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Tag: foreclosure rescue scams

  • BULLETIN: Now, A Web-Based ‘Auto Loan Modification’ Scam, FTC Alleges; California Firms Accused Of Targeting Car Borrowers Facing Repossession And Putting Them Deeper In The Hole

    Examples of promotional slogans used on the Hope for Car Owners website: Source: FTC

    BULLETIN: The Federal Trade Commission has gone to federal court in the Eastern District of California, alleging that several individuals and companies were running separate, web-based scams in which borrowers were told they could avoid vehicle repossessions by paying upfront fees to the accused scammers and not making payments on their car loans.

    The scams were tied to telemarketing operations in which prospects seeking to avoid repossessions were solicited for up-front fees. One set of scammers told consumers to “hide [their] car[s] to avoid repossession,” the FTC charged.

    A top FTC official described the alleged repossession-avoidance scam as the automotive equivalent of foreclosure-rescue scams targeted at distressed homeowners.

    “Now that the FTC and its partners have stopped hundreds of mortgage loan modification scams, fraud artists are moving to another loan modification scam, preying on consumers who are behind on their auto loan payments and facing repossession,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “Despite promising to substantially lower consumers’ monthly payments, these schemes charge hundreds of dollars in up-front fees, leaving financially distressed consumers in worse shape than when they began.”

    Charged in one of the alleged capers were Michael Kamfiroozie; Naythem Nafso; Kore Services LLC of San Diego (doing business as Auto Debt Consulting and Car Loans Modification); and NAFSO VLM Inc. of Roseville (doing business as Vehicle Loan Mod).

    Charged in an alleged separate scam were Patrick Freeman and Hope for Car Owners LLC of Folsom and Roseville.

    Freeman, the FTC charged, operated carloanmod.com, hopeforcarowners.com hope4carowners.com and hope4carowners.org.

    Among other things, the FTC charged, the purported Freeman programs were positioned as “Consumer Stimulus & Bailout ASSISTANCE!”

    Consumers were instructed to “Stop overpaying for a depreciating LIABILITY!” the FTC charged.

    The alleged scam involving Kamfiroozie, Nafso and the Kore-related entities used websites such as carloansmodification.com, autodebtconsulting.com, vehicleloanmod.com, nafsovlm.com, theautomodgroup.com and automobileadvocates.com, the FTC said.

    From the autodebtconsulting website: Source: FTC

  • BULLETIN: FLORIDA — AGAIN: Destroying Hope Through Wordplay: 4 Men Arrested In Alleged Loan-Modification Scam That Used ‘HOPE’ As Acronym; Fraudsters Sucked More Than $3 Million From Distressed Homeowners In Part By Claiming To Be Nonprofit, Feds Say

    HOPE is a scam operating as a purported nonprofit, federal prosecutors said.

    BULLETIN: Federal agents from the Special Inspector General’s Office for the Troubled Asset Relief Program (SIGTARP) have arrested four Florida men on charges they collected millions of dollars from financially distressed homeowners in a loan-modification scam that claimed to be a legitimate nonprofit business.

    Arrested this morning in Florida on federal criminal charges filed in Boston were Christopher S. Godfrey, 42, of Delray Beach; Dennis Fischer, 40, of Highland Beach; Vernell Burris Jr., 51, of Boynton Beach; and Brian M. Kelly, 34, of Boca Raton.

    South Florida has been plagued by various fraud schemes. Federal prosecutors in Washington said the Florida men were charged with conspiracy, wire fraud, mail fraud and misuse of a government seal in the operation of an entity known as Home Owners Protection Economics Inc., which used the acronym of HOPE.

    In reality, prosecutors said, HOPE was a scam linked to a telemarketing operation designed to pick the pockets of the very customers HOPE claimed it was helping.

    Separately, the Better Business Bureau lists 177 complaints against HOPE and a previous action filed against the firm, Godfrey and Fischer by the office of the Florida attorney general.

    Godfrey was the president of HOPE, and Fischer was vice president and treasurer.  Burris trained and managed HOPE telemarketers,  and Kelly was a key phone pitchman who also trained telemarketers, federal prosecutors said.

    Among the allegations is that HOPE collected at least $3 million in illegal up-front payments from distressed homeowners by arranging for telemarketers to lie to prospects.

    A website apparently linked to HOPE appears to have used hyphens to spell out its name in this fashion: H-OP-E.com, according to research by the PP Blog. The domain registration is hidden behind a proxy, but a “Contact” page on the site lists a building address in Delray Beach associated with at least two of the defendants arrested today.

