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Wednesday, March 20, 2002
Copyright © Las Vegas Review-Journal

Mortgage broker relinquishes Nevada license

David Ferradino, former owner of Interstate Mortgage Group which failed in 1999, agreed to relinquish his mortgage brokerage license.

In an agreement and order filed Monday, Ferradino "agrees to never be involved in any way in the mortgage broker business in the State of Nevada."

Bryan Nix, senior appeals officer with the Nevada Department of Administration, was scheduled to hold hearings on Ferradino's license revocation. He signed the document Monday.

Interstate Mortgage used $140 million from 1,000 investors, many of them elderly, to make mortgage loans to home builders and developers. The state Financial Institutions Division, however, seized the company in November when it became insolvent.

The state agency initiated proceedings to strip Ferradino, the owner and key manager, of his brokerage, but Ferradino was allowed to assist receiver George Swarts unwind the affairs of his business. State District Judge Lee Gates, meanwhile, postponed hearings on the revocation of Ferradino's license.

In November, Gates denied a request from Ferradino to stop the revocation hearings any longer. In January, the judge sentenced Ferradino to five years' probation for theft and ordered him to make $4.27 million in restitution to investors.

Ferradino's attorneys argued that Ferradino should be allowed to voluntarily relinquish his license without hearings on alleged misconduct. The attorney general's office and Financial Institutions Division insisted on holding hearings on Ferradino in order to establish a record of questionable actions so that he couldn't obtain a new license later.

However, Joseph Long, deputy attorney general and the attorney for the state Financial Institutions Division, signed the stipulation and order, along with Pamela Lawson, Ferradino's attorney.

Long and division officials couldn't be reached for comment late Tuesday.

"It doesn't smell right," said John Netzorg, an attorney for some of the investors. "The only flurry of activity with the state is that everyone is attempting to evade any responsibility. It is pathetic."