Nations Lending is accusing two of its former branch managers and their current employer, CMG Financial, of trade secrets theft and poaching.
According to a lawsuit filed in a federal court in Ohio, two branch managers, with assistance from CMG Financial staff, diverted business from their former employer while still employed by Nations Lending.
When they officially terminated employment and left to CMG in June 2024, eight other loan officers followed suit, Nations Lending claims.
The two managers, Mina Galab and Eric Estevez, were allegedly diverting Nations Lending’s business contracts and business relationships to CMG “in exchange for an employment contract with CMG Mortgage or otherwise personal gain,” the suit alleges.
By doing so, the branch managers violated their non-solicitation and unfair competition agreements, Nations Lending purports. It is asking the court to grant a preliminary injunction to prevent the future solicitation of its customers and employees.
CMG Financial, though declining to comment, said it “takes compliance and ethical business practices seriously.”
“While we cannot comment on pending litigation, we can confirm that CMG operates with integrity and in full accordance with industry regulations,” a spokesman said Thursday.
Talks between the two branch managers and CMG Financial allegedly began in May 2024 and one month later they made the move to their new employer. As of Jan. 30, both managers are registered with CMG, per the Nationwide Multistate Licensing System.
Galab, who was at Nations Lending from 2022 to 2024, and Estevez, who had a four-year stint at his previous employer, during and after their employment “solicited and diverted Nations Lending’s employees and customers to their new employer in violation of their restrictive covenants,” the litigation filed Jan. 14 claims.
“When Galab and Estevez terminated their employment with Nations Lending, Nations Lending’s customers also terminated their contracts or business relationships with Nations Lending and thereafter formed contracts and business relationships with CMG Mortgage,” the complaint said.
The lawsuit does not name CMG Financial employees who allegedly helped “facilitate, process, fund, and close loans” for borrowers diverted from Nations Lending. The employees are identified as “John Does 1-3” in the suit.
Nations also claims that CMG had “full knowledge of the facts” and “conducted itself in a way which manifests an intention to approve Galab, Estevez, and John Does 1-3’s earlier acts which did not bind CMG Mortgage.”
California-based CMG currently has 1,982 sponsored loan officers, according to the Nationwide Mortgage Licensing System. It generated a total volume of approximately $18 billion in 2022, per the Scotsman Guide.
For comparison, Nations Lending sponsors 279 LOs and originated $3 billion worth of loans in 2022.
Nations Lending is not the only lender accusing CMG Financial of trade secrets theft and diverting employees.Earlier last year A and N Mortgage Services sued CMG for stealing its trade secrets, including a proprietary loan program for asylum seekers.
The complaint filed in July in an Illinois federal court claims the information a loan originator and processor stole is worth over $1 million.
