CFLA Scam Report

Scam Report:

Certified Forensic Loan Auditors, LLC.

By Bob Hurt, http://MortgageAttack.com

Subject of this report:

Certified Forensic Loan Auditors, LLC (CFLA)
13101 West Washington Blvd. Suite 444
Los Angeles, CA 90066
310-579-7422
Andrew Lehman, CFLA President/Owne

Warning to Borrowers Facing Foreclosure: Do not waste money buying a securitization or chain of title audit from CFLA or anyone else. Numerous court opinions, cited below, support this warning.

CFLA aggressively promotes its loan audit, securitization audit, and chain of title audit services to home loan borrowers (mortgagors) who have defaulted on their loans and feel desperate to prevent foreclosure. CFLA gives such desperate borrowers false hope that the borrowers can use their audits and expert witness testimony to avert foreclosure, even though borrowers breached the terms of their loan contracts and really ought to lose their homes to foreclosure. Virtually no mortgagor in foreclosure who purchases a loan-related audit from CFLA or any other company successfully avoids foreclosure because of information contained in the audit. The following statements by experts show why.

Florida Foreclosure Defense Attorney Matthew Weidner warned the public against securitization audits in his blog:

MORTGAGE LOAN SECURITIZATION AUDITS ARE A CRIME!

VIOLATIONS.””A person who violates any provision of this section commits an unfair and deceptive trade practice as defined in part II of this chapter. Violators are subject to the penalties and remedies provided in part II of this chapter, including a monetary penalty not to exceed $15,000 per violation.

Just this week I had another client in my office who almost lost their home because they had given thousands of dollars to a loan audit/securitization “expert” who told the to ignore the lawsuit that was filed against them. They did not respond to the lawsuit and the bank was prepared to set a sale. The judge did not have to let my new client defend the case, but the judge recognized that this old, immigrant family had indeed been the victim of a widespread and rampant fraud so the judge allowed them to defend their case and their home is safe…for now. Good call by the judge. Fair. Balanced. So now, I’m going to bust my hump to make sure this client fills out all their paperwork and gets the modification done. Here’s the thing….with their income, they could have had the modification done months ago….if only the scammer had not sold them up the river.

I get variations of the loan audit scam in my office nearly every single day. Hapless consumers are either directly approached by companies or they respond directly to any one of the hundreds of websites that have sprung up everywhere. Here’s the rap: The company or expert will audit their loan, show them how the bank committed fraud or their documents are bad or whatever and the homeowner can use that information to get a free house….for a small upfront fee of several thousand dollars…and maybe a small monthly fee if the mark can swing it.

ANY REPRESENTATIONS LIKE THIS ARE A VIOLATION OF STATE AND FEDERAL LAW!

The Federal Trade Commission (FTC) has warned mortgagors that forensic loan audits are a scam:

“there is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.”

California’s Department of Real Estate warned borrowers against forensic loan audits.

This alert and warning is issued to call to your attention the often overblown and exaggerated “sales pitch(es)” regarding the supposed value of questionable Forensic Loan Audits. It is critical to note that a loan audit (audit report) has absolutely no value as a stand-alone document.

Whether they call themselves Forensic Loan Auditors, Certified Forensic Loan Auditors (there are no such certifications in the State of California), Mortgage Loan Auditors, Forensic Attorney-Backed Foreclosure Prevention Auditors, or some other official, important or lofty sounding title(s), there are thousands of individuals and companies that have popped up and appeared all over the State of California. Most of these individuals and companies are unlicensed, and some were previously engaged in illegal foreclosure rescue and loan modification scams.

The DRE has seen a wide variety of claims and sales pitches, where impressive sounding loan review services are offered with the goal of taking your money. Quite simply, the bad players market hope – and all too often, it is false hope.

A Georgia US District Court in Demilio v US Bank issued a scathing indictment of Demilio’s effort to subvert a foreclosure with a CFLA securitization audit.

Having reviewed the Complaint and all appropriate exhibits, the Court finds that Plaintiff has failed to set forth sufficient facts to show he is entitled to relief on any of his asserted claims. In fact, rather than alleging any material facts in his pleading, Plaintiff attempts to “lodge” “[t]he facts and statements made in the securitization audit attached herein.”13Frankly, the Court is astonished by Plaintiff’s audacity. Instead of providing the “short and plain statement” of facts required by the Federal Rules of Civil Procedure,14 Plaintiff requires the Court to scour a poorly‐copied, 45‐page “Certified Forensic Loan Audit” in an attempt to discern the basic facts of his case. This alone would be sufficient for dismissal.15 However, the Court is equally concerned by Plaintiff’s attempt to incorporate such an “audit,” which is more than likely the product of “charlatans who prey upon people in economically dire situation,” rather than a legitimate recitation of Plaintiff’s factual allegations.16As one bankruptcy judge bluntly explained, “[the Court] is quite confident there is no such thing as a ‘Certified Forensic Loan Audit’ or a ‘certified forensic auditor.’”17In fact, the Federal Trade Commission has issued a “Consumer Alert” regarding such “Forensic Loan Audits.”18The Court will not, in good conscience, consider any facts recited by such a questionable authority.19

16 In re Norwood, 2010 WL 4642447, at *2.

17 Id.

18 Id. at *2 n.2; see (Mar. 2010), http://www.consumer.ftc.gov/articles/0130‐forensic‐loan‐audits. The State of California Department of Real Estate issued a similar alert entitled Fraud Warning Regarding Forensic Loan Audits (Feb. 2010), http://www.dre.ca.gov/Consumers/ConsumerAlerts.html.

