Archives For California

Domonic McCarns, 41, Irvine, California, was sentenced to 14 years in prison by U.S. District Judge Kimberly J. Mueller for conspiracy to commit mail fraud for his participation in a nationwide foreclosure-rescue scam, Acting U.S. Attorney Phillip A. Talbert announced.

McCarns is the final defendant to be sentenced for a pair of schemes that lured homeowners with the promise to help them avoid foreclosure and repair their credit. Two indictments were brought in 2008. Four defendants were convicted after two jury trials, 13 defendants pleaded guilty, and now, all 17 defendants have been sentenced. On September 9, 2013, Charles Head was sentenced to 35 years in prison, and on October 29, 2014, his brother and fellow leader in the scheme Jeremy Michael Head was sentenced to 10 years in prison.

According to court documents, the defendants solicited homeowners facing foreclosure, and through misrepresentations, fraud, and forgery, substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants, or were solicited on the internet. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.

Initially, the scam focused on distressed homeowners in California before expanding throughout the United States. In the course of the schemes, between January 2004 and June 2006, the defendants obtained over $90 million in fraudulent loans, caused estimated losses of over $50 million, and stole title to over 300 homes.

On December 2, 2013, McCarns was convicted after a five-week trial along with Charles Head, 36, Pittsburgh, Pennsylvania, (formerly of Los Angeles); and Benjamin Budoff, 49, Colorado Springs, Colorado. Head had been previously convicted in a trial in a nearly four-week trial in May 2013 with his brother Jeremy Michael Head, 34, Huntington Beach, California.

The case was the product of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Michael D. Anderson and Matthew Morris prosecuted the case.

Fourteen other defendants have been sentenced:

Elham Assadi, 39, Irvine, California, sentenced to 5 years’ probation with 6 months of home detention;

Leonard Bernot, 50, Laguna Hills, California, sentenced to 18 months in prison;

Akemi Bottari, 36, Los Angeles, California, sentenced to 3 years’ probation with 6 months of home detention;

Keith Brotemarkle, 51, Johnstown, Pennsylvania, sentenced to 5 years, 10 months in prison;

Benjamin Budoff, 49, Colorado Springs, Colorado. sentenced to 4 years in prison;

Joshua Coffman, 37, North Hollywood, California, sentenced to 20 months in prison;

John Corcoran, 61, Anaheim, California, sentenced to 4.5 years in prison;

Sarah Mattson, 33, Phoenix, Arizona, sentenced to 3 years’ probation with 3 months of home detention;

Omar Sandoval, 36, Rancho Cucamonga, California, sentenced to 4 years and 10 months in prison;

Xochitl Sandoval, 37, Rancho Cucamonga, California, sentenced to 8 months in prison;

Lisa Vang, 31, Westminster, California, sentenced to 3 years’ probation;

Andrew Vu, 38, Santa Ana, California, sentenced to 6 months in prison with 6 months of home detention;

Justin Wiley, 37, Irvine, California, sentenced to 18 months in prison, and

Kou Yang, 40, Corona, California, sentenced to 4 years in prison.

Acting U.S. Attorney Phillip A. Talbert said, in announcing the sentence: ‘This scheme purposely targeted the financially vulnerable during their time of greatest distress with promises of help. The defendants tricked the victims into handing over their most valuable assets, their homes. Few economic crimes are more reprehensible. This final sentence in this case will bring some measure of justice for their victims.”

In large fraud schemes like the one devised by Charles Head, we can’t forget about the individual homeowners who comprised the millions of dollars in losses,” said Monica M. Miller, Special Agent in Charge of the Sacramento division of the FBI. “Today’s sentencing ends an investigation that has been ongoing for more than 10 years and brings some closure to the innocent people who were victimized by Head’s callous scheme.”

Dominic McCarns and his co-conspirators assured innocent homeowners across the country facing foreclosure that they could turnaround their misfortunes and keep their homes,” said Michael T. Batdorf, Special Agent in Charge, IRS-Criminal Investigation. “However the defendants had other plans which resulted in one of the most harmful mortgage fraud schemes in the country. The sentence handed down today by the court is befitting of this defendant and his actions.”

