Friday, December 18, 2015

Feds Pass On Criminal Prosecution Of SoCal Loan Modification Racket Accused In $2.7+ Million Ripoff; Settle For FTC Enforcement Action To Score Shutdown; Defendants Promise To Never Run Financial Scams Again, Agree To Surrender Certain Assets In Exchange For Avoiding Payment Of Full Restitution To Fleeced Victims (Big Deal!)

The Federal Trade Commission recently announced:
  • Four mortgage modification scammers, Brian Pacios, Chad Caldaronello, Justin Moreira and Derek Nelson will be banned from selling debt relief products and services under settlements resolving Federal Trade Commission charges that they deceived homeowners facing foreclosure.

    The settlements stem from a complaint the FTC filed against Pacios, Caldaronello, Moreira, Nelson, Denny Lake, and relief defendant Cortney Gonsalves in 2015, alleging that, doing business as HOPE Services and HAMP Services, they promised consumers help getting their mortgages modified, but instead stole their mortgage payments, leading some to foreclosure and bankruptcy. Pacios’s settlement also resolves an FTC contempt action against him for violating a 2013 court order that prohibited him from mortgage relief activities.

    “These rip-off artists took struggling homeowners’ last dollars, but we’ve shut down their destructive and illegal schemes,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Now, in addition to financial judgments, the court has permanently banned them from the industries and practices they exploited.”

    Under stipulated court orders [], Pacios, Caldaronello, Moreira and Nelson are also prohibited from misrepresenting any product or service, profiting from customers’ personal information, and failing to properly dispose of it. Pacios, Caldaronello, and Moreira are banned from telemarketing, and Pacios and Caldaronello are also banned from selling credit-related financial products and services and barred from using aliases. Moreira and Nelson are also prohibited from using material misrepresentations and unsubstantiated claims to sell financial products and services, and Nelson is barred from telemarketing without maintaining records stipulated in the order.

    The orders against Pacios and Caldaronello impose a judgment of more than $2.7 million, which represents the total amount consumers paid. The order against Moreira imposes the same judgment, which will be suspended upon the surrender of certain assets. The full judgment against Moreira will become due immediately if he is found to have misrepresented his financial condition. The order against Nelson imposes a judgment of $859,839, which will be suspended upon the surrender of certain assets, but due immediately if he is found to have misrepresented his financial condition.

    The order against Gonsalves, a relief defendant who profited from the scheme, imposes a judgment of $218,768, which represents the amount Gonsalves received from the scam. Litigation against Lake continues.
Source: FTC Action: Scammers Banned from Mortgage Relief Business, Telemarketing.

Editorial Note: This action, which essentially constitutes little more than a slap on the hand for the scammers, apparently reflects the fact that the Feds just don't have sufficient enough resources to go after every single loan modification racket with criminal prosecution, so they have to go after some of the ripoff artists with civil lawsuits, shut them down, take whatever money they have left from the ripoff, get empty promises from them that they'll never do wrong again, and let them go without prison time.

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