19 See, e.g., Fidel, 2011 WL 2436134, at *1 (disregarding a “Securitization Audit and Forensic Audit” attached as exhibits to plaintiff’s complaint); accord Hewett v. Shapiro & Ingle, No. 1:11CV278, 2012 WL 1230740, at *4, n.4 (M.D.N.C. Apr. 12, 2012) (discussing various “audits” and noting that such documents “confirm the empty gimmickery of these types of claims.”).

State and federal courts across the land have denounced securitization and chain of title audits, and have uniformly ruled against the clients of CFLA who relied on CFLA audits to save their homes from foreclosure. The end of this report lists 26 court opinions which borrowers should read BEFORE deciding to spend money on a useless CFLA loan/securitization/chain-of-title audit. None of the judges in those case ruled in favor of the borrower. The Leadbeater v JP Morgan opinion provides this comment in footnote 9:

“Judge Madeline Cox Arleo has previously cautioned that she has “concern over the dubious nature of such reports [prepared by Certified Forensic Loan Auditors, LLC.]”Hicks v. The Bank of New York, et al.,

Civil Action No. 15-1620, Letter Order, D.E. 22 (Feb. 22, 2016). The FTC has recently warned consumers to be wary of “forensic mortgage loan audits.” Federal Trade Commission, Forensic Loan Audits, https://www.consumer.ftc.gov/articles/0130-forensic-loan-audits (last visited September 13, 2017) (“According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, the latest foreclosure rescue scam to exploit financially strapped homeowners pitches forensic mortgage loan audits.”).”

Blogger and mortgage pundit Martin Andelman wrote this about one of CFLA’s attorney-instructors:

Patricia Rodriguez, Attorney at Law –Patricia is another of CFLA’s instructors. She also has been very active representing homeowners. Going back to June of 2012,Westlaw shows her handling 20 cases, (and you can find a list of her cases at that link).

None were any sort of win for the homeowners… in one she was sanctioned by the court and the 19 others were dismissed, many with prejudice or without leave to amend… the three quiet title cases were all dismissed.She also filed a mass joinder lawsuit that was also dismissed.But it’sMcGough v. Wells Fargo Bank, 2012 WL 6019108 (U.S. DC N.D. Ca. 12/3/12), that deserves to be highlighted because in this case, Ms. Rodriguez ended up being sanctioned by the court for violating Rule 11 of the Federal Rules of Civil Procedure, and ordered to attend 20 hours of continuing legal education. Here’s what the court said about Ms. Rodriguez…

The Court is disheartened by counsel’s failure in this case, even in responding to the present motion, to recognize that she has erred. If she had approached her practice with a measure of common sense, Counsel might have reconsidered her position…

And on a very basic level, the Court wishes to remind counsel that if an ordinary person cannot understand what she is saying in her pleadings—a neighbor, friend, or family member—then it is very likely that the Court and opposing counsel will not be able to either. The kind of garbled pleading that counsel has three times submitted to this Court imposes a burden that all involved would like to avoid in the future.

Accordingly, the Court hereby orders counsel, Patricia Rodriguez, to attend a minimum of twenty (20) hours of MCLE-accredited legal education courses, apart from any compliance hours regularly required by the California Bar Association. These hours shall include a minimum of eight hours in complaint-drafting or other legal writing, eight hours addressing the substantive law of foreclosure, if indeed it is an area in which Ms. Rodriguez wishes to continue practicing, and two hours of legal ethics training.

And remember that Patricia is a CFLA Instructor, training lawyers and others around the country in how to represent homeowners in quiet title cases and how to use CFLA’s securitization audits in foreclosure defense.

Look, I understand that foreclosure defense has been incredibly difficult even for the most dedicated and experienced attorneys. So losing is not necessarily a bad thing all by itself. But the way CFLA markets the company’s instructors, experts and seminars as leading the industry is at least misleading.

Mortgagors facing foreclosure might wonder why they cannot find more consumer complaints against CFLA at sites like RipoffReport.com. Upon visiting that site a search for CFLA under its full name will reveal multiple pages of advertising showing CFLA to be a model company, but no complaints at all. The reason: CFLA’s principal has paid the equivalent of a bribe to the principal of RipoffReport to remove all complaints against CFLA from the site and replace them with advertisements making CFLA seem honorable. Clearly, CFLA has earned so much money scamming troubled mortgagors that it now seems evident that CFLA can afford to pay bribes or issue threats to get webmasters to remove complaints and to get angry customers to retract their complaints. The court opinions that follow prove that CFLA cons troubled mortgagors into buying CFLA’s useless securitization, chain-of-title, and loan audit services. Borrowers who rely on CFLA audits lose in court.