Mehdi Moarefian, also known as “Michael Miller,” 37, Irvine, California, was sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport, Connecticut, to 52 months of imprisonment, followed by three years of supervised release, for participating in an extensive mortgage loan modification scheme. Moarefian also was ordered to pay restitution in the amount of $2,390,496.59.

According to court documents and statements made in court, Aria Maleki, Moarefian and others jointly operated a series of California-based companies that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees. The defendants did business, at various times, as “First Choice Financial Group, Inc.,” “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” “Nation Star Financial,” and “Nation Star Fin Group.”

Maleki presided over the entire structure of this scheme, and Moarefian was a senior member of the sales team. Acting as representatives of the above-named entities, Moarefian and other co-conspirators cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services. To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request. Few homeowners ever received any type of mortgage loan modification through the defendants’ companies, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

The investigation revealed that the top tier of salesmen, including Moarefian, were paid based on commission and typically earned 45 percent to 50 percent of the final fee, after $750 to $1,000 was taken by Maleki for administrative costs.

On January 21, 2016, a grand jury in New Haven, Connecticut returned an indictment charging Maleki, Moarefian and five other California residents with conspiracy and fraud offenses related to this scheme. The defendants were arrested on January 26, 2016.

On February 17, 2016, Moarefian pleaded guilty to one count of conspiracy to commit mail and wire fraud.

Maleki pleaded guilty to the same charge and, on July 18, 2016, was sentenced to 112 months of imprisonment. He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

Deirdre M. Daly, United States Attorney for the District of Connecticut, made the announcement. The matter was by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.

Serj Geutssoyan, also known as “Anthony Kirk,” 34, Santa Ana, California was sentenced to 52 months of imprisonment, and Daniel Shiau, also known as “Scott Decker,” 30, Irvine, California, was sentenced to 58 months of imprisonment for their role in an extensive mortgage loan modification scheme. Geutssoyan and Shiau also were ordered to serve three years of supervised release and pay restitution in the amount of $2,390,496.59.

According to court documents and statements made in court, Aria Maleki, Geutssoyan, Shiau and others jointly operated a series of California-based companies that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees. The defendants did business, at various times, as “First Choice Financial Group, Inc.,” “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” “Nation Star Financial,” and “Nation Star Fin Group.”

Maleki presided over the entire structure of this scheme, and Geutssoyan and Shiau were senior members of the sales team. Acting as representatives of the above-named entities, Geutssoyan, Shiau and other co-conspirators cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services. To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request. Few homeowners ever received any type of mortgage loan modification through the defendants’ companies, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

The investigation revealed that the top tier of salesmen, including Geutssoyan and Shiau, were paid based on commission and typically earned 45 percent to 50 percent of the final fee, after $750 to $1,000 was taken by Maleki for administrative costs.

On January 21, 2016, a grand jury in New Haven returned an indictment charging Maleki, Geutssoyan, Shiau and four other California residents with conspiracy and fraud offenses related to this scheme. The defendants were arrested on January 26, 2016.

Maleki, Geutssoyan and Shiau each pleaded guilty to one count of conspiracy to commit mail and wire fraud.

On July 18, 2016, Maleki was sentenced to 112 months of imprisonment. He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

The other four defendants also have pleaded guilty and await sentencing.

The announcement was made by Deirdre M. Daly, United States Attorney for the District of Connecticut. The sentencing judge was U.S. District Judge Stefan R. Underhill. The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry. The matter is being investigated by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

 

Bryan D’Antonio, 50, Brea, California, pled guilty one count of conspiracy to commit mail and wire fraud related to his role as the owner and operator of a multi-million dollar fraudulent mortgage modification scheme that posed as a successful law firm to defraud struggling homeowners.  D’Antonio was the owner and operator of Rodis Law Group (RLG) and America’s Law Group (ALG).

D’Antonio pleaded guilty before United States District Judge David O. Carter, who is scheduled to sentence the defendant on January 30, 2017.

D’Antonio admitted that, between October 2008 and June 2009, he participated in a scheme that induced homeowners to pay as much as $5,500 for the services of RLG and its successor entity, ALG. RLG and ALG advertised on radio stations across the country and urging struggling homeowners to call a toll-free number. The companies purportedly consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.”

