SAN ANTONIO, Nov. 13, 2018 /PRNewswire/ -- A motion for new trial filed by Amrock (formerly Title Source) in the Bexar County, Texas State Court today revealed shocking new evidence of an alleged fraudulent scheme perpetrated by HouseCanary and the extensive lengths to which HouseCanary went to mask evidence and mislead the jury in a seven-week trial.
Included in the 97-page filing are sworn affidavits from three former HouseCanary executives, who post-verdict divulged details of the scheme and collusion that resulted in an unprecedented, egregious verdict by a jury that was misled by the falsehoods. In addition, the filing reveals numerous and troublesome problems that occurred at the trial, any one of which, on their own would be grounds for a new trial.
"This is one of the most egregious frauds that I have ever seen in my 35-year career as a litigator and former federal prosecutor," said Randy Mastro, a Gibson Dunn attorney now representing Amrock. "This shocking verdict is now wholly undermined for many reasons by several former HouseCanary executives who have come forward for the first time, as a matter of conscience, to blow the whistle on this fraud. As these witnesses now confirm in their sworn accounts, the jury in this case was simply duped and misled. Had it known the truth, no reasonable jury would have rendered this unprecedented verdict. The deception, collusion and cover-up that occurred here require a new trial so the truth can be told and justice served."
The day after the trial, the first whistleblower sent an anonymous email to Amrock's CEO revealing, for the first time, that HouseCanary had colluded with a former executive. Together, they hid the fact that HouseCanary provided Amrock non-functional software and that HouseCanary lacked any proprietary products. Later identified as the former HouseCanary Director of Appraiser Experience, the individual came forward with a sworn statement detailing firsthand knowledge from the executive's time at HouseCanary, risking potential retaliation.
Shortly after the initial whistleblower came forward, two additional former HouseCanary executives also came forward providing sworn statements that corroborated and offered further insight into the fraudulent scheme that HouseCanary perpetrated on Amrock and the court.
All three whistleblowers revealed that HouseCanary CEO Jeremy Sicklick coaxed a former Amrock executive to collude with HouseCanary executives, concocting a duplicitous sham misrepresenting HouseCanary's offerings. This was the same former executive who was also serving as Amrock's lead point person charged with negotiating the contract with HouseCanary to implement its "software". Sicklick also cajoled the former Amrock executive to introduce the company to key data vendors, as well as conduct sales pitches and product demonstrations on HouseCanary's behalf (while still employed as a senior executive at Amrock).
Together, the Amrock executive, who testified at trial for the company, and Sicklick conspired to misrepresent the readiness and authenticity of HouseCanary products to Amrock in order to prompt the company to enter into a lucrative contract for what turned out to be non-existent HouseCanary products. The relationship went so deep that the two executives collaborated to solicit investments from high-profile individuals and firms, ultimately raising $64 million for HouseCanary through their combined efforts.
After becoming aware of Amrock's investigation, HouseCanary attempted to take desperate steps to prevent the truth from coming to light, including asking the court to put a stop to the investigation – a request that HouseCanary was ultimately forced to withdraw.
In a further attempt to keep the truth from coming out, HouseCanary conducted a disingenuous effort offering lucrative, post-trial "consulting agreements" – paying upwards of $250 an hour for work that was never defined or expected to be performed. This was a clear attempt to bribe the former HouseCanary employees for their silence. One whistleblower stated that a HouseCanary representative informed him that he "would be paid handsomely." The whistleblower understood this to be an offer to provide testimony favorable to HouseCanary or to stay quiet, at best.
Central to HouseCanary's arguments were claims that Amrock misappropriated the company's trade secrets. However, all three whistleblowers confirmed, under the penalty of perjury, HouseCanary never had any trade secrets to steal.
According to HouseCanary's former Managing Director of Analytics and Data:
"Together, the failures of the [sic] HouseCanary's two principal products – the AVM [automated valuation model] and the Appraisal App – led me to view HouseCanary as a "house of cards" and to conclude that there was a gap between their public-facing statements about these products, and the technical and market reality."
As shocking as it may seem, the blatant fraud perpetrated on the court is only one of several significant reasons that each separately warrant a new trial in this case.
To distract from the truth throughout the trial, HouseCanary's counsel engaged in passionate and deliberate attacks on the integrity of Amrock. In fact, in their closing arguments, HouseCanary's counsel informed the jury that this was "their opportunity to teach corporate America a lesson".
These kinds of inflammatory tactics, although commonplace on highly dramatized court television programs, have resulted in the granting of a new trial by itself.
Today's motion for a new trial also highlights several other problematic issues with the trial, including:
- The jury was permitted to hear unreliable and unsubstantiated evidence from three HouseCanary "experts," one expert's testimony being so far-fetched that the Judge remarked that it was speculative.
- There is not sufficient evidence to support liability in this case. HouseCanary's trade secrets never existed in the first place based on multiple whistleblowers' testimony. It would be quite difficult for Amrock to acquire trade secrets that never existed.
"When you look at the sheer number of problems with this case, paired with the fact that multiple former HouseCanary executives have come forward to blow the whistle on fraud, this is something that should get the court's attention," said David Prichard of San Antonio law firm Prichard Young, LLP. "Our legal system is designed to allow judges to act as a backstop when they see questionable activities taking place. This motion for a new trial is an opportunity for the court to step in and ensure that justice is served now that all the cards are on the table."
Amrock Inc. is the nation's largest independent provider of title insurance, valuations and settlement services. The company is a preferred provider to nine of the top 10 mortgage lenders and delivers innovative solutions to streamline the real estate and mortgage financing experience for lenders, property owners, and real estate professionals nationwide.
Contact: Ed Patru, 202-360-7063, email@example.com