Court Opinions Showing Borrowers LOSE by Relying on CFLA Audits

Google Scholar search for “Certified Forensic Loan Audit” and “Certified Forensic Loan Auditors” produced 27 results 2019-03-04

  1. DEMILIOv. CITIZENS HOME LOANS, INC. Dist. Court, MD Georgia, 2013
  2. Barrionuevo v. Chase Bank, NA 885 F. Supp. 2d 964- Dist. Court, ND California, 2012
  3. Blanchard v. FREMONT HOME LOAN TRUST 2005-D Dist. Court, WD Washington, 2017
  4. BARRIONUEVO v. CHASE BANK, NA Dist. Court, ND California, 2013
  5. JP Morgan Chase Bank, NA v. Galloway NM: Court of Appeals, 2018
  6. WAN v. PULTE MORTGAGE Dist. Court, D. Nevada, 2014
  7. MANTOVANI v. WELLS FARGO BANK, NA Dist. Court, D. New Jersey, 2018
  8. GILARMO v. US BANK NA AS TRUSTEE FOR CSAB MORTGAGE BACKED TRUST 2006-1 Court of Appeals, 3rd Circuit, 2016
  9. Sarkar v. WORLD SAVINGS FSB Dist. Court, ND California, 2014
  10. VIERA LOPEZ v. BAYVIEW LOAN SERVICING, LLC Dist. Court, SD New York, 2017
  11. IM v. BAYVIEW LOAN SERVICING LLC Dist. Court, SD New York, 2018
  12. Dumas v. JPMorgan Chase Bank, NA Cal: Court of Appeal, 3rd Appellate Dist., 2014
  13. McGough v. WELLS FARGO BANK, NA Dist. Court, ND California, 2012
  14. Hernandez v. RESIDENTIAL CREDIT SOLUTIONS, INC. Dist. Court, ND California, 2016
  15. English v. RYLAND MORTGAGE COMPANY Dist. Court, D. Maryland, 2016
  16. Cox v. NATIONSTAR MORTGAGE LLC Dist. Court, SD New York, 2016
  17. LEADBEATER v. JP MORGAN CHASE, NA Dist. Court, D. New Jersey, 2017
  18. Hylton v. JP Morgan Chase Bank, NA Dist. Court, SD New York, 2018
  19. Sanders v. SUTTON FUNDING, LLC Dist. Court, SD California, 2014
  20. Sylvester v. INTERBAY FUNDING LLC Dist. Court, SD New York, 2017
  21. Suggs v. M & T BANK 230 F. Supp. 3d 458- Dist. Court, ED Virginia, 2017
  22. Avila v. MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC. Dist. Court, SD Texas, 2012
  23. Williams v. Ward Md: Court of Special Appeals, 2016
  24. Stephens v. BANK OF AMERICA HOME LOANS, INC. Dist. Court, North Carolina, 2017
  25. Baker v. CitiMORTGAGE, INC. Dist. Court, Minnesota, 2018
  26. GONSALVES-CARVALHAL v. AURORA BANK Dist. Court, ED New York, 2014
  27. Kennedy v. WORLD SAVINGS BANK, FSB Dist. Court, ND California, 2015

* * *

Proof that YOU can AFFORD a Mortgage Exam

Scammers of every stripe seem to crawl the nation looking for gullible home loan borrowers facing foreclosure, in order to sell them a worthless mortgage rescue service for gargantuan fees.

And when those borrowers finally learn about Mortgage Attack, they have the gall to whine that they don’t have the money to pay for the comprehensive mortgage examination they should have bought at the beginning of their trouble.

Why should borrowers invest in a mortgage exam?

Borrowers need the mortgage exam to prove injury and launch a Mortgage Attack against those who hurt them.   Injurious parties can include the lender, servicer, appraiser, mortgage broker, realtor, closer, title company, lawyer, and any others connected to your loan transaction.  Borrowers need the mortgage exam service because they lack the knowledge, experience, and skill to do it themselves.

And they need the exam because Mortgage Attack constitutes the ONLY demonstrably RELIABLE METHOD borrowers can use to collect monetary damages, set-offs from their debt, a loan balance reduction at favorable terms, or even the house free and clear.

You had the money to pay the scammers selling securitization audits, loan audits, and other useless services like the scams in the below press releases.  So DON’T tell me you don’t have the money for a proper mortgage exam that provides you with the proof that will convince a court to order a damages award to you for injuries you suffered.

Otherwise, without the mortgage exam integral to  the Mortgage Attack method, YOU WILL LOSE THE HOUSE, as you should, for breaching your note and failing to challenge the validity of the loan.

Here’s the proof that YOU have the money for the comprehensive mortgage examination that the Mortgage Attack  Maven recommends.  AND, here’s the proof that people like you have the money to pay upward of $10,000 or more to SCAMMERS.