In fact, RLG and ALG were telemarketing operations that never had teams of experienced attorneys. During much of the scheme, one man – co-defendant Ronald Rodis – was the only attorney at RLG.

In a plea agreement filed in federal court, D’Antonio admitted that the RLG and ALG schemes fraudulently obtained approximately $9 million from more than 1,500 victims.

D’Antonio was previously convicted of mail and wire fraud and sentenced to four years in federal prison for his participation in a medical billing scheme. He was also subject to a permanent injunction prohibiting him from having any involvement with any business that engaged in telemarketing or misrepresented the services it would provide.  In conjunction with his guilty plea in this case, D’Antonio admitted that he started RLG while he was still on supervised release from his prior conviction. In violation of D’Antonio’s permanent injunction, RLG and ALG sold their services through an extensive telemarketing operation and employees routinely misrepresented the services RLG and ALG would provide. The telemarketers did not disclose to homeowners that RLG and ALG were owned and operated by D’Antonio, who was prohibited from engaging in telemarketing

RLG and ALG telemarketers working for D’Antonio made numerous misrepresentations regarding the companies’ ability to negotiate loan modifications from the homeowners’ mortgage lenders. For example, the telemarketers stated that RLG and ALG had been in business for 11 years when in fact the company had only opened in October 2008. They falsely stated that RLG and ALG routinely obtained positive results for homeowners, including lower monthly payments, reductions in principal balance and lower interest rates. In fact, positive results were rarely achieved for any RLG or ALG clients. Telemarketers also falsely reiterated that homeowners would have a team of attorneys and real estate professionals assigned to their case.

D’Antonio’s co-defendants, Charles Wayne Farris and Ronald Rodis, both previously pleaded guilty to one count of conspiracy to commit mail and wire fraud.

D’Antonio preyed on vulnerable victims – struggling homeowners,” said United States Attorney Eileen M. Decker. “Pretending to offer legal assistance to their victims, D’Antonio and his cohorts actually offered nothing but false hopes and empty promises.  Now, he will be held accountable in federal court for the damage he has caused so many victims.”

At the height of the mortgage crisis, this defendant, a convicted felon who was prohibited from any business engaged in telemarketing, created two fake law firms that promised struggling homeowners assistance saving their homes and modifying their mortgages,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Despite the many promises, these were telemarketing sales operations that took homeowners’ money and provided no meaningful assistance.”

The case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Joseph T. McNally and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch.

Alla Samchuk, 45, Roseville, California, was found guilty in a mortgage fraud scheme involving three properties after a four day jury trial in Sacramento, California.  Samchuk was convicted of six counts of bank fraud, six counts of making a false statement to a financial institution, one count of money laundering, and one count of aggravated identity theft. After the verdict, U.S. District Court Judge Garland E. Burrell Jr. ordered Samchuk taken into custody.

According to court documents, from 2006 through 2008, Samchuk, a licensed real estate salesperson, orchestrated a mortgage fraud scheme involving three properties in the Sacramento area using straw buyers. Two of the houses were purchased so that Samchuk herself could occupy them. She lacked the ability to qualify for a loan, so she instead recruited straw buyers to apply for the loans in their names. Samchuk caused the submission of loan applications containing false representations of income, employment, assets, and a false indication that the straw buyers would occupy the homes as their primary residence.

A second objective of the scheme was to obtain HELOC (home equity line of credit) funds. According to evidence at trial, on two of the properties, Samchuk diverted or attempted to divert HELOC funds to her own benefit. Samchuk caused the HELOC loans to fund by submitting false statements and documents to the lender regarding the qualifications of the straw buyers.

The scheme involved two properties in Roseville, California and one in El Dorado Hills, California. In 2007, Samchuk filed an application for a HELOC on one of the properties without the straw buyer’s knowledge or consent. To obtain the HELOC, she forged the signature of the straw buyer on a short form deed of trust that she caused to be notarized and recorded. The stated purpose of the HELOC was home improvement, but once the line of credit was funded, Samchuk quickly diverted all of the funds to her own use, spending the proceeds on a Lexus and the repayment of a substantial personal debt.

