More On Central Florida Foreclosure Rescue Operator Peter Porcelli

The Sarasota Herald Tribune reports on how Central Florida foreclosure rescue operator Peter J. Porcelli did business. Porcelli formed Safe Harbour Foundation, which billed itself as a nonprofit group even though it never registered with the IRS for nonprofit status, and used the entity to allegedly arrange usurious loans to homeowners facing foreclosure as a way to save their homes from repossession. As part of the loan arrangement, the homeowners agreed that, in the event of a default on the loan, the lender would be able to exercise an option to buy the financially strapped person's home at below fair market value, an apparent attempt to bypass the foreclosure process and rip off the owner's home equity at the same time. Excerpts from the story:

• [Six] homeowners who used Safe Harbour have filed a $40 million federal lawsuit against the company, accusing the Safe Harbour Foundation, Porcelli and 15 other individuals and companies of stealing their property through illegal loans. [...] "In every case, the title of the homes have been lost or is threatened by foreclosures," said attorney Michael Wasylik, who is representing the homeowners, four of whom are from Sarasota County. "If nothing else, we're confident this lawsuit will restore these people's homes to them."

In an unrelated case, Porcelli was sentenced to 13 years in federal prison last week for wire and mail fraud charges in Illinois in a separate scam. For more, see Desperate to avoid a foreclosure, homeowners say they were scammed.

To view a copy of the lawsuit, see Heise, et al. vs. Porcelli, et al.

Go here for other posts on Peter Porcelli.

For more on equity stripping scams, generally,see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Florida Regulators Shut Down Foreclosure Rescue Operator, Mortgage Brokerage

The Florida Office of Financial Regulation announces:

• The Florida Office of Financial Regulation (OFR) entered an administrative order [Monday] against Safe Harbour Foundation of Florida, Inc., Silverstone Lending, LLC and Peter J. Porcelli, II, of Clearwater, Florida. Safe Harbour Foundation operated as a not-for-profit corporation that aided homeowners facing foreclosure; Silverstone Lending is licensed in Florida as a Mortgage Lender; and Peter Porcelli is President of Safe Harbour Foundation and Principal Representative of Silverstone Lending.

• The OFR’S investigation disclosed that Safe Harbour, Silverstone Lending and Peter Porcelli were participating in a scheme to make loans that contained unauthorized and excessive fees often exceeding 30% of the face amount of the loan, all in violation of Chapter 494, Florida Statutes. The scheme was initiated when Safe Harbour Foundation sent letters to homeowners who were facing foreclosure, offering to help “save their homes from foreclosure”.

For more, see Office Of Financial Regulation Shuts Down Foreclosure Rescue Scheme.

Go here for earlier posts on Peter Porcelli.

Fla. Foreclosure Rescue Operator, Others Tagged With Federal Lawsuit; Allege RICO, Criminal Usury, Conspiracy, TILA Violation; Seek To Void Mortgages

The St. Petersburg Times reports:

• Calvin Lewendowski, a 55-year-old Sarasota house remodeler, turned to the Safe Harbour Foundation last year after he was promised the nonprofit would save his home from foreclosure. Instead, Lewendowski found himself in the jaws of a loan shark. Safe Harbour referred Lewendowski to a second company, Silverstone Lending, which used illegal fees and usurious interest to take away the home, an action Lewendowski called cold-blooded.

• On Friday [October 12], Lewendowski and other victims struck back, filing a $40-million federal lawsuit against 18 individuals and companies, including Safe Harbour, Silverstone Lending and Peter C. Porcelli, a Clearwater businessman who operated the lending business despite being banned by a federal judge in 2004 from offering such credit products to consumers.

• The lawsuit, filed in Tampa by attorney Michael A. Wasylik, tracks a St. Petersburg Times investigation of the questionable loan operation published in May. The suit accuses Porcelli and his associates of engaging in racketeering by making false promises through the mail in order to obtain borrowers' homes through fraud.

• The suit alleges that Porcelli and others arranged bailout loans with usurious rates as high as 500 percent, violated truth-in-lending laws and charged illegal brokerage or servicing fees.

• The plaintiffs seek millions in actual and punitive damages, an injunction declaring usurious loan deals unenforceable and an order restoring ownership of homes to the original owners.

For more, see Victims strike back at shady lenders (The companies promised foreclosure protection only to wind up taking the homes themselves).

For a prior St. Petersburg Times story on Peter Porcelli, who currently awaits an October 29 felony sentencing on an unrelated scam, see Facing new fields of fraud (Guilty in one scam, an Oldsmar man is scrutinized in a high-risk loan scheme that preyed on those facing foreclosure) (5-20-07).