Remember that a DOZEN such scammers get away with their crimes for every scammer the government catches and prosecutes.  And people like you emptied their wallets for them.

So, DON’T TELL me that you can’t afford a mortgage exam.  Go GET the money and order your mortgage examination today.

PROOF 1:  scammer imprisoned for bilking 400 mortgage victims out of $15,000 each.

Department of Justice
U.S. Attorney’s Office
Central District of California

FOR IMMEDIATE RELEASE
Monday, October 5, 2015

Whittier Woman Sentenced to Nearly 6 Years in Prison for Having Duped 400 Victim Homeowners – Many Spanish Speakers – of Nearly $4 Million with False Promises of Eliminating Their Mortgages

LOS ANGELES—A Whittier woman was sentenced today to nearly 6 years in prison for her lead role in a scheme that falsely promised to eliminate mortgage debts for approximately 400 distressed homeowners who each paid a $15,000 fee, totaling nearly $4 million in victim payments. Instead of working on behalf of the homeowners, the woman simply sent worthless “Sovereign Citizen” paperwork to lenders—paperwork that did nothing to affect the mortgage of a single homeowner.

Maria Marcela Gonzalez, 45, was sentenced by Judge Stephen V. Wilson in United States District Court in Los Angeles, for two counts of making a false bankruptcy declaration.  In rejecting her request for a probationary sentence and imposing the 70-month sentence, Judge Wilson said that the defendant’s actions were “callous and in gross disregard of the law.”

Gonzalez, who pled guilty in July of this year, started the Crown Point Education Inc. scheme in early 2010 and operated from offices in Montebello.  She admitted in her plea agreement that she spoke at seminars to recruit distressed homeowners and salespersons in the Crown Point program and ran the day-to-day operations of the scheme. Many of the victims were primarily or exclusively Spanish speakers.

In her plea agreement, Gonzalez admitted that she and others promised distressed homeowners at these seminars that, in exchange for fees that were generally $15,000 per property, Crown Point would eliminate the homeowners’ mortgages within six to eight months through a secret process that involved sending packets of documents to lenders. Even though she told victims that she could eliminate their mortgage woes, Gonzalez admitted in her plea agreement that the process had never been successful. Gonzalez failed to tell distressed homeowners that earlier Crown Point clients had lost their houses to foreclosure and been evicted from their houses.

In the plea agreement, Gonzalez admitted that she worked with co-schemer Jude Lopez, who was also convicted and sentenced to a probationary term, and Ernesto Diaz, who was charged but failed to appear and is currently a fugitive.  Lopez admitted in his plea agreement that he filed bankruptcy documents in the names of Crown Point clients to delay foreclosure and eviction. Diaz admitted in his plea agreement that Crown Point filed many bankruptcy documents without the knowledge of the company’s clients and that signatures of debtors and notaries were forged on many documents filed with the bankruptcy court.

The claims made to distressed homeowners were based on discredited Sovereign Citizen claims that mortgages are invalid because the banks did not actually lend the money used to fund mortgages, and the notes were securitized.

The case against Gonzalez, Diaz, and Lopez was conducted by the Federal Bureau of Investigation.

PROOF 2:  Scammer indicted for bilking 13 mortgage victims out of up to $8000 each for mortgage amelioration service.

PRESS RELEASE

Internal Revenue Service – Criminal Investigation
Cincinnati Field Office
Special Agent in Charge Kathy A. Enstrom

Date: Wednesday, September 30, 2015
Contact: Craig Casserly
IRS – Criminal Investigation
401 N. Front Street
Columbus, Ohio 43215
(614) 744-3130
Craig.casserly@ci.irs.gov
CI Release #: CINFO-2015-35

COLUMBUS BUSINESSMAN INDICTED IN “MORTGAGE AMELIORATION” INVESTMENT FRAUD SCHEME

COLUMBUS, OHIO — A federal grand jury here has indicted Gary Jones, 52, of Columbus, Ohio, charging him with thirteen counts of mail fraud, eight counts of money laundering, and four counts of willfully failing to file a federal income tax return with the Internal Revenue Service (IRS).

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the indictment returned today.

According to the indictment, between January 2010 and March 2012, Jones was the managing member of 3ARCK Capital Group, LLC, also d/b/a Three Arck Capital Group, LLC (hereinafter “3Arck”). Jones is alleged to have been the sole authorized signatory on several bank accounts for the benefit of 3Arck, which had a banking relationship with Fifth Third Bank, PNC Bank, and J.P. Morgan Chase Bank. In addition, Jones allegedly partnered with an individual in an investment company known as North American Realty Services Corporation, LLC (hereinafter “NARSCOR”).

It has been alleged that between May 2009 and September 2012, Jones, by himself, through his position at 3Arck, and through his partnership with NARSCOR, raised funds under false pretenses through a process called “mortgage amelioration.” Through “mortgage amelioration,” Jones represented that he could eliminate or modify mortgages held by banks, based on theories that the mortgages were invalid or illegal because the banks had no right to foreclose on the loans. Jones represented that, after a long process, the banks would acknowledge that the mortgages and/or foreclosures were not legitimate.