Sentencing is set for October 21, 2016. Samchuk faces a maximum of 30 years in prison for each count of bank fraud and false statements to a financial institution, 10 years in prison for money laundering, and two years in prison for aggravated identity theft.

The verdict was announced by Acting U.S. Attorney Phillip A. Talbert. This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Audrey B. Hemesath and Andre M. Espinosa are prosecuting the case.

Aria Maleki, 33, Santa Ana, California, was sentenced to 112 months of imprisonment, followed by three years of supervised release, for heading a mortgage loan modification scheme that defrauded more than 1,000 struggling homeowners across the United States.

According to court documents and statements made in court, Maleki and others jointly operated a series of California-based companies that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees.  The defendants did business, at various times, as “First Choice Financial Group, Inc.,”  “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” “Nation Star Financial,” and “Nation Star Fin Group.”

Acting as representatives of these entities, Maleki and his co-conspirators cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans.  The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services.  To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been pre-approved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request.  Few homeowners ever received any type of mortgage loan modification through the defendants’ companies, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection.  The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.

Maleki presided over the entire structure of this scheme.  As a result, more than 1,000 homeowners suffered losses totaling more than $3 million.

On January 21, 2016, a grand jury in New Haven, Connecticut returned an indictment charging Maleki and six other California residents with conspiracy and fraud offenses related to this scheme.  The defendants were arrested on January 26, 2016.

On March 22, 2016, Maleki pleaded guilty to one count of conspiracy to commit mail and wire fraud.  The other six defendants also pleaded guilty and await sentencing.

Maleki has forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

Maleki was sentenced by U.S. District Judge Stefan R. Underhill who stated that a restitution order will be entered at a later date.

This defendant presided over a scheme that preyed on struggling homeowners in Connecticut and across the United States, falsely offering mortgage relief in exchange for thousands of dollars that the victims clearly could not afford to spend,” said Deirdre M. Daly, U.S. Attorney for the District of Connecticut.  “The investigation revealed that the participants in this scheme specifically targeted homeowners who were behind on their mortgage payments, whose homes were ‘under water,’ or who had recently experienced a financial hardship, such as a lost job.  This is an appropriate sentence for a defendant who profited handsomely from such heartless, criminal conduct.  I thank our federal and state law enforcement partners in New England, New Jersey, California and Oklahoma for investigating this matter, shutting down this scam and bringing those responsible to justice.”

This sentence should serve as a strong warning about the consequences awaiting those engaged in large-scale financial fraud,” said Terence Opiola, Special Agent in Charge of Homeland Security Investigations (HSI) in Newark.  “The organization identified in this case was responsible for harming countless innocent victims.  Working with its enforcement partners, HSI will continue to aggressively target thieves to ensure the perpetrators face the full weight of the law.”

Aria Maleki took advantage of the national mortgage crisis,” said Shelly A. Binkowski, Postal Inspector in Charge for the Boston Division of the U.S. Postal Inspection Service.  “This sentencing clearly demonstrates that those who target hardworking homeowners in today’s challenging economy will be held accountable and prosecutedThese arrests clearly demonstrate that those who target hardworking homeowners in today’s challenging economy will be held accountable.   I commend the hard work and countless hours put forth by all of the law enforcement agencies involved in this investigation.  The U.S. Postal Inspection Service will continue to investigate these crimes to protect consumers and our nation’s mail system from being used for illegal or dangerous purposes.”

Aria Maleki stole millions by lying that his companies had ties to HAMP and could offer relief to homeowners struggling to avoid foreclosure,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program.  “Every single victim was left worse off; many lost thousands of dollars and some, after promised modifications failed to materialize, lost their homes.  Homeowners should be wary of any business charging up-front fees, advertising pre-approval at rates more favorable than industry norms, or offering money-back guarantees.”