    HOPE appears to have formed its website name with hyphens and letters from the word "hope" while claiming nonprofit status. Federal prosecutors said today that HOPE was a scam linked to a telemarketing operation.

    Home Owners Protection Economics Inc. appears to operate in Florida as a purported nonprofit under a nonplural variation of its name — i.e., Home Owner Protection Economics Inc. in which no “s” is used in the word “Owner.” Godfrey and Fischer are listed in Florida records as “directors” of the firm at 1801 S. Federal Highway, Suite 247, Delray Beach.

    The same address appears on the H-OP-E website registered behind a proxy. The firm also appears to have used the word “HOPE” as part of a phone number.

    “The indictment alleges that from January 2009 through May 2011, the defendants made, and instructed their employees to make, a series of misrepresentations to induce financially distressed homeowners looking for a federally-funded home loan modification to pay HOPE a $400-$900 up-front fee in exchange for HOPE’s home loan modifications, modification services and ‘software licenses,’” prosecutors said today.

    “According to the indictment, these misrepresentations included claims that homeowners were virtually guaranteed, with HOPE’s assistance, to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of TARP and is a federally-funded mortgage assistance program.  Additional misrepresentations to homeowners included that HOPE was affiliated with the homeowner’s mortgage lender, that the homeowner had been approved for a home loan modification, that homeowners could stop making mortgage payments while they waited for HOPE to arrange their loan modification and that HOPE would refund the customer’s fee if the modification was not successful.  HOPE also claimed that it operated as a non-profit organization.”

    In reality, prosecutors said, “HOPE instructed customers to fill out the application and submit it to their mortgage lender.  According to the indictment, the HOPE customers who did use the provided forms to apply on their own for loan modifications had no advantage in the application process, and, in fact, most of their applications were denied.  Through these misrepresentations, HOPE was able to persuade thousands of homeowners collectively to pay more than $3 million in fees to HOPE. ”

    See BBB report.

  • ‘Sovereign Citizen,’ 81, Arrested In Arizona On Federal Charges Of Making False Claims; Marshall Home Hawked ‘Foreclosure Rescue’ Scheme And Sought To Place United States In Bankruptcy, Feds Say

    Marshall Home, 81, charged customers $500 as part of a purported Arizona-based service to halt mortgage-foreclosure proceedings through an entity known as “Individual Rights Party; Mortgage Rescue Service,” federal prosecutors said.

    But his service was a scam in which Home, a Tucson resident and self-described “sovereign citizen,” insisted he had a valid claim of more than $3 billion against the government, prosecutors said.

    Home was arrested Friday on charges of false claims in bankruptcy. Prosecutors said he “filed or caused to be filed 173 false claims” against the United States in bankruptcy court and filed a fraudulent petition on March 16 in Arizona that sought to put the United States itself into involuntary bankruptcy.

    All in all, prosecutors said, Home’s false claims totaled more than $2.5 trillion.

    “The anti-government paranoia of so-called ‘sovereign citizens’ becomes a self-fulfilling prophecy when they use their false claims and fraudulent practices to rip-off others,” said U.S. Attorney Dennis K. Burke.

    Some “sovereign citizens” have been linked to credit-repair schemes and say they do not believe U.S. law applies to them.

    Home became involved in the bankruptcy of Giordano’s, a Chicago pizza chain and eatery. The Chicago Tribune reported last week that a judge tossed Home from the proceeding for being disruptive.

  • KABOOM! (Florida — Again): FTC Hits Bogus Credit-Repair Firm With $14 Million Judgment; Alleged Schemers Lose Cars, Real Estate In Miami-Dade, Broward Counties

    BULLETIN: (UPDATED 11:27 A.M. EDT (U.S.A.) The Federal Trade Commission has lowered the boom on Clean Credit Report Services Inc. of Florida and three individuals associated with the firm.

    In a settlement from a case brought in October 2008, the FTC has obtained a judgment of $14.4 million. The defendants must surrender their assets, including about $165,000 in frozen funds.

    The settlement agreement also includes “any proceeds received from selling their six commercial and three residential properties under foreclosure in Florida; commercial property in Bogota, Colombia; a 1992 Mercedes S300; and a 1997 Chevrolet Venture.”

    In total, Clean Credit Report Services Inc., Ricardo A. Miranda, Ruthy Villabona and Daniel R. Miranda are giving up “two cars, three houses, and six commercial properties in Broward and Miami-Dade counties in Florida, and in Bogota, Colombia,” the FTC said.

    The defendants admitted no wrongdoing.

    Clean Credit Report operated from North Miami, according to court filings. The company used a website (now defunct), radio ads and televisions ads to fleece customers, the FTC charged.

    Here is how the company pitched its offer on its website, according to the FTC:

    “DEROGATORY ACCOUNTS ARE DISPUTED CCRS will help you to legally dispute all your negative remarks directly with the 3 credit reporting agencies.”

    ***

    “Get ready to see DELETED, DELETED, DELETED, DELETED, DELETED, on the responses from the credit reporting agencies.”

    The alleged schemers targeted people going through rough financial times and illegally charged them upfront fees, the FTC charged.

    They also fraudulently claimed that they could remove accurate and timely information from credit reports, charging $400 to do so and debiting the amount from customers’ bank accounts, the FTC said.

    The agency noted in court filings that eight of nine properties the defendants will be giving up already are in foreclosure.

    Florida has one of the highest foreclosure rates in the United States. Certain MLM and Internet Marketing companies — in efforts to recruit financially strapped customers — routinely use the word “foreclosure” in sales pitches, positioning the business “opportunity” as the remedy for the foreclosure problem.

    Such ads often feature a dire drum beat, as images of people down on their luck flash on the screen. Biz Ad Splash, a failed autosurf, used such an ad. The company disappeared with an unknown amount of money sent in by members earlier this year — and then issued an announcement that it was “sad” about the development.

    Biz Ad Splash and it dire drum beat and “foreclosure” message targeted members of Florida-based AdSurfDaily, which was implicated in a Ponzi scheme by the U.S. Secret Service in August 2008. More than $80 million was seized in the ASD case.

    Some ASD members now are recommending a Florida-based program called MPB Today, which also uses a dire drum beat and the word “foreclosure” in its sales pitch.

    It is known that some members of ASD also were in the credit-repair business. One ASD supporter claimed in court filings that he could undermine a bank’s interest in a foreclosure case by filing “twenty-one dollars in silver coinage” at a courthouse in Missouri.

  • UPDATE: Delaware AG Beau Biden Says Credit USA Pyramid Scheme Cost Two State Residents More Than $100,000; Victims Asked To Contact Prosecutors

    The alleged Credit USA Inc. multilevel-marketing (MLM) pyramid scheme cost two Delaware residents more than $100,000, Attorney General Beau Biden said.

    Biden has asked other potential victims to contact his Investor Protection Unit at 302-577-8424.

    A state indictment announced two days ago charged Terrel Alexander, 41, Nicole Alexander, 41, and William Love III, 39, with Racketeering, Conspiracy to Commit Racketeering, Securities Fraud, Theft, Sale of Unregistered Securities and Acting as an Unregistered Broker/Agent.

    Terrel Alexander lists an address in Wilmington, Del. Nicole Alexander, his ex-wife, lists an address in Mount Lauel, N.J., as does Love III.  Although Credit USA was registered in Delaware, the scheme was conducted from headquarters in New Jersey and Pennsylvania, prosecutors said.

    “With [the] indictment we’re holding these defendants accountable for cheating Delawareans out of their money,” Biden said.

    Even as a grand jury in Kent County was handing up the criminal indictments, prosecutors in New Jersey were filing civil allegations against Credit USA for selling unregistered stock and transacting in securities without being registered.

    Delaware prosecutors described each of the defendants as a “principal” of Credit USA. In 2008, the company was named in franchising allegations in Wisconsin amid assertions it offered an investor rights to the entire state for $250,000, including a “non-refundable deposit” of $125,000.

    Credit USA was not authorized to sell franchises in Wisconsin, according to the state Department of Financial Institutions, Division of Securities.

    The Delaware indictment charges that Credit USA purported to offer “credit repair products,” but that the company operated as a “pyramid scheme designed to personally enrich the three defendants.”

    Read information from the FTC on credit-repair scams.

    Supplement your knowledge by reading information from the FTC on mortgage-relief, loan-modification and foreclosure-rescue scams, which sometimes accompany credit-repair schemes.

  • DATA NETWORK AFFILIATES: Churches Have ‘MORAL OBLIGATION’ To Pitch Members On Firm’s ‘Mortgage Reduction’ Program; Purported Data And Cell-Phone Firm Venturing Into Foreclosure-Rescue And ‘Resort’ Businesses

    A multilevel-marketing (MLM) company that positioned itself as a firm that collected data that could be used by law enforcement and the AMBER Alert program to rescue abducted children — and later declared itself the world champion of cell-phone pricing — may be entering the foreclosure-rescue and real-estate businesses, members said.

    News about the purported moves of Data Network Affiliates (DNA) follows on the heels of federal sweeps in which 1,215 defendants were charged criminally in real-estate fraud cases and the FTC banned more than a dozen companies from selling mortgage-relief services.

    One of the firms charged by the FTC was assessed an $11.4 million fine when it was found to be in contempt of court for violating previous sanctions, the FTC said.

    In the FTC cases, enrollees in the purported mortgage-relief programs were charged “up-front fees and made false promises that they could get their loans modified or prevent foreclosure,” the agency said.

    DNA has advised members that it intends to charge a fee of $1,500 and that some affiliates can earn commissions by recruiting hard-hit homeowners into a program known as “DNA Mortgage Reduction.”

    In an email to members, DNA suggested that churches were an excellent place from which to recruit members into the mortgage-reduction program (italics and bold added):

    “DNA Mortgage Reduction is a SUPER BIG HIT… Sorry only for USA Properties for now… Even the smallest package upon the $1500 payment once we know the person has a case… (remember it is 100% free to see if a person qualifies for the program)… Pays a MINIMUM to ALL Affiliates $100 1st level; $5 on levels 2 to 9; and $50 on level 10… Plus the PROS earn up to 100% Matching Bonus…

    “REMEMBER that is the smallest package for homes up to $125,000… There are so many Million Dollar homes out there that qualify and for them the fee is less than ONE MORTGAGE PAYMENT… We estimate that DNA will have tens of thousands of home owners who will purchase this package once they find out they qualify for such… THE SAD NOTE IS: that 9 out of 10 people who do qualify don’t even know this service exist… THAT IS WHERE YOU COME IN… Our DNA Vendor is even offering incentives of $1,000 to $10,000 CASH BONUSES to DNA Affiliates who personally reach multiple sale quantities within a 90 day period…

    “THINK OF ALL THE CHURCHES… They have a MORAL OBLIGATION to let their Church Members know about this DNA OFFER… There are Churches that could turn in 100 to 1000 applications in 30 days… ALWAYS REMEMBER IT IS 100% FREE TO FIND OUT IF YOU HAVE A CASE… Statistics say that 85% of all mortgages written from 1996 to 2006 will qualify…”

    How DNA arrived at the conclusion its $1,500 mortgage-reduction program was a “SUPER BIG HIT” when it appears to be only days old was unclear. Also unclear are how DNA arrived at the conclusion that churches have a “MORAL OBLIGATION” to point members to DNA, how DNA arrived at its estimate that “tens of thousands of home owners” will purchase its package and the source of the “statistics” DNA used when advertising that “85%” of mortgages written between 1996 and 2006 “will qualify.” The name of DNA’s “vendor” also was unclear.

    DNA, which is believed to have no ability to help either law enforcement or the AMBER Alert system and no capacity to deliver cell-phone service despite YouTube claims it had a branding deal with Apple’s IPhone and could offer “unlimited” service for $10 a month  — also recently has pitched members on an “opportunity” called the “DNA Resorts Program,” members said.

    The program also has been referred to by DNA as the “DNA SPA & Resort” program,  which purportedly features a “No Interest Easy 24 Month Payment Plan” of $625 a month. DNA is soliciting members to spend $14,995 on the resorts program, suggesting that some prospects will put the entire amount on a credit card.

    Meanwhile, in an earlier pitch for the purported mortgage-reduction program, DNA suggested applications would be vetted to determine if “Mortgage Compliance Violations” had occurred. (Italics added.)

    “Are you a Victim of Deceptive Predatory Lending Practices?

    “Is your Value of your home UPSIDEDOWN?

    “Find out if you may be a Victim of Mortgage Compliance Violations involving Predatory, Deceptive, Discriminatory and Unfair Lending and Servicing Practices. These Unfair Lending Practices have placed thousands of HOMEOWNERS all over the United States into Non-Affordable Mortgage Programs.”

    DNA, whose domain registration data is hidden behind a proxy in the Cayman Islands but lists a street address in Boca Raton, Fla., on its website, may be venturing into even choppier waters with its mortgage and resort pitches.

    “The possibility of losing your home to foreclosure can be terrifying,” the FTC says. “The reality that scam artists are preying on the vulnerability of desperate homeowners is equally frightening. Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help you save your home. Some are brazen enough to offer a money-back guarantee. Unfortunately, once most of these foreclosure fraudsters take your money, you lose your home, too.”

    Read details about recent mortgage-relief scams targeted by the FTC.

    DNA says it is promoting its mortgage-reduction and resort programs in a webinar and that it believes “9 out of 10 people who attend this upcoming DNA Webinar will say ‘YES’ to DNA.”

    The “one” who says no will be offered the “FREE DNA PSYCHIATRIC DISCOUNT PLAN,” DNA said in an email to members.