Jones allegedly represented that he could present claims to the banks and the courts on behalf of property owners, and that he could either force the banks to return properties that had already been repossessed through foreclosures, or that he could get restitution for property owners upon whom the foreclosures had occurred. Jones allegedly represented that the property owners could then either have their mortgages completely eliminated, or at the very least, modified with lower payments and a better term. In addition, Jones allegedly represented that those who had already lost their homes would be rewarded with monetary compensation or the return of bank-owned properties.

It has further been alleged that the property owners or investors could place a property into the “mortgage amelioration” program by paying an application fee of between $3,995 and $7,995. The fee was to be held in an escrow account and was represented to be 100% refundable, whether the process was successful or unsuccessful.

Allegedly, Jones represented that the only expenditures out of the escrow account were to be for incidentals necessary for filings with the courts and for the creation of a trust. Even if expenditures were made from funds in the escrow account, the fee was to be returned in full to the investor at the end of the process. Once the trust was created, Jones represented that he would “ameliorate” the mortgages on the properties through communications with the banks and the courts. After the mortgage had been “ameliorated,” the property owner, allegedly, could either buy the property back from the trust or walk away from the property.

It has been alleged that the property owners or investors either mailed or e-mailed their application and other documentation. The application fees were paid by mailing checks or by wire transfer to Jones, 3Arck, Jones’s partner at NARSCOR, or to NARSCOR. Jones represented to victims that he had completed numerous “mortgage amelioration” deals and had a 100% success rate; however, it has been alleged that no mortgages were ever successfully eliminated or reduced through the program. Also, despite representations that the refundable application fees would be kept in escrow accounts, it has been alleged that the money was deposited into bank accounts controlled by Jones and no application fees were ever refunded; rather, Jones used the homeowners’ and investors’ funds for personal use.

It has been alleged that Jones failed to file a federal income tax return with the IRS for the 2009-2012 income tax years, despite earning gross income in the amount of $280,340 in 2009; $1,090,304.54 in 2010; $880,791.12 in 2011; and $146,554.50 in 2012.

Mail fraud carries a maximum penalty of 20 years in prison and a fine of up to $250,000. Money laundering carries a maximum penalty of 10 years in prison and a fine of up to $250,000. Failing to file an income tax return with the IRS carries a maximum penalty of 1 year in prison and a fine of up to $100,000.

“Mr. Jones’s actions not only caused negative ramifications to those financially connected to him, but also the honest taxpayer when he committed significant tax fraud violations as detailed in the indictment,” said Kathy A. Enstrom, Special Agent in Charges, IRS Criminal Investigation, Cincinnati Field Office. “Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money as well as skirt their tax obligations.”

This case is being prosecuted by Assistant United States Attorney Jessica H. Kim and was investigated by special agents of IRS-Criminal Investigation.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

# # #

PROOF 3:  USDC fines and sentences perps for $7 million Loan Mod Scam

Department of Justice
U.S. Attorney’s Office
Central District of California

FOR IMMEDIATE RELEASE
Monday, December 7, 2015

Operator of Inland Empire Loan Modification Scam that Targeted Distressed Homeowners Sentenced to 18 Years in Federal Prison

RIVERSIDE, California – The founder and co-owner of a Rancho Cucamonga business was sentenced today to 18 years in federal prison for orchestrating a scheme that offered bogus loan modification programs to thousands of financially distressed homeowners who lost more than $7 million when they paid for services that were never provided.

Andrea Ramirez, 47, of Rancho Cucamonga, was sentenced today by United States District Judge Virginia A. Phillips, who also ordered the defendant to pay $6,764,743 in restitution.

Ramirez was the organizer of a telemarketing operation known under a series of names – including 21st Century Legal Services, Inc. – that bilked more than 4,000 homeowners across the nation, many of whom lost their homes to foreclosure. Ramirez was sentenced today after pleading guilty to one count of conspiracy to commit mail fraud and wire fraud.

“This fraudulent company purposely targeted homeowners who were extremely vulnerable because they were facing foreclosure,” said United States Attorney Eileen M. Decker. “Ramirez and her co-defendants made false promises to desperate homeowners, often took the last of their money and then abandoned them. Her contempt for her victims will put her in federal prison for nearly two decades.”

Previously in this case, the other co-owner of 21st Century – Christopher Paul George, 45, of Rancho Cucamonga, was sentenced by Judge Phillips to 20 years in federal prison.

A total of 11 defendants linked to 21st Century have been convicted of federal fraud charges as a result of an investigation conducted by the Federal Bureau of Investigation; IRS – Criminal Investigation; the United States Postal Inspection Service; the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Federal Housing Finance Agency, Office of Inspector General.

“As the ringleader in a scheme to dupe thousands of distressed homeowners out of their last dollar at the height of the financial crisis, Andrea Ramirez earned the next 18 years in federal prison, which she should use to reflect on her victims,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

During a 15-month period that began in the middle of 2008, Ramirez operated 21st Century, which defrauded financially distressed homeowners by making false promises and guarantees regarding 21stCentury’s ability to negotiate loan modifications for homeowners. Employees of 21st Century made numerous misrepresentations to victims during the course of the scheme, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the United States government. Victims were generally instructed to stop communicating with their mortgage lenders and to cease making their mortgage payments.