Mr. Maleki, along with his opportunistic criminal cohorts, facilitated a scheme to unjustly enrich themselves through the victimization of hardworking and vulnerable homeowners,” said Christina Scaringi, Special Agent in Charge, HUD OIG, Northeast Region.  “The sentencing today is a testament to the unwavering dedication exhibited by law enforcement and the U.S. Attorney’s Office to ensure a swift dose of justice awaits anyone who engages in this kind of unforgivable deception to our homeowners, HUD’s Federal Housing Administration, and mortgage lending institutions.  I applaud and commend the hard work and long hours put forth by our law enforcement partners.”

Aria Maleki deceived and preyed upon innocent homeowners when they were already vulnerable and simply trying to hang on to their homes,” said Leslie DeMarco, Special Agent in Charge, Western Region, Federal Housing Finance Agency – Office of Inspector General.  “These despicable schemes victimize homeowners and entire communities, and today Maleki was held accountable for his actions.  We are proud to work with our law enforcement partners on this case, and will continue to work with them to bring to justice all individuals who attempt to defraud unwitting victims.”

Mr. Maleki’s fate, based on his involvement in financial fraud, has been sealed by the court,” said Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation.  “We in Connecticut are very thankful of the incredible work done on this case by law enforcement from across the country.”

This matter is being investigated by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.

Jacob Orona, Aide Orona, John Contreras, Prakashumar (“Kash”) Bhakta, Marcus Robinson, and David Boyd were indicted by a grand jury on 135 felony charges for operating a mortgage fraud scheme throughout Southern California and the Inland Empire, preying on homeowners facing foreclosure.  Charges include conspiracy, grand theft, filing false or forged documents, and identity theft.

The scam artists promised homeowners who were underwater on their mortgages that they could provide legal remedies to avoid foreclosure, convincing homeowners to stop making mortgage payments and instead pay them $3,500 to start with an “administrative process,” plus $1,000 every month and separate amounts to allegedly file legal documents.  The defendants filed bogus petitions and court pleadings and recorded false deeds in county recorders’ offices, causing over $4 million in loses while failing to halt any foreclosures.  The fraud stretched through San Diego, Riverside, San Bernardino, and Los Angeles counties of California.

The indictment was delivered following a two-week special statewide grand jury convened in San Diego County.  If convicted, Jacob and Aide Orona face over 90 years in prison; Contreras and Prakashkumar face over 70 years in prison; Robinson faces over 28 years in prison, and Boyd faces over 18 years in prison.

The indictment was announced by Attorney General Kamala D. Harris.  The arrests and arraignments are the culmination of a joint investigation by the Federal Housing Finance Agency Office of the Inspector General (FHFAOIG), the Attorney General’s Financial Fraud and Special Prosecutions Section (FFSPS), the California Department of Justice Bureau of Investigation, and the Stanislaus County District Attorney’s Office, Real Estate Fraud Unit.

I created the Mortgage Fraud Task Force in 2011 to ensure that we tirelessly protect Californians struggling to stay in their homes from those who would prey upon them for profit.  This indictment is result of a joint effort to remain vigilant in the investigation and prosecution of those who attempt to defraud homeowners through the mortgage process,” said Attorney General Harris. “I thank our Mortgage Fraud Strike Force and California Department of Justice Special Agents, as well as our local, state, and federal law enforcement partners, for their efforts on this case.”

 

Charles Wayne Farris, 55, Aliso Viejo, California, pleaded guilty before U.S. District Court Judge David O. Carter for the Central District of California to one count of conspiracy to commit mail and wire fraud in connection with his role as the sales manager of a multi-million dollar fraudulent mortgage modification scheme.

Farris admitted that, between October 2008 and June 2009, he participated in a scheme to induce homeowners to pay between $3,500 and $5,500 for the services of the Rodis Law Group (RLG) and a successor entity, America’s Law Group (ALG).  RLG and ALG advertised on radio stations nationwide, urging struggling homeowners to call a toll-free number and stating that the companies consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.”  In fact, RLG and ALG were telemarketing operations that never had teams of experienced attorneys.  During much of the scheme, Ronald Rodis was the only attorney at RLG.

