failure to plead with particularity,
the Court need not address the other issues raised in Defendants’ motions to dismiss.
CONCLUSION
For the reasons stated above, Defendants’ motions to dismiss are granted. Further, the
Court dismisses sua sponte all claims against defendant Leopold for failure to state a claim upon
which any relief may be granted. Accordingly, the action is dismissed in its entirety.
SO ORDERED.
/s/
ORELIA E. MERCHANT
United States District Judge
March 12, 2025
Brooklyn, New York

on other grounds by Twombly, 550 U.S. 544. Dismissal without notice is appropriate “where, as here, the
frivolousness of a complaint is clear from prior litigation history and so notice serves little purpose.” Curcio v. Abrams,
No. 22-693, 2023 WL 31183, at *2 (2d Cir. Jan. 4, 2023). The Court finds that Relators’ allegations that Leopold
violated the FCA by making representations during the foreclosure proceedings, see AC ¶ 40, is “wholly incredible.”
Malek, 2023 WL 2429528, at *20, n. 28 (quoting Thomas v. Carter, 581 F. Supp. 3d 651, 654 (S.D.N.Y. 2022).

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