Attorney General Michelle Henry announced a civil complaint filed against a group of Lehigh Valley-based mortgage brokers and their manager, Barry Newhart, regarding a kick-back scheme that involved real estate agents directing potential home buyers to the brokers.

Newhart and the brokers offered real estate agents discounted ownership in a joint venture mortgage brokerage company, sporting event tickets, dinners, and other kickbacks, in exchange for the agents steering clients to the mortgage brokerage, according to the complaint. The buyers were unaware of the scheme.

The Office of Attorney General’s lawsuit alleges that Newhart and the brokers’ sales practices violate Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, the federal Consumer Financial Protection Act, and the Real Estate Settlement Procedures Act. The office is seeking injunctive relief, civil penalties, restitution, costs and attorneys fees, as well as other relief to end this kickback scheme.

“Buying a home can be a stressful and challenging time, and this group of mortgage brokers and real estate agents conspired to serve themselves while betraying buyers,” Attorney General Henry said. “Consumers, especially those who are making large financial investments like the purchase of a home which is very often a family’s most valuable asset, deserve to know if businesses assisting them have conflicts of interest.”

According to the lawsuit, in an attempt to evade a federal ban for the kickback scheme, Newhart allegedly concocted and executed a complex scheme in an attempt to disguise the kickbacks as stock sales and cash to referring real estate professionals.

The mortgage broker defendants include: Bright Financial Group, LLC; Conquest Mortgage, LLC; Flagship Home Loans, LLC; Legacy Mortgage Partners, LLC; Nittany Home Loans, LLC; and MCT Financial, LLC.

Attorney General Henry urges any consumers who believe they may have been a victim of any of the defendants’ business practices to file a complaint online, by calling the Consumer Protection Hotline at 1-800-441-2555, or by emailing scams@attorneygeneral.gov.

This complaint has been filed in the United States District Court for the Eastern District of Pennsylvania by Deputy Attorney General Pat Gavin.