A veteran Sacramento mortgage banker who has been lobbying Congress to pass the $700 billion bailout has been accused of defrauding 11 of his former branch managers and embezzling $879,000 from them in the collapse of his Folsom mortgage brokerage in 2007.

The allegations against John A. Courson, owner of the defunct Folsom-based Central Pacific Mortgage Co., are described in a civil lawsuit filed last year by eight of Central Pacific's former branch managers in California, two in Maryland and one in Florida.

Courson, 66, is chief operating officer of the Mortgage Bankers Association of America in Washington, D.C. The industry group's members include 2,400 companies and 370,000 people from the real estate finance world: mortgage companies and brokers, banks, thrifts and insurance companies.

As chief operating officer, Courson is the leader – and public voice – for the association, which spent $2.2 million and employed nine lobbyists in Washington during the first six months of 2008, federal lobbying filings show.

Last week, Courson sent letters to House and Senate members urging them to support quick passage of legislation that would enable the Treasury to purchase billions in distressed mortgage-related assets from companies in the mortgage finance world.

Courson also issued a widely quoted statement urging legislators to stop bickering.

"We would encourage both parties and both chambers to set aside the issues that will only bog down the process and pass a clean bill that will stabilize the markets and help keep families in their homes without permanently damaging the real estate finance system."

Courson, a resident of Rancho Murieta, was named chief operating officer July 22. He is scheduled to become MBA president in January.

Interview requests rejected

Through a spokeswoman, he declined a request to be interviewed about the embezzlement and fraud allegations.

"John has decided we're not doing interviews on this particular topic," MBA spokeswoman Cheryl Crispen said.

Asked if the association was aware of fraud and embezzlement allegations against Courson when it hired him, Kieran Quinn, chairman of the board of the Mortgage Bankers Association, issued a written statement.

"John was very forthcoming about all the details surrounding the closing of Central Pacific Mortgage," Quinn's statement says. "John is an experienced, unwavering and respected leader who will guide MBA and the industry through these challenging times."

In court documents, Courson has denied wrongdoing in several civil court cases filed against him after Central Pacific's collapse on Feb. 26, 2007, including the fraud and embezzlement allegations that his former branch managers have leveled against him.

Fresno lawyers Jeff Reich and Shane Reich, who represent the former Central Pacific branch managers, did not return calls seeking comment.

The former branch managers allege that Courson, former executive vice president John Cassell and former chief financial officer Ed Fuchs violated civil provisions of the Racketeer Influenced and Corrupt Organizations Act, or RICO, by scheming to defraud his branch managers using interstate phones, faxes, Internet and mail.

The plaintiffs in the case, now before the U.S. District Court for Eastern California, include former Central Pacific branch managers from San Diego, Kern County, Santa Rosa, Eureka, Visalia and Florida.

Fuchs, a Fair Oaks resident, declined to comment, citing the pending lawsuit. Cassell, a Rancho Murieta resident, said: "I wish I could respond, but we'll let the court filings speak for themselves."

Mark Van Brussel, an attorney representing Courson and his two other former executives, is on vacation and unavailable to comment, said Kristina Launey, a second attorney working on the case, who also said she was not authorized to comment.

Lehman Brothers litigation

Last year, Courson also was accused of a $1.6 million civil fraud by Lehman Brothers Bank of New York, the giant Wall Street investment bank that filed for bankruptcy protection two weeks ago.

Call The Bee's Andrew McIntosh at (916) 321-1215.