Farris supervised a sales force of dozens of telemarketers who fielded calls from struggling homeowners.  At Farris’s direction and using scripts that he created, the telemarketers made numerous misrepresentations regarding the companies’ ability to negotiate loan modifications from the homeowners’ mortgage lenders.  For example, the telemarketers stated that RLG and ALG had been in business for 11 years when in fact the company had only opened in October 2008.  They falsely stated that RLG and ALG routinely obtained positive results for homeowners, including lower monthly payments, reductions in principal balance and lower interest rates.  In fact, positive results were rarely achieved for any RLG or ALG clients.  Telemarketers also falsely reiterated that homeowners would have a team of attorneys and real estate professionals assigned to their case.

In a plea agreement filed in federal court, Farris admitted that the RLG and ALG schemes fraudulently obtained approximately $9 million from more than 1,500 victims. His sentencing is on April 17, 2017.

This defendant managed an entire team of people whose sole job was to lure struggling home owners into the fraud scheme,” said U.S. Attorney Eileen Decker of the Central District of California. “It is because of Mr. Farris that so many people were victimized for so much money.”

This defendant supervised dozens of telemarketers who used lies and false promises to take money from struggling homeowners for a worthless service,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to prosecute all kinds of mass-marketing and telemarketing fraud schemes, especially those that prey on vulnerable victims.”

The defendants in this case preyed upon vulnerable homeowners facing the loss of their home and callously took advantage of what hope they had left,” said Assistant Director in Charge Deirdre L. Fike of the FBI’s Los Angeles Field Office. “Paid advertisements can lend a veneer of credibility to any scam, and I would encourage anyone considering paying fees up front for services to be skeptical before handing over hard earned money.”

Farris was charged along with two co-defendants, Bryan D’Antonio and Ronald RodisRodis pleaded guilty to one count of conspiracy to commit mail and wire fraud on June 27, 2016.  D’Antonio is charged with 23 felony counts.  He is charged with nine counts of wire fraud and one count of conspiracy to commit wire fraud.  Each of these counts carries a statutory maximum penalty of 20 years in prison.  In addition, D’Antonio is charged with 13 counts of criminal contempt for violating a 2001 federal court order, which permanently banned D’Antonio from participating in future telemarketing operations.  Criminal contempt of court has no statutory maximum penalty.  D’Antonio is scheduled for trial beginning September. 20, 2016.

This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Joseph T. McNally of the Central District of California and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch.

 

The Federal Trade Commission filed civil complaint alleging that the operators of a mortgage relief scam bilked millions of dollars from homeowners by falsely telling them they could join a so-called “mass joinder” lawsuit that would save them from foreclosure and provide additional financial awards.  The defendants are Damian Kutzner; Vito Torchia, Jr.; Jonathan Tarkowski; R. Geoffrey Broderick; Charles T. Marshall; Brookstone Law P.C., doing business as Brookstone Law Group, a California corporation; Brookstone Law P.C., doing business as Brookstone Law Group, a Nevada corporation; Advantis Law P.C.; and Advantis Law Group P.C. They are alleged to have violated the FTC Act and the FTC’s Mortgage Assistance Relief Services Rule (MARS Rule) and Regulation O.

According to the FTC’s complaint, Damian Kutzner and four attorneys using a set of law firms under the names Brookstone Law and Advantis Law, claimed they would bring lawsuits against lenders for mortgage fraud and void consumers’ mortgage notes “to give you your home free and clear, and/or to award you relief and monetary damages.”

According to the FTC, the promise of a mass joinder lawsuit is a ruse used by some mortgage relief scams. Unlike class-action lawsuits, in the event of trial each plaintiff would have to prove his or her case separately. Although the defendant attorneys have sued several well-known banks, the FTC has alleged that they have not won any cases and that most were dismissed because they never pursued them. According to the FTC’s complaint, the defendants’ operation did not have attorneys who could litigate hundreds or thousands of cases.

According to the complaint, the defendants mailed marketing materials to consumers with the homeowner’s name, loan amount and property identification number, with statements such as, “Your home will be sold at Auction unless you take immediate action.” People who responded to the advertising were told they could join a lawsuit by paying $895 or more in advance for a “legal analysis,” and that they were likely or certain to prevail in a lawsuit against their lender; some consumers were told they would recover at least $75,000. After claiming the analysis showed that a consumer had a good case, the defendants charged thousands of dollars in recurring monthly fees through the law firms and failed to deposit the fees in client trust accounts as required by law.

