Archives For Loan Modification

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.

Shayne Harrison Smith, Myrtle Beach, South Carolina, was sentenced to 63 months imprisonment in federal court in connection with his role in a loan modification scheme.

In July of 2015, Smith was charged by Information and pled guilty to Wire Fraud. After Smith completes the term of imprisonment, he will be on federal supervised release for 5 years. Smith was also ordered to pay $2,213,307.99 in restitution to the victims in his case. United States District Judge R. Bryan Harwell, of Florence, imposed the sentence.

Information presented at an earlier hearing established that Smith was involved in a loan modification scheme.  According to the Information, he convinced distressed home owners that he could negotiate better terms of repayment with their lenders. Smith required the victims to pay him advance fees and continue to pay him over time to compensate him for his services. He encouraged some of the home owners to cease communicating with their lenders and stop making payments to the lenders, because he would take care of everything. Smith never successfully renegotiated any of the mortgages.

Acting United States Attorney Beth Drake announced the sentence.  The case was investigated by the FBI. Assistant United States Attorney John C. Potterfield of the Columbia United States Attorney’s Office prosecuted the case.

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.”

 

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.

Dionysius Fiumano, also known as “D,” 43, Irvine, California, was found guilty in Manhattan federal court of orchestrating a massive mortgage modification scheme through which he and his co-conspirators defrauded more than 30,000 American homeowners out of a total of approximately $31 million.  Fiumano was convicted of one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a statutory maximum sentence of 20 years in prison.

According to the Indictment other filings in Manhattan federal court and the evidence presented at trial:

Fiumano was the general manager of sales at Vortex Financial Management, Inc., a/k/a Professional Marketing Group, a/k/a Professional Legal Network (“PMG”), an Irvine, California, company that offered purported “mortgage modification” services, that is, assistance persuading the homeowner’s lender to agree to a modification to the terms of the homeowner’s mortgage to make it more affordable.  In that capacity, Fiumano oversaw PMG’s sales staff of approximately 65 telemarketers and managers. Continue Reading…

Daniel Sheehan, 41, Gloucester City, New Jersey, and John Hoban, 42, Bellmawr, New Jersey, were indicted in connection with a scheme to defraud distressed homeowners seeking help out of more than $400,000, .  The pair is charged with wire fraud conspiracy and eight counts of wire fraud.  Sheehan is additionally charged with 18 wire fraud counts and one count of interstate transport of stolen property.  As a result of the alleged scheme, more than 110 people were defrauded, several of whom lost their homes. Continue Reading…

Emily Suzanne Vasquez, 47, Inglewood, California, was sentenced in Nevada 12-48 months in prison after being convicted of one count of attempted theft, a category “C” felony. Vasquez was sentenced as a result of a local, state and federal investigation of a complex mortgage fraud scheme. Vasquez was also ordered to pay nearly $53,000 in restitution to her five victims.

Vasquez and other defendants operated a scheme to defraud five homeowners struggling to pay their mortgages and in danger of losing their homes. The victims were lead to believe that Vasquez’ alleged company, California Sky, would perform one or more services, including preventing the foreclosure of their homes, lowering their mortgage payments and refinancing their mortgages and reduce the payment and principal. Vasquez failed to perform any of these services, and all five of her victims lost their homes after paying Vasquez and California Sky more than $50,000.

The consequences for vulnerable homeowners who fall victim to scams like this one are devastating,” said Nevada Attorney General Adam Paul Laxalt . “My Office will continue to investigate and prosecute frauds like this one to deter future scams and ensure the safety of Nevada’s homeowners.”

This case was investigated by Investigator Jaclyn O’Malley, and was prosecuted by Senior Deputy Attorney General Eric Nickel.

 

Michael Nazarinia, 41, San Diego, California, was sentenced to 9 months in custody for his role in a fraudulent mortgage loan modification business that duped hundreds of struggling homeowners.

The business, known as “Haffar & Associates,” owned by figurehead attorney Mohamed Haffar, recruited new customers using telemarketers who lied to clients in order to induce more than 1,000 people to sign up to pay more than $3.5 million in total.

Nazarinia’s co-conspirator Charles Rose managed a call center staffed with as many as 30 telemarketers, whose job was to recruit new clients.  Rose trained the telemarketers, wrote telemarketing scripts for use on calls with potential clients, wrote form letters for the salespeople to send to potential clients, and recorded his own sales calls for telemarketers to emulate.  Rose pleaded guilty in July, admitting that he and his business partners, including Nazarinia, trained telemarketers to make statements to potential clients that were false, such as the following: Continue Reading…

Seven Indicted in Mod Fraud

Rachel Dollar —  February 2, 2016 — 1 Comment

Aria Maleki, 33, of Santa Ana, California; Mehdi Moarefian, a.k.a. “Michael Miller,” 36, of Irvine, California; Kowit Yuktanon, a.k.a. “Eric Cannon,” 31, of Huntington Beach, California; Cuong Huy King, a.k.a. “James Nolan” and “Jimmy, 32, of Westminster, California; Daniel Shiau, a.k.a. “Scott Decker,” 30, of Irvine, California; Serj Geuttsoyan, a.k.a. “Anthony Kirk,” 33, of Santa Ana, California; Michelle Lefaoseu, a.k.a. “Michelle Bennett,” 41, of Huntington Beach, California; were charged in a 14 count-indictment with conspiracy and fraud offenses stemming from an alleged scheme to defraud homeowners across the United States who were seeking mortgage loan modifications

Law enforcement seized approximately $350,000 from various bank accounts, approximately $362,000 from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.  Continue Reading…

Gabriela Tigges, 60, Martinez, California, was sentenced to 12 months and one day in prison, and ordered to pay a $20,000 fine and $208,186.78 in restitution, for her involvement in a bank fraud scheme related to a fraudulent mortgage loan application and a fraudulent mortgage loan modification application, 

Tigges pleaded guilty on October 1, 2015, to two counts of bank fraud.  According to the plea agreement, Tigges admitted she caused a client to submit a fraudulent mortgage loan application to World Savings Bank in approximately October 2005.  She also admitted submitting a fraudulent mortgage loan modification.  Tigges’ conduct eventually cost the bank $208,186.78 Continue Reading…