21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings. The company also controlled websites that advertised loan modification services. Once they contacted the distressed homeowners, 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, 21stCentury employees told homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when Ramirez, George and their co-defendants simply were pocketing the homeowners’ money.

After federal authorities executed a search warrant at 21st Century, Ramirez relocated 21st Century’s offices, renamed the company and made it appear it was operating out of Las Vegas, Nevada.

“Fraudulent mortgage fraud schemes affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes,” said Robert Wemyss, Inspector in Charge of the U.S. Postal Inspection Service – Los Angeles Division. “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.”

Special Agent in Charge Erick Martinez of IRS-Criminal Investigation of the Los Angeles Field Office stated: “Ms. Ramirez took advantage of unsuspecting homeowners hoping to keep a roof over their heads.  Hopefully she will now understand that her irresponsible actions have real consequences.”

In addition to Ramirez and George, nine other defendants have been convicted for their roles in the 21st Century scam. They are:

•           Crystal Taiwana Buck, 40, of Long Beach, who persuaded numerous victims to pay fees to 21stCentury, was sentenced to five years in prison;

•           Albert DiRoberto, 62, of Fullerton, who handled both sales and marketing – which included making a commercial for 21st Century – was sentenced to five years in prison;

•           Yadira Garcia Padilla, 38, of Rancho Cucamonga – who, among other things, posted bogus positive reviews about 21st Century on the Internet – was sentenced to four years in prison;

•           Michael Bruce Bates, of Moreno Valley, was sentenced to one year and one day in prison;

•           Michael Lewis Parker, of Pomona, was sentenced to six years in prison;

•           Catalina Deleon, of Glendora, is scheduled to be sentenced on December 14;

•           Hamid Reza Shalviri, of Montebello, is scheduled to be sentenced on Thursday, December 10;

•           Mindy Sue Holt, of San Bernardino, was sentenced to 18 months in prison; and

•           Iris Melissa Pelayo, of Upland, was sentenced to four years in prison.

15-144
USAO – California, Central
Updated December 7, 2015
# # #

PROOF 4:  Scammers Bilk 54 Mortgage Rescue victims out of $220,000

Department of Justice
U.S. Attorney’s Office
Northern District of Illinois

FOR IMMEDIATE RELEASE
Tuesday, December 17, 2013

Three Defendants Indicted For Allegedly Swindling 54 Victims Of $220,000 In Fees In Mortgage “Rescue” Fraud Scheme

CHICAGO ― Three defendants who operated Washington National Trust, which was not licensed in Illinois as either a trust or a mortgage company, are facing federal fraud charges for allegedly swindling approximately $220,000 from at least 54 homeowners after falsely promising to save their homes from foreclosure and lower their monthly mortgage payments. The alleged mortgage “rescue” fraud scheme primarily preyed upon Hispanic victims in and around Aurora since late 2011.

One defendant, CARLOS RAYAS, 39, of Aurora, whose loan originator license was revoked by state regulators, was arrested today. He pleaded not guilty before U.S. Magistrate Judge Sheila Finnegan and was released on his own recognizance. A status hearing was set for Jan. 10 in U.S. District Court.

Arrest warrants were issued for MELVIN T. BELL, 37, also known as “Alex Crown,” “Minister Bey,” “Sovereign King Bey,” “King Bey,” and “S.K. Bey,” and MONICA HERNANDEZ, 43, Rayas’ cousin and a former licensed real estate broker. Both Bell and Hernandez were last known to reside in Oswego.

Bell and Hernandez were each charged with four counts of mail fraud, and Rayas was charged with two counts of mail fraud, in an indictment that was returned last week by a federal grand jury and unsealed today. The indictment also seeks forfeiture of approximately $220,000.

According to the indictment, the defendants marketed the official-sounding Washington National Trust as a business providing a financial assistance program for homeowners that was operated and controlled by wealthy Native Americans and was exempt from state and federal laws. In exchange for fees ranging between $5,000 and $10,000 per property, the defendants claimed that Washington National Trust would lower the homeowners’ existing mortgage payments by half and defeat any foreclosure. All three defendants knew, however, that Washington National Trust was not licensed to conduct loan originations and modifications in Illinois and could not lower mortgage payments or defeat foreclosure.

Bell, Hernandez, and Rayas allegedly falsely promised that Washington National Trust would pay off and acquire homeowners’ mortgages, and once that happened, the homeowners would owe only half the original mortgage to Washington National Trust, due over five years and free of any interest and property taxes. To effect this so-called “mortgage rescue,” the defendants had homeowners sign documents and deeds purportedly appointing Washington National Trust as trustee and transferring title of their homes to the business, the indictment alleges. As part of the scheme, the defendants recorded fraudulent documents and deeds in Kane, Kendall and other counties to delay foreclosure and to make it appear that their business was the homeowners’ trustee, the charges add.

The indictment also alleges that the defendants falsely promised that the fees paid by homeowners would go toward reducing their principal balance after Washington National Trust acquired the loan from the lender. Instead, Bell and Hernandez used the fees to pay for marketing and operating the business, including making payments to Rayas and others who referred homeowners to them, as well as for various personal expenses, including meals, travel, and merchandise.

All three defendants allegedly concealed from homeowners that the Kane County Circuit Court had issued orders in September and October 2012 barring Washington National Trust from further filing and recording deeds. They also allegedly concealed that the Illinois Department of Financial and Professional Regulation had issued orders in December 2012 and February 2013, first, to Washington National Trust to stop using the word “trust” and, later, to all three defendants to stop engaging in unlawful residential mortgage activity.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tony Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The Illinois State Police also participated in the investigation.

The government is being represented by Assistant U.S. Attorney Jessica Romero.

Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternative fine totaling twice the gross gain or twice the loss, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

An indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Indictment

USAO – Illinois, Northern
Updated July 27, 2015
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PROOF 5:  Mortgage Rescue scammers give up $400,000 in compensation for cheating borrowers

A.G. Schneiderman Reaches $400,000 Settlement With Alleged Participants In Mortgage Rescue Scam That Stole Deeds From Long Island Homeowners

Sale-Leaseback Fraud, Perpetrated At Height of Housing Crash on Long Island, Cheated 14 Families Out Of Their Homes’ Deeds and Equity

Settlements Will Return $400,000 To Families Cheated By Scam; Office of the Attorney General Also Working To Return Stolen Deeds To Homeowners

Schneiderman: This Shameful Scam Re-Victimized Families Already Suffering From The Collapse Of The Housing Market

NEW YORK – Attorney General Eric T. Schneiderman today announced that he had reached settlement agreements with a disbarred attorney, an attorney, and a mortgage broker, who along with others allegedly operated a mortgage foreclosure rescue scam on Long Island that robbed 14 Long Island homeowners out of their homes’ deeds and equity. The mortgage foreclosure rescue scam involved multiple alleged partners: Empire Property Solutions and its principals, John Rutigliano and Kenneth Kiefer, located in Medford and Bethpage, NY; Zornberg & Hirsch law firm and its married principals, disbarred attorney Barry Zornberg and Nanci Hirsch, located in Hauppauge, NY; H&Z Abstract, a title company owned by Hirsch, located in Hauppauge, NY; Cory Covert, an attorney licensed to practice in New York, located in Hauppauge, NY; and mortgage broker Leonie Neufville (d/b/a Neufville Mortgage, located in Baldwin, NY).

Under the settlements, Barry Zornberg agreed to pay $340,000; Cory Covert agreed to pay $67,500.00; and Leonie Neufville agreed to pay $10,000.00 and accept a five-year ban on acting as a broker. The Attorney General has received a default judgment against Rutigliano and Kiefer, which will be converted into a money judgment. All of these funds will be used to compensate victims of the “sale-leaseback” fraud, which was perpetrated at the height of the housing crash on Long Island.

“This shameful scam re-victimized families already suffering from the collapse of the housing market,” said Attorney General Schneiderman. “My office has the resources to connect families in danger of foreclosure with qualified housing counselors and lawyers. We’ve already helped more than 50,000 families across the state, but our work will not end until we’ve guaranteed that every family in need can get the help they deserve.”

Under this mortgage rescue scam, Empire Property Solutions advertised in local papers, offering services to help families save their homes from foreclosure by refinancing their mortgages and repairing their credit scores. The company’s principals, Rutigliano and Kiefer, encouraged homeowners to turn over the titles to them through “sale-leaseback” agreements. Homeowners were told they could stay in the properties, pay rent, build up their credit, and then, after a year, that title in the home would revert back to them. But the Attorney General’s investigation found that Rutigliano and Kiefer failed to make good on their promises to use the homeowners’ payments to pay down their mortgages. In the end, the homeowners faced foreclosure and eviction.

The attorneys represented buyers, sellers, and banks at various closings of these sale-leaseback transactions, which took place at the office of Zornberg & Hirsch. But the attorneys allegedly failed to represent the interests of the homeowners, and were instead integral to inducing them to enter into the fraudulent transactions with Empire Property Solutions. As alleged, the scam also relied on the participation of a mortgage broker, Leonie Neufville, who prepared loan applications that were integral to the effort to fraudulently obtain new mortgages.

After filing a civil complaint, Attorney General Schneiderman reached multiple settlements that will return money to the victims of this fraudulent mortgage rescue scheme.

The settlement with Zornberg, Nanci Hirsch, H&Z Abstact, and Zornberg & Hirsch law firm requires Zornberg to pay a total of $340,000. The settlement with the other attorney, Cory Covert, requires him to pay $67,500. The settlement with the mortgage broker, Leonie Neufville, bars her from practicing in the real estate industry for five years and requires her to pay $10,000.

