On September 11, the U.S. District Court for the Southern District of California denied a mortgage company’s motion to dismiss an action by the U.S. government alleging the company violated the False Claims Act by falsely certifying compliance with FHA mortgage insurance requirements. According to the opinion, the government intervened in a former employee’s suit against the company and alleged that the company, a participant in HUD’s Direct Endorsement Lender program, had failed to report loans to HUD that presented “material risk and ‘[f]indings of fraud or other serious violations’ discovered during the ‘normal course of business and by quality control staff during reviews/audits of FHA loans.’” The company moved to dismiss the action, arguing that the government failed to allege a scheme that was designed to flout specific FHA requirements. In denying the motion, the court concluded that the government sufficiently alleged the “who, what, where, how, and why” of the company’s misconduct, noting that the company “knew, or should have known, that the certifications of compliance it made at the time of endorsement were false because the falsities were facially apparent from the loan files that it was required to underwrite in accordance with HUD’s requirements.” The court also concluded that the government sufficiently pleaded its breach of fiduciary duty and breach of contract claims.