Thursday, May 04, 2017

Trio Get Slammed by Federal Jury For Running S. California-Based Loan Modification Scam That Fleeced Unwitting Homeowners In Foreclosure Out Of At Least $10 Million

From the Office of the U.S. Attorney (Alexandria, Virginia):
  • Three co-conspirators who operated a nationwide, multi-year “home mortgage modification” fraud that scammed hundreds of victims out of at least $10 million were convicted today [April 21] by a federal jury.

    “These defendants scammed hundreds of individuals and families who were trying desperately to save their homes,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Their crimes were rooted in dishonesty and greed, and they shamelessly enriched themselves at their victims’ expense. I am very pleased with the convictions and want to commend the efforts of the Assistant United States Attorneys and our investigative partners for their terrific work on this important and complex case.”

    According to court records and evidence presented at trial, Sammy Araya, Michael Henderson, and Jen Seko, all from the greater Los Angeles area, operated a large-scale “home mortgage modification” scam that victimized vulnerable individuals and families across the country for several years.
    ***
    According to court records and evidence presented at trial, after being contacted by another member of the conspiracy and told that their mortgage modification had been approved, the victim homeowner would be told that their lender required a “reinstatement fee,” usually in the amount of thousands of dollars. Victims were also told that they were required to make several “trial” mortgage modification payments. After these so-called “trial payments” were completed, their modification would be complete and their new lower mortgage payment would become permanent for the life of the loan.
    ***
    The victims of this scheme dutifully sent their payments to the fraudulent entities as instructed by the conspirators, only to discover that they had not been granted a mortgage modification by their lenders. When victims confronted the members of the conspiracy about this fact, the conspirators would make lulling statements designed to reassure the victims, such as telling them that the mortgage modification process takes time, and that they were dealing with individuals at a higher level at the bank than the lender representatives with whom the victims had spoken.

    In reality, however, the members of the conspiracy were simply diverting the victims’ payments for their own personal benefit, without doing anything to assist in modifying the victims’ mortgages. Araya, the ringleader of the scheme, used the proceeds of the fraud to purchase expensive vehicles, a racehorse, and a variety of luxury goods, as well as to fund his personal travel and a reality television show he produced called “Make It Rain.TV.”

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