Attorney General Schneiderman has also received a default judgment against Rutigliano and Kiefer, the principals of Empire Principal Solutions. Since Rutigliano has passed away, his estate is in probate, and the Attorney General is working to convert the default judgment against Rutigliano and Kiefer into a money judgment.

The Office of the Attorney General (OAG) is working with several of the victims to return their deeds to their rightful ownership. OAG is also actively helping another family purchase a new home with the restitution they will receive from the settlements.

One of the homeowners who will get her deed back is Rosalie Thomas, a licensed nurse practitioner from Elmont, NY. After receiving a foreclosure notice in 2006, Thomas called Empire Property Solutions for help. Empire Property Solutions claimed Thomas could avoid foreclosure by signing onto their payment plan, but she still received a foreclosure notice a year later after spending tens of thousands of dollars.

“This whole ordeal has been very scary and stressful,” said Rosalie Thomas. “My youngest son was born in the house that Empire Property Solutions tried to take away from me. It’s the only home he’s ever known. I’m looking forward to finally getting the deed back and finally putting this behind me.”

Ronald Lambre and Marie DiManche, Haitian immigrants who live in Medford, NY, are working with OAG to purchase a new home with money from the settlements. After seeing an ad in the newspaper, Ms. Dimanche, a certified nursing assistant, called Empire Property Solutions and set up a payment plan that was initially half of what she and her husband were paying on their mortgage. After a year, Empire Property Solutions tripled the monthly payments and threatened to evict Lambre and DiManche if they did not pay. Their family, which includes six children, left the home and has since moved three times. OAG came across their case after opening an investigation.

“There is no way to describe how you feel when your home is stolen,” said Marie DiManche. “I’m from Haiti, and it was my dream to own a house. How do you tell your kids you can’t get back what you lost? Thanks to these settlements, my family will finally have a chance to start over again.”

The federal government also brought a criminal investigation against the partners of this sale-leaseback fraud. The United States Attorney’s Office (USAO) indicted Rutigliano and Kiefer on charges of conspiracy to commit wire fraud. USAO also indicted Zornberg for lying to federal investigators about his role in the scam.

The indictment has been dismissed against Rutigliano due to his death. Kiefer pleaded guilty and is awaiting sentencing. Zornberg pleaded guilty to perjury as part of a plea deal and has agreed to pay approximately $1.3 million in compensation to the victims of the fraud. Zornberg is awaiting final sentencing in federal criminal court.

This case is being handled by Assistant Attorney General Richard Yorke, Senior Investigator Paul Matthews, and Assistant Attorney General in Charge of the Nassau Regional Office, Valerie Singleton, under the supervision of Executive Deputy Attorney General for Regional Offices, Marty Mack.  The case was previously handled by former Assistant Attorney General Victoria Safran.

In December 2014, Attorney General Schneiderman launched AGScamHelp.com, a web-based app that helps homeowners determine whether a mortgage assistance company has been vetted by a government agency.

OAG launched AGScamHelp.com in direct response to an observed increase in mortgage rescue scams in New York and across the country. According to a December 2014 report by the Center for NYC Neighborhoods and the Lawyers Committee for Civil Rights Under Law, more than 42,000 homeowners have been conned out of $100 million nationwide.

New Yorkers have been hit particularly hard. From March 2010 to September 2014, New York homeowners submitted more than 2,700 foreclosure rescue scam complaints to the Lawyer Committee for Civil Rights, documenting at least $8.25 million in losses. Since AGScamHelp.com launched in December, more than 26,000 New Yorkers have visited the website.

AGScamHelp.com has several informational features:

  • Search Government-Vetted Companies: AGScamHelp.com allows consumers to search the name of an individual or company to determine if that entity is a “government-vetted” agency (that is, either a member of the Attorney General’s HOPP network or a HUD-certified counseling agency). If the company searched is not a government-vetted agency, the consumer will be told to proceed with caution and advised with several tips on how to identify signs of a foreclosure rescue scam.
  • Locate Nearby Counseling Partners: The web-based app also features an interactive map that allows consumers to find the nearest Homeowner Protection Program (HOPP) grantee. The Attorney General has dedicated $100 million to fund HOPP, a network of more than 85 housing counseling and legal services agencies across the state that are dedicated to providing free assistance to New Yorkers.
  • Report Scams: Consumers who have already been contacted by, or are in the process of working with a company suspected of operating a foreclosure rescue scam, will also have the option to file a complaint with the Attorney General’s Office. They will be directed to a separate page where they can complete a complaint form online. All complaints will be directed to the Attorney General’s Bureau of Consumer Frauds and Protection, and will be mediated by the Attorney General’s Office.
  • Get Tips: AGScamHelp.com offers details on how to recognize signs of a foreclosure rescue scam, including samples of scam letters and other materials utilized by fraudsters to target homeowners, and provides information about recent foreclosure scams that have been the subject of enforcement actions brought by the Attorney General’s Office and other law enforcement agencies.

Homeowners at risk of foreclosure should reach out to OAG, which can connect them with a free, qualified housing counseling agency within the Attorney General’s Homeowner Protection Program (HOPP).

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