The following is a list of recent actions taken by law enforcement agencies against foreclosure rescue scammers operating in New York and across the country. This page is intended to provide only a sampling of enforcement efforts against some of the most notorious foreclosure rescue scammers nationwide and does not begin to reflect the full scope of government efforts to shut down scamming organizations across the country.
Litvin Law Firm
In May 2015, the New York State Attorney General’s Office obtained a default judgment in New York County Supreme Court against two law firms and their lead attorney for participating in a fraudulent mortgage rescue scheme. The judgment ordered Litvin Law Firm; Litvin, Torrens & Associates, PLLC; and the firms’ principal attorney Gennady Litvin to immediately halt their illegal business practices, including preying upon financially vulnerable consumers by claiming to provide a comprehensive legal services plan that would allow consumers to avoid foreclosure. Under the judgment, the court also ordered the Litvin Law Firm and Gennady Litvin – which have recently filed for bankruptcy – and Litvin, Torrens & Associates to provide a full accounting so that the Attorney General’s Office can determine an appropriate amount for restitution for their victims, who typically paid hundreds of dollars in monthly fees for services that were never provided. Read more.
Home Affordable Direct
In August 2014, the New York State Attorney General’s Office took action against four companies – Home Affordable Direct, Inc., Home Affordable Solutions, Inc., JR Holding Group Corp, and Clear Solutions and Settlements, Inc. – and owner Javier Gutierrez. Based on Long Island and in Florida, these companies lured in homeowners by promising that they could obtain reductions in the principal balance of their mortgage loans or reductions in their monthly mortgage payments. The companies routinely failed to deliver on these promises, collecting illegal, hefty upfront fees ranging from $1,500 to over $11,000 and refusing to provide refunds when homeowners caught on to their scam. In radio advertisements, the companies even falsely claimed to be affiliated with a program sponsored by the United States Treasury Department that assists homeowners in obtaining loan modifications. The companies and Gutierrez have been banned from advertising or operating any business providing mortgage assistance relief. They were ordered to refund all fees paid by consumers and pay $2.5 million in costs and penalties. Read more.
Ped Abghari, Dionysius Fiumano, and Justin Romano
In August 2014, criminal charges were brought in federal court in New York against Ped Abghari, a/k/a “Ted Allen,” Dionysius Fiumano, and Justin Romano for allegedly defrauding more than 8,000 homeowners nationwide out of more than $18.5 million. The defendants were charged with engaging in a massive scheme to defraud homeowners who were seeking loan modifications. Using communications sent by a California telemarketing company, Abghari, Fiumano and Romano duped homeowners into paying thousands of dollars each in up-front fees claiming that their mortgages were approved for modified rates by their lenders, and that their cases were being handled by attorneys at purported law firms. In reality, the defendants did nothing more than fill out Home Affordable Modification Program applications, knowing they could neither pre-approve homeowners for guaranteed modifications nor provide legal services. Read more about this case here and here.
First Universal Lending
In June 2011, the Federal Trade Commission entered into a settlement order with First Universal Lending and its owners, Sean Zausner, David Zausner, and its officer, David J. Feingold, an attorney in Palm Beach Gardens, Florida. Feingold and his companies charged consumers up to $7,000 in up-front fees for their supposed loan modification services, promising to perform services such as obtaining loans, loan restructuring, and credit extensions but failing to even return homeowners’ calls. They even tried to convince homeowners to stop paying their mortgages, claiming that lenders would only negotiate if the homeowners were at least a few months behind on their payments. Read more and see the complaint. Pursuant to the settlement, the defendants are banned from performing any mortgage loan modification and foreclosure relief services and were ordered to pay more than $18 million to an FTC-administered fund to refund victims of these scams. See the settlement. In August 2012, the FTC mailed more than 13,000 refund checks to consumers allegedly wronged by First Universal Lending.
Alan Tikal and KATN
In September 2014, following a joint prosecution by the United States Attorney’s Office for the Eastern District of California and the California Attorney General’s Office, Alan Tikal of Brentwood, California was found guilty of 11 counts of mail fraud and one count of money laundering. Over the course of three and a half years, Tikal operated KATN, also known as KATN Trust. Tikal victimized homeowners, many of whom did not speak English, promising reductions of 75 percent of their outstanding mortgage debt, while fraudulently putting himself forth as a registered private banker with a line of credit enabling him to pay off homeowners’ mortgages. More than $2,500,000 of the $5.8 million homeowners paid to Tikal and his associates was paid into accounts controlled by Tikal and his family, while many of those homeowners stopped making payments on their mortgages and went into foreclosure. Read more.
Prime Legal Plans, American Legal Plans and Reaching U Network
The defendants behind this mortgage assistance relief scheme marketed services under a variety of names including Prime Legal Plans, American Legal Plans and Reaching U Network. Claiming that “80 percent of mortgages contain some fraud,” the defendants charged consumers up to $750 per month for “forensic audits” of consumers’ mortgage loan documents to determine if their lender complied with the law, and alleged that the results of these audits would be used to save the consumers’ homes and negotiate more favorable loan terms. The defendants also told consumers that they would be assigned an expert mortgage foreclosure defense attorney in their state who would “halt the foreclosure process” and save their homes. But rather than helping consumers, the defendants delivered little or no help, often driving homeowners deeper into debt. In January 2014, the Federal Trade Commission obtained a $25 million dollar judgment against these defendants that also prohibited them from engaging in any debt relief services in the future. Read more.
