William Hogarty, 49, declared bankruptcy in 2011, which blocked him from being added to the lawsuit, which was filed by former clients who say he and the company's employees defrauded them. Hogarty ran OF Lending, claiming the company could do short-pay refinancing to help people who owed more than their houses were worth. OF Lending went out of business in January 2011, but not before dozens of people put up money in last-ditch attempts to keep their homes.
"He's been added to the case," said Pleasanton attorney J.R. Richards. "We're seeking damages against him personally for liability, for fraud and misrepresentations he made to his clients."
Richards said the lawsuit asks for $90,000, but that the court could also award up to three times that in penalties.
Hogarty, the founder and CEO of OF Lending, and his employees promised to work with banks to reduce mortgages and lower monthly payments, according to the lawsuit. Instead, the lawsuit says, Hogarty and his employees pressured potential clients into putting up money, then did little or nothing.
His bankruptcy filing was denied by mutual agreement after prosecutors discovered Hogarty had failed to disclose accounts at 16 banks and financial interest in five companies, two homes and property, including a 97-foot yacht, U.S. Bankruptcy Court documents show.
On his website, Hogarty said he bought the yacht in 2006 and owned it for five years.
"We were sad to see her go yet with a career change we had to bring our overhead down," he said on the website.
Court documents say Hogarty earned $2 million over the course of two years, but instead reported to the Internal Revenue Service and the bankruptcy court that he lost $160,000 in income in 2010 and filed a tax return in 2009 -- when he made $1.4 million -- claiming that he'd earned $337,975.
Hogarty refutes the documents from bankruptcy court, saying the attorney in the case, Maggie McGee, didn't know the difference between gross income and net income.
"Between 2009 and 2011, my income was $200,000," Hogarty said, blaming McGee for a vendetta against him.
"The accusations she had were horrific," he said.
He also said the IRS has cleared him of any wrongdoing.
"I went through an exhaustive IRS audit," Hogarty said. "The IRS found me in full compliance with the law."
In January 2010, Hogarty appeared on a Bay Area television show, "View from the Bay," where he touted his company, saying he'd saved one woman $370,000 by doing a short-pay refinance. On the show, Hogarty advised people to never submit false or untruthful information.
"The truth is always best," he told the show's hosts.
Court documents show Hogarty, under penalty of perjury, testified and provided documents that left out information about his earning and property.
At a bankruptcy hearing with creditors in February 2011, Hogarty testified under oath that he owned no interest in the home he was living in at the time, a 12,978-square-foot mansion, with eight bedrooms, a 12-car garage and swimming pool.
Hogarty also testified in the February 2011 hearing that he'd had no bank accounts for "two or three months," and that he had no money, although one creditor pointed out that Hogarty and his wife had taken a vacation to Cabo San Lucas in Mexico two weeks before the bankruptcy hearing.
He said any vacation he took during that time was paid for by a family member.
"I think there's a big rumor out there that I have a big bag of money," Hogarty said. "There's no money."
He apparently avoided a perjury charge by agreeing to the facts laid out in the case, but by doing so, he opened himself up to the lawsuit.
Twenty-two people have claims under the lawsuit that now includes Hogarty. Virtually every employee of the company was named in the suit, including both Hogarty's wife, Christy, and his ex-wife, Micaelanne Hogarty -- along with James Riviera, Tiffany Carr and Gregory Lomba. It alleges clients paid upfront fees ranging from $1,200 to $12,000, for the company's short-pay refinancing services.
"None of these clients were my clients. They were all agents' clients," Hogarty said, adding that Riviera was responsible. "He was the man behind 80% of the problems. I paid dearly for that."
He said his personal clients tell a different story, with 100 approvals from banks for short-pay refinancing.
At the time of the 2011 hearing, at least three people had won judgments against Hogarty, totaling more than $22,000.
He said he had a "very clear six-page contract with these people. Unfortunately, some people want to claim the victim, (saying) 'Oh, I don't know what I signed.' ... the contract was crystal clear."
And Hogarty said he tried to pay people back.
"I had given over $440,000 in refunds over 2009 and 2010," he said. "The first contract has a trust fund clause. I paid all those clients back their money."
William Tubman, the former attorney handling the lawsuit, said some of the banks OF Lending worked with called the company's efforts "amateurish." He said those lenders went for months without hearing back from OF Lending, which often didn't return calls.
No court date for the lawsuit has been set.
Hogerty said the entire incident began with an accusation from a mentally ill person who had a grudge against him.
The former CEO is also due in court later this month on an attempted murder charge stemming from an incident last year in which a roommate at the mansion claimed Hogarty attacked him and tried to choke him to death.
Hogarty, who won the 2005 Mr. California Bodybuilding Championship, faces criminal charges stemming from a July 3 altercation with his roommate, John Robinson.
The Livermore mansion where Hogarty and his wife Christy lived was touted as Northern California's answer to the Playboy mansion and was the scene of risqué parties, such as the Fallen Angels Lingerie Party and Mardi Gras at the Mansion.
"The parties, I had full compliance on," Hogarty said, pointing out he had an ABC license.
"The only reason I was doing the parties in the first place was to support my family .... Overall, I had one goal, to make sure my parents were taken care of," he said. "I wish these people would take a deep breath and focus on something other than me."
Hogarty now works for his father at Integrity Auto Sales and Service in Livermore, along with selling cars on Craigslist.