Auditors performing a review of Ocwen Financial Corp. padded time sheets and claimed excessive and improper expenses, including lengthy travel and meals at strip clubs and casinos, according to a lawsuit filed against Fidelity Information Services LLC.

The California Department of Business Oversight selected FIS to review servicing practices of mortgages in the state in June 2015. Ocwen was to pay for the independent audit, which was budgeted to cost nearly $45 million and take two years to review 50,000 loans.

Instead, FIS employees blew through that budget in less than a year by inflating their hours worked and claiming excessive expenses for travel, lodging and meals, while reviewing only about half of the loans required during the engagement, Ocwen claims in the lawsuit, filed May 18 in California's Superior Court in Sacramento.

"FIS exploited its position to enrich itself at Ocwen's expense. It viewed this engagement as a license to steal from Ocwen," it reads.

Fidelity Information Services LLC is a subsidiary of Fidelity National Information Services Inc. In a statement, the company denied the lawsuit's allegations.

"The complaint filed by Ocwen Loan Servicing against FIS is completely baseless and we plan to defend ourselves vigorously against these false allegations and to pursue collection of the invoices this litigation was filed to avoid," spokeswoman Rachel Gerber said by email.

Ocwen is seeking monetary damages to be determined at trial and restitution. It claims the cost overruns put FIS on pace to charge Ocwen $120 million for the project, prompting the California DBO to halt the audit and enter into a new $225 million settlement with Ocwen in February. In addition to nearly $200 million in mortgage debt forgiveness for California borrowers, the new order designates $5 million for a new third-party auditor to complete the work FIS did not finish.

The California DBO declined to comment on the substance of the lawsuit.

"Ocwen had failed for more than a year to provide loan file information that the department needed to conduct a routine regulatory examination," DBO spokesman Mark Leyes said by email.

"The FIS-Ocwen engagement letter signed by Ocwen in July 2015 made clear that in the event of a dispute between FIS and Ocwen, no dispute would relieve Ocwen of its obligation to pay the invoices when due and that the dispute must be presented to the department for resolution," the statement adds. "Although the department is aware of a dispute, the matter has not been presented to the department for resolution by the parties."

The lawsuit lists five adult entertainment and casino venues where auditors allegedly expensed meals in violation of FIS's travel and expense policy. FIS also allowed associates to buy liquor and groceries for personal at-home consumption, as well as gifts for colleagues, and charged those expenses to Ocwen, the lawsuit claims.

In addition, billable work hours submitted by FIS "strains credulity," Ocwen alleges. One worker, for example, claimed monthly hours worked equivalent to more than 13 hours per weekday. Another claimed to have worked 11-hour days while at the same time claiming mileage for driving nearly five additional hours per day.

In another example, Ocwen claims it was billed nearly 18,000 hours at a cost of almost $2.7 million for one month of compliance review work that resulted in just 356 loans being audited. Those amounts are equivalent to 50 hours and $7,520 per loan, roughly 10 times the 4.8 hours and $720 per loan that FIS had budgeted for the audit.

"On information and belief, dozens of associates routinely billed high hours that cannot be reconciled with the startling lack of production resulting from their 'billed' time," the lawsuit says.

Other alleged expense irregularities include workers who simultaneously claimed hotel expenses and costs for more than 2,000 miles of driving in the same month, as well as hotel charges that exceeded the $185 nightly limit, such as a one-night stay that cost more than $500.

Ocwen was billed nearly $5 million for project oversight services to avoid the type of improper activities cited in the lawsuit. But when Ocwen raised concerns about the cost overruns and provided evidence of employee misconduct, FIS was reticent about providing documentation to substantiate the expenses.

"FIS took the position that Ocwen had no right to question FIS's bills of FIS's decisions regarding the execution of the review, because FIS had been appointed by the California DBO," the lawsuit reads.

The California DBO solicited applications for vendors to perform the third-party audit in January 2015. Its request for proposals requires applicants to disclose any actual or perceived conflicts of interest with Ocwen and its affiliates.

The FIS audit found that Ocwen jeopardized mortgage modifications by misdating letters, wrongly informed borrowers in loss mitigation denial letters that they were current on payments, and failed to fulfill a federal requirement to reduce interest rates to 6% in a timely manner for active-duty military members.

After the February settlement with the DBO, Ocwen faced a fresh wave of scrutiny in April, when the Consumer Financial Protection Bureau and more than 30 states filed lawsuits and other regulatory actions against the beleaguered nonbank servicer. Ocwen is fighting the CFPB's action in court.

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