Charles Head and Head Financial Services
In September 2014, Charles Head of Pittsburgh and formerly of California, was sentenced to 35 years in prison following his prosecution in federal court in California. The evidence at trial established that Head and his colleagues solicited homeowners facing foreclosure by promising to help them avoid foreclosure and improve their credit. Instead they “led victims to complete transactions that substituted straw buyers for the victim homeowners on the titles of the properties without the homeowners’ knowledge.” As a result, these victims “were left with no home, no equity, and with damaged credit ratings.” Read more. Over two and a half years, the defendants “obtained over $90 million in fraudulent loans and, caused estimated losses of over $50 million, and stole title to over 300 homes.” Another defendant, Jeremy Michael Head, was sentenced in October 2014 to 10 years for his role in the nationwide foreclosure rescue scam. Read more.
American Mortgage Consulting Group and Home Guardian Management Solutions
Under the name American Mortgage Consulting Group and Home Guardian Management Solutions, the defendants operating this mortgage assistance relief scheme falsely claimed to be affiliated with the United States Government, posed as attorneys when they were not, and promised to provide substantial relief from unaffordable mortgage payments for an upfront fee starting at $1,495. The defendants used telemarketing to target distressed homeowners and, during these unsolicited calls, claimed to be paid by the federal government to assist consumers to obtain “Home Saver” grants. In fact, the defendants did little or nothing to help consumers after collecting the hefty upfront fee and refused to provide refunds when requested, even though they advertised that they would provide full refunds if unsuccessful. They also deceptively instructed consumers to stop communicating with their loan servicing companies. The Federal Trade Commission obtained a $514,910 final judgment and order against these defendants that also prohibited them from engaging in mortgage assistance relief services in the future. Read more.
Rory M. Alarcon
Rory M. Alarcon was a New York attorney who ran a number of mortgage modification businesses such as RMA Legal Network, Alarcon Law Group, Alarcon & Associates, Alarcon Law Firm and R.A. Legal Group. More than 70 consumers filed complaints of professional misconduct against him, alleging that they were defrauded by one or more of these mortgage modification businesses. They also alleged that Alarcon entered into improper retainer and fee agreements with consumers through these entities, improperly practiced law under trade names, failed to adequately supervise employees at these entities and shared legal fees with non-lawyers. The NY Appellate Division took away Rory Alarcon’s right to practice law on January 22, 2014.
Chance Edward Gordon and the Gordon Law Firm
The federal Consumer Financial Protection Bureau brought an action to stop a nationwide loan modification scheme that preyed on distressed homeowners by promising relief from unaffordable mortgage payments and foreclosure. Chance Edward Gordon and his company, The Gordon Law Firm, P.C., ran a loan modification operation together with Michael Pessar and his two companies, Division One Investment and Loan, Inc. and Processing Division, LLC. The defendants drew consumers into their scheme through mailers, phone calls, and websites, falsely promising to secure relief for struggling homeowners. They falsely suggested that they were affiliated with government entities and programs designed to assist homeowners. They also collected advance fees from consumers ranging from $2,500 to $4,500. In January 2013, the CFPB obtained a final judgment and order requiring defendants to pay $10,000,000 and enjoining them from advertising or selling mortgage assistance relief services. Read more.
Glen Alan Ward
In April 2013, Glen Alan Ward entered into a plea agreement with the United States Attorney’s Offices for the Central and Northern Districts of California and the Criminal Division of the U.S. Department of Justice. Ward sought out homeowners at risk of foreclosure via mail and advertisements. He offered to delay their foreclosure proceedings as long as homeowners paid him a $700 monthly fee. Accessing a public bankruptcy database, Ward retrieved the name of a debtor who had recently filed a bankruptcy petition, and directed homeowners to record a grant deed transferring a tiny interest in their distressed home to the debtor. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, a notarized grant deed and a cover letter to the homeowner’s lender, directing it to stop the impending foreclosure sale due to the bankruptcy. Ward admitted collecting more than $1.2 million dollars from homeowners for these illegal foreclosure-delay services, which delayed the foreclosure sales of approximately 824 distressed properties using at least 414 bankruptcies filed in 26 judicial districts. Ward was sentenced to 11 years in federal prison. Read more and view the Plea Agreement.
Enlightened LLC operated under the names A.M.T. Auditing Services, LLC and Mortgage Auditing Program. The Illinois Attorney General sued these companies in December 2012 for falsely representing that their “audits” of consumers’ mortgages found misapplied payments and errors that would help consumers receive lower monthly payments on their mortgage loans. The lawsuit alleged that defendants falsely claimed they would refund the upfront fee paid by the consumer if no errors were found during the review. However, the company made it almost impossible to obtain a refund. In fact, the company and its employees had no expertise in mortgage lending or servicing and relied entirely on third party software to discover errors. The lawsuit requests the court prohibit the companies from operating in Illinois, void any pending contracts with consumers and provide restitution. Read more.
Search to see if a company you are working with is a government-vetted provider of mortgage assistance services.
If you suspect any company or individual of engaging in foreclosure rescue scams, immediately report it to the New York State Attorney General’s Office.