7 Arrested in $6.2M Loan Modification Scam

Allison Tussey —  February 27, 2014 — 2 Comments

Seven suspects who have been charged in a mortgage fraud scheme that defrauded more than 1,550 Inland Valley, California, homeowners seeking loan modification services during the foreclosure crisis have been arrested.

The felony complaint alleges that Nehad “Nick” Ayyoub Ayyoub, 57, San Bernardino, California, and president of The Firm Loans, Insurance and Investments Inc. and First Choice Debt Solutions Inc., along with his six colleagues, Ghydan Ayyoub Rabadi, 38, Los Angeles, California, Zaid Rabadi, 49, Los Angeles, James Clemons, 55, Riverside County, California, Wissam Ismail, 32, Riverside County, Eddie Mercado, 57, San Bernardino, and Majid Safaie, 60, Orange County, California, deceived homeowners by illegally charging up-front payments for loan modification services and lying about the services they provided.

The suspects are charged in a 24 count complaint of felony grand theft, personal and corporate income tax evasion and conspiracy. The suspects were booked at Murrieta Detention Center, Orange County Jail, Rancho Cucamonga Jail and Azusa Police Department. Ayyoub is being held with bail set at $75,000 and all others are being held with bail set at $50,000. Ayyoub is facing a maximum exposure of 12 years in prison while his colleagues are facing a maximum exposure of 8 years.

According to court filings, Ayyoub and his colleagues took advantage of homeowners who were desperate to lower their mortgage payments by selling them home loan modification services and requiring payment of up-front fees. Homeowners were falsely told that attorneys would be negotiating their loan modifications, that they would get a loan modification with no risk of failure, that they would receive a refund if they were dissatisfied and that the suspects had special contacts with lenders, which would give them an advantage in obtaining lowered monthly payments.

Homeowners were instructed to stop paying their mortgage and to instead give the money to Ayyoub and his colleagues to ensure that they would obtain a loan modification, causing many victims to default on their home loans without obtaining a modification, according to court filings.

The suspects operated this scam from January 2007 to March 2010, according to court filings.

Attorney General Kamala D. Harris announced the arrests.

Attorney General Harris’ Mortgage Fraud Strike Force began investigating this case in 2010 yet business records were immediately sealed until September 2012 when Safaie’s claim of attorney client privilege was overruled.

Agents with the California Attorney General’s Bureau of Investigations were assisted by investigators with the State Franchise Tax Board.

Created in May 2011 by Attorney General Harris, the Mortgage Fraud Strike Force continues to lead the charge in investigating and prosecuting misconduct at all stages of the mortgage process

“These individuals profited from the fear and desperation of hard working Californians who were simply fighting to keep their homes during the height of our state’s foreclosure crisis,” Attorney General Harris said. “This kind of predatory activity is reprehensible.”

Be Sociable, Share!

Allison Tussey

Posts Google+

2 responses to 7 Arrested in $6.2M Loan Modification Scam

  1. Sounds very one sided, I’m sure there is much more to the story. So many people in over their heads wanting to blame someone, in all actuality they never could afford the loans they signed up for. The banks were given taxpayer money and failed homeowners which is why there are lawsuits against them, but you certainly won’t see any of them going to jail!

  2. Sandy Thigpen July 14, 2014 at 7:07 pm

    We were one of the many victims in this case. We paid the highest fee charged by The Firm, a.k.a. Mod By Lawyers, of $10,000.00.
    We were first victimized by a mortgage company selling us one of the first round of predatory loans. The loan was first domino in a devasting cascade of events that lead to us hiring The Firm to desperately try to save our family home of 24 years. We then hired an attorney to pursue charges against this company and because they closed The Firm and opened a new company and corporation, they were able to legally side step the process of being held responsible for their actions. First the loss of home, no way to pursue the predatory loan company, then hiring a company that was defrauding families that were in a desperate fight to keep family homes, finally paying an attorney, all these efforts in vain. Financially devastated, our family home gone and emotionally distraught, my husband and I separated under the strain. Blaming each other for these catastrophic losses. Please let me know if there are any other options available to us to try and recoup any of our losses. I have heard of a state program called the Corporate Fraud Fund but I’m not sure we meet the criteria to apply. I can’t begin to explain the feeling of loss and devastation, not to mention the lack of options for recourse to try to get financial compensation for this nightmarish level of victimization.
    Sincerely,
    Sandy Thigpen

Leave a Reply

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong> 

*