The defendants falsely promised some clients that they would add them as plaintiffs in lawsuits; they told others they would add them soon but did so only months later. Clients’ requests for information were ignored. In addition, the defendants did not tell people when their lawsuits had been dismissed and kept collecting fees from those clients. Clients’ requests for refunds were refused.

One of the defendants, Vito Torchia, was disbarred by the California bar for misconduct. During his ethics trial, he conceded that Brookstone failed to provide the most basic elements of legal representation

At the FTC’s request, a federal court temporarily halted the scheme, and the agency seeks to permanently stop the alleged illegal practices and obtain refunds for consumers.

Preying on homeowners who already are financially distressed and struggling to pay their mortgages is appalling,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “That’s why stopping phony mortgage relief operations, like this one, is a priority at the FTC.”

The Commission vote approving the complaint was 3-0. The U.S. District Court for the Central District of California entered a temporary restraining order against the defendants on June 1, 2016.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

Ronald Rodis, 51, Irvine, California, a former attorney, pled guiltyto one count of conspiracy to commit mail and wire fraud for his role in a multi-million dollar fraudulent mortgage modification scheme.

Rodis admitted that he participated in a scheme with several co-conspirators – Bryan D’Antonio, Charles Wayne Farris and others – to induce homeowners to pay between $3,500 and $5,500 for the services of the Rodis Law Group (RLG). Between October 2008 and June 2009, Rodis and his co-conspirators made numerous misrepresentations regarding the RLG’s ability to negotiate loan modifications from the homeowners’ mortgage lenders.

Rodis recorded radio advertisements encouraging struggling homeowners to call RLG. In the ads, Rodis falsely claimed that RLG consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.” In fact, RLG was a telemarketing operation that never had a team of experienced attorneys. During much of the scheme, Rodis was the only attorney at RLG.

This defendant posed as an accomplished attorney who could provide quality legal services – and hope – to struggling homeowners,” said United States Attorney Eileen M. Decker. “But the promises were bogus. Rodis Law Group made few efforts to assist homeowners, who paid thousands of dollars in last-ditch attempts to keep their homes, many of which entered foreclosure.”

When homeowners called RLG, telemarketers made misrepresentations to convince them to hire RLG. For example, telemarketers stated that RLG had been in business for 11 years, when in fact it had only opened in October 2008. They falsely stated that RLG routinely obtained positive results for homeowners, including lower monthly payments, reductions in principal balance and lower interest rates. In fact, positive results were rarely achieved for any RLG clients. Telemarketers also falsely reiterated that homeowners would have a team of attorneys and real estate professionals assigned to their case.

In a plea agreement filed in federal court, Rodis admitted that the RLG scheme fraudulently obtained approximately $6 million from more than 1,500 victims.

It is an unfortunate truth that people often take advantage of a crisis for personal gain,” said Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office. “The Rodis Law Group was among the worst type of scammers, trying to take advantage of homeowners already experiencing profound heartache in the face of potential foreclosure. The FBI will not tolerate this kind of criminal behavior. I truly hope that when the next financial crisis arises, members of the public take a moment to look into claims that sound too good to be true, even if those claims are made by attorneys, before would-be clients become victims.”

United States District Judge David O. Carter accepted the plea and is scheduled to sentence Rodis on February 27, 2017

At the height of the mortgage crisis, this defendant and his co-conspirators preyed on desperate homeowners with a series of lies and false promises,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to prosecute individuals who target vulnerable victims for profit.”

The two co-defendants in the case –D’Antonio and Farris – are each charged with conspiracy and nine counts of wire fraud. Each of these counts carries a statutory maximum penalty of 20 years in prison. In addition, D’Antonio is charged with 13 counts of criminal contempt for violating a 2001 federal court order which permanently banned D’Antonio from participating in future telemarketing operations. Criminal contempt of court has no statutory maximum penalty.

D’Antonio and Farris are scheduled to go on trial on September 20.

This case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Joseph T. McNally and DOJ Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch.