FROM: U.S. FEDERAL TRADE COMMISSION
Mortgage Relief Pitchmen Settle FTC Charges That They Deceived Consumers
‘Danielson Law Group,’ Others Preyed on Consumers in Financial Distress
A group of Utah-based defendants claiming to be legal experts in loan modifications have settled Federal Trade Commission charges that they broke the law by conning consumers into paying hefty fees for worthless mortgage relief services. The five proposed orders settling the FTC’s charges ban the defendants, led by Philip J. Danielson and his company, Danielson Law Group, from offering mortgage assistance relief services and from participating in the debt relief industry.
“It’s troubling when anyone takes advantage of homeowners in financial distress,” said Jessica Rich, Director of the Bureau of Consumer Protection. “This scam is particularly offensive because it used an attorney’s legal credentials to create a facade of authenticity.”
The FTC filed its complaint in July 2014, as part of a multi-agency federal and state law enforcement sweep targeting operations that fraudulently pitched loan modifications to consumers. At the FTC’s request, a U.S. district court temporarily halted the operation, which promised legal help to consumers to avoid foreclosure or get relief from unaffordable mortgages but then did little or nothing to help. The court order froze the defendants’ corporate and personal assets pending litigation of the case.
According to the Commission, the defendants lured consumers into paying $500 to $3,900 by falsely promising that attorneys would negotiate loan modifications that would substantially reduce the consumers’ mortgage payments. The defendants touted a success rate that exceeded 90 percent purportedly based on their legal expertise and a pre-qualification process that identified clients that they knew they could help. The complaint also alleged that the defendants used the name Danielson Law Group and other attorney or law firm names to look like they had lawyers all over the country, even though many consumers never met or spoke to an attorney.
The FTC charged the defendants with violating the FTC Act and the Mortgage Assistance Relief Services (MARS) Rule, now known as Regulation O. The Rule bans mortgage foreclosure rescue and loan modification service providers from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.
Under the proposed settlements announced today, the defendants are banned from participating in the mortgage relief and debt relief industries, and are prohibited from misrepresenting various features of any product or service or making advertising claims that are unsupported by competent and reliable evidence.
The proposed settlements also impose a $28.6 million judgment against all the defendants, reflecting the total amount of fees taken in by the scheme. The proposed judgment will be suspended as to the individual defendants provided they surrender certain of their assets, including a $200,000 house in Utah as required by the settlement orders. If it is later determined that any defendant provided false financial information to the FTC, the full amount of the judgment against them will become due. The proposed settlement also requires relief defendant April Norton to turn over unearned ill-gotten gains that she received from the scheme. The full judgment remains in effect against the corporate defendants.
Today’s settlements also resolves a contempt action the FTC concurrently filed against two individuals named in this case – Philip J. Danielson and Tony D. Norton -- and four companies they controlled, Philip Danielson, LLC; Foundation Business Solutions, LLC; Direct Results Solutions, LLC; and Strata G Solutions, LLC, for violating a 2010 court order in a phony work-at-home scheme that falsely claimed ties to Google Inc.
After a court shut down that scam and prohibited the defendants from making deceptive claims, Danielson and Norton turned their sights to preying on vulnerable homeowners in violation of that order, alleged the FTC. The settlement subjects the contempt defendants to a complete ban from telemarketing activities.
For consumer information about avoiding mortgage and foreclosure rescue scams, see Home Loans.
The Commission vote approving each of the five proposed stipulated final orders was 5-0. They were filed in the U.S. Court for the District of Nevada.
NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.
Showing posts with label MORTGAGE RELIEF. Show all posts
Showing posts with label MORTGAGE RELIEF. Show all posts
Sunday, February 8, 2015
Thursday, January 16, 2014
PHONY MORTGAGE RELIEF SCAM GETS DEFENDANTS BANNED FROM BUSINESS
FROM: FEDERAL TRADE COMMISSION
Defendants in Phony Mortgage Relief Scheme to Pay Nearly $3.6 Million; Orders Ban Them from Mortgage Relief Business
The South Florida-based defendants in an alleged mortgage relief scam will surrender their assets and be banned permanently from providing mortgage relief and debt relief services to consumers under a settlement with the Federal Trade Commission. This settlement represents the FTC’s largest judgment to date against a purported mortgage assistance relief provider.
In 2012, as part of the Distressed Homeowner Initiative, a multi-agency federal enforcement crackdown, the FTC charged 11 companies and five individuals with running an illegal mortgage relief scheme, which operated under various names, including Prime Legal Plans. Using Reaching U Network, a sham non-profit front, and a maze of other companies, the scheme reeled in consumers with false promises that enrollment would save their homes from foreclosure or result in lower mortgage payments. The FTC obtained a court order shutting down the operation and freezing the defendants’ corporate and personal assets pending settlement of the case.
“Rather than make good on their promise to offer people relief from mortgage trouble, these schemers put their targets even further behind financially,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “They broke the law by taking money upfront and making false promises.”
The FTC charged that the defendants promised consumers that they would prevent foreclosure or significantly lower their mortgage payments by conducting audits of consumers’ loans and providing access to full-service, expert legal representation to fight their lenders. The defendants, who marketed their programs in English and Spanish through a national outbound telemarketing campaign, allegedly told consumers that “80 percent of mortgages contain some fraud” and, in some cases, that even a small error in their loan documents could nullify the mortgage. The defendants also allegedly 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 instead of helping consumers, the defendants charged them illegal advance fees ranging from $595 to $750 per month, while delivering little or no help and driving them deeper into debt. In addition to alleging that the defendants deceived consumers, the FTC charged that the scheme violated the Mortgage Assistance Relief Services Rule’s ban on advance fees for mortgage relief. The FTC also asserted that the Defendants placed numerous calls to numbers listed on the national Do Not Call Registry.
Under the settlements announced today, the defendants are banned from participating in the mortgage relief and debt relief industries, and are prohibited from misrepresenting various features of any product or service or making advertising claims that are unsupported by competent and reliable evidence. They also are prohibited from placing unsolicited calls both to numbers listed on the Do Not Call Registry and to any number in an area code for which they have not paid the fee to access the list of numbers on the Do Not Call Registry.
The settlements require the Defendants to pay nearly $3.6 million to redress consumer victims. Under the terms of the settlements:
A $25.1 million judgment, reflecting the total amount of fees taken in by the scheme, is imposed on Derek Radzikowski, Jason Desmond, Prime Legal Plans LLC, and five other corporate defendants. The judgment will be suspended when they surrender their assets – an estimated $3.5 million. The order also resolves allegations against Desmond’s wife, relief defendant Shelie Desmond, by requiring her to turn over an estimated $110,000 in unearned ill-gotten gains that she received from the scheme.
$1,428,658 judgments are imposed on Andrew Primavera and Lazaro Dinh and four corporate defendants. The judgments, entered August 22, 3013, reflect these defendants’ ill-gotten gains, and were suspended after they surrendered their assets: about $20,0000 from Dinh and $1,600 from Primavera. The Dinh order also resolved allegations against two relief defendants: the San Lazaro Irrevocable Life Insurance and its trustee, Dinh’s sister Maria Soltura. The $336,929 judgment against Soltura and the Trust was suspended when the FTC received the $1,575 that was frozen in the trust’s bank account when the FTC shut down the operation last year.
A $392,215 judgment was imposed against Christopher N. Edwards and Reaching U Network, Inc., and a $102,417 judgment was imposed upon Kim E. Landolfi. The judgments, entered May 22, 2013, reflect these defendants’ ill-gotten gains and were suspended when they surrendered frozen assets to the FTC: approximately $950 from Edwards and Reaching U Network, Inc. and $40,000 from Landolfi.
If it is later determined that a defendant provided false financial information to the FTC, the full amount of the judgment against that defendant will become due.
Under federal law, foreclosure rescue and loan modification service providers are banned from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable. For consumer information about avoiding mortgage and foreclosure rescue scams, see this FTC material.
The Commission vote approving the consent decree for Radzikowski, Desmond, Prime Legal Plans LLC; Freedom Legal Plans, LLC; Frontier Legal Plans, LLC; American Hardship, LLC; Legal Servicing and Billing Partners LLC; and Back Office Support Systems LLC was 4-0. The consent decree was filed in the U.S. District Court for the Southern District of Florida and entered by the court on December 27, 2013.
NOTE: Consent decrees have the force of law when approved and signed by the District Court judge.
Defendants in Phony Mortgage Relief Scheme to Pay Nearly $3.6 Million; Orders Ban Them from Mortgage Relief Business
The South Florida-based defendants in an alleged mortgage relief scam will surrender their assets and be banned permanently from providing mortgage relief and debt relief services to consumers under a settlement with the Federal Trade Commission. This settlement represents the FTC’s largest judgment to date against a purported mortgage assistance relief provider.
In 2012, as part of the Distressed Homeowner Initiative, a multi-agency federal enforcement crackdown, the FTC charged 11 companies and five individuals with running an illegal mortgage relief scheme, which operated under various names, including Prime Legal Plans. Using Reaching U Network, a sham non-profit front, and a maze of other companies, the scheme reeled in consumers with false promises that enrollment would save their homes from foreclosure or result in lower mortgage payments. The FTC obtained a court order shutting down the operation and freezing the defendants’ corporate and personal assets pending settlement of the case.
“Rather than make good on their promise to offer people relief from mortgage trouble, these schemers put their targets even further behind financially,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “They broke the law by taking money upfront and making false promises.”
The FTC charged that the defendants promised consumers that they would prevent foreclosure or significantly lower their mortgage payments by conducting audits of consumers’ loans and providing access to full-service, expert legal representation to fight their lenders. The defendants, who marketed their programs in English and Spanish through a national outbound telemarketing campaign, allegedly told consumers that “80 percent of mortgages contain some fraud” and, in some cases, that even a small error in their loan documents could nullify the mortgage. The defendants also allegedly 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 instead of helping consumers, the defendants charged them illegal advance fees ranging from $595 to $750 per month, while delivering little or no help and driving them deeper into debt. In addition to alleging that the defendants deceived consumers, the FTC charged that the scheme violated the Mortgage Assistance Relief Services Rule’s ban on advance fees for mortgage relief. The FTC also asserted that the Defendants placed numerous calls to numbers listed on the national Do Not Call Registry.
Under the settlements announced today, the defendants are banned from participating in the mortgage relief and debt relief industries, and are prohibited from misrepresenting various features of any product or service or making advertising claims that are unsupported by competent and reliable evidence. They also are prohibited from placing unsolicited calls both to numbers listed on the Do Not Call Registry and to any number in an area code for which they have not paid the fee to access the list of numbers on the Do Not Call Registry.
The settlements require the Defendants to pay nearly $3.6 million to redress consumer victims. Under the terms of the settlements:
A $25.1 million judgment, reflecting the total amount of fees taken in by the scheme, is imposed on Derek Radzikowski, Jason Desmond, Prime Legal Plans LLC, and five other corporate defendants. The judgment will be suspended when they surrender their assets – an estimated $3.5 million. The order also resolves allegations against Desmond’s wife, relief defendant Shelie Desmond, by requiring her to turn over an estimated $110,000 in unearned ill-gotten gains that she received from the scheme.
$1,428,658 judgments are imposed on Andrew Primavera and Lazaro Dinh and four corporate defendants. The judgments, entered August 22, 3013, reflect these defendants’ ill-gotten gains, and were suspended after they surrendered their assets: about $20,0000 from Dinh and $1,600 from Primavera. The Dinh order also resolved allegations against two relief defendants: the San Lazaro Irrevocable Life Insurance and its trustee, Dinh’s sister Maria Soltura. The $336,929 judgment against Soltura and the Trust was suspended when the FTC received the $1,575 that was frozen in the trust’s bank account when the FTC shut down the operation last year.
A $392,215 judgment was imposed against Christopher N. Edwards and Reaching U Network, Inc., and a $102,417 judgment was imposed upon Kim E. Landolfi. The judgments, entered May 22, 2013, reflect these defendants’ ill-gotten gains and were suspended when they surrendered frozen assets to the FTC: approximately $950 from Edwards and Reaching U Network, Inc. and $40,000 from Landolfi.
If it is later determined that a defendant provided false financial information to the FTC, the full amount of the judgment against that defendant will become due.
Under federal law, foreclosure rescue and loan modification service providers are banned from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable. For consumer information about avoiding mortgage and foreclosure rescue scams, see this FTC material.
The Commission vote approving the consent decree for Radzikowski, Desmond, Prime Legal Plans LLC; Freedom Legal Plans, LLC; Frontier Legal Plans, LLC; American Hardship, LLC; Legal Servicing and Billing Partners LLC; and Back Office Support Systems LLC was 4-0. The consent decree was filed in the U.S. District Court for the Southern District of Florida and entered by the court on December 27, 2013.
NOTE: Consent decrees have the force of law when approved and signed by the District Court judge.
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