Editor's Note: The typical equity stripping, foreclosure rescue transaction generally involves a home sale by a financially hard-up homeowner, coupled with a leaseback of the home, and an option to repurchase it at a future date. According to the lawsuit (paragraphs 46 through 54) filed in this case, however:

1. the money advanced by the foreclosure rescue operator actually took the form of a loan, and not a home sale with leaseback and repurchase option,
2. while most homeowners needed only a few thousand dollars to avoid foreclosure, loans were arranged that incorporated finance charges, origination fees, and underwriting fees that doubled or tripled the size of the loan,
3. the charges and fees were received by the operators and the others involved in the alleged conspiracy,
4. in some cases, the loans arranged had effective annual interest rates of 500% or greater. In all cases, they exceeded the 45% threshold set in Fla. Stat. Chapter 687 for criminal usury,
5. in addition to the criminally usurious interest rates, the loans incorporated a purchase option for the benefit of the lender, effective upon the default of the borrower; the option purchase price was calculated by subtracting the current equity in the home from the estimated value of the home, thereby allowing the purported option purchaser to obtain all the equity in the home by simply paying off any liens senior to its own, with little or no money going to the homeowner. Because of the criminal usury, the homeowners found it difficult or impossible to avoid default, thereby triggering the lender’s option and effectively forfeiting all of the homeowner’s equity. One member of the alleged conspiracy was an attorney who aided the operators in enforcing these purchase options by filing lawsuits for specific performance in state court against the financially strapped homeowners.

To view a copy of the lawsuit, see Heise, et al. vs. Porcelli, et al. (U.S. District Court, M.D. Fla.).

Representing the homeowners is Michael Alex Wasylik, Esq., with the law firm Ricardo & Wasylik PL, Dade City, Florida.

For story update, see Scam artist wants a break (Peter Porcelli says he deserves leniency for his cooperation).

For more on equity stripping scams, generally,see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

FTC Files Suit Against Central Florida Foreclosure Rescue Operator

The Federal Trade Commission announced last week:

• In an ongoing effort to crack down on businesses that prey upon homeowners facing foreclosure, the Federal Trade Commission has charged six businesses and three individuals with violating the Home Ownership and Equity Protection Act (HOEPA), the FTC Act, and the Truth in Lending Act (TILA) by enticing homeowners into high-cost, short-term loans secured by an additional mortgage on their homes. The FTC will seek to bar the defendants from further violations, make them forfeit their ill-gotten gains, and stop collection and foreclosure actions or efforts to seize or transfer properties.

• The defendants are Safe Harbour Foundation of Florida, Inc., Silverstone Lending, LLC, Silverstone Financial, LLC, Southeast Advertising, Inc., Keystone Financial, LLC, MT25 LLC, Peter J. Porcelli II, Bonnie A. Harris, and Christopher Tomasulo.

• According to the FTC’s complaint, Safe Harbour, Porcelli, Harris, and Tomasulo target homeowners facing foreclosure with claims such as “We have all the funds available to pay your bills and save your home from foreclosure. GUARANTEED!” The Silverstone companies and Keystone then provide high-cost, interest-only, short-term balloon-payment loans secured by second mortgages on homes already subject to foreclosure.

For more, see FTC Charges Mortgage Foreclosure “Rescuers” with Deceiving Homeowners.

In a related story, see the St. Petersburg Times: Scammer in trouble again (A millionaire, already in prison for credit card fraud, is accused of foreclosure deceit).

To view the lawsuit, see FTC v. Safe Harbor Foundation Of Florida, Inc., et al. (U.S. District Court, N.D. Ill.)

This suit now makes at least three civil suits against foreclosure rescue operator Peter Porcelli and his group of associates. To view the two other lawsuits (that I know of), see:

• Complaint - Clark, et al. v. Porcelli, et al. (U.S. District Court, M.D. Fla.),
• Heise, et al. vs. Porcelli, et al. (U.S. District Court, M.D. Fla.).

Go here for earlier posts on Peter Porcelli.

C. Florida Foreclosure Rescue Operator Faces Another Suit; Racketeering, Conspiracy, Criminal Usury, TILA Violations Alleged

In Central Florida, the St. Petersburg Times reports:

• Two homeowners filed a lawsuit in federal court [last] week against Peter J. Porcelli, saying they lost their homes because of his foreclosure lending scam. Philip Clark and Tania Harris say Porcelli of Oldsmar and others associated with his Safe Harbour Foundation, Silverstone Lending and Silverstone Financial companies targeted them as part of a scam to save them from foreclosure through fraudulent loans. In October, a federal judge sentenced Porcelli to 13 years in prison for his part in a credit card scam that victimized tens of thousands of credit-poor consumers across the country. He also was ordered to pay restitution of more than $11.8-million. Porcelli was indicted in March on conspiracy, wire fraud, mail fraud and money laundering charges. Prosecutors said he had a telemarketing operation that preyed on 165,141 consumers nationally and took in nearly $12-million in illegal profits.

Source: Homeowners sue over loan fraud (2nd blurb from the top).

Included in the lawsuit are allegations of:

1. civil RICO violations by a pattern of racketeering activity and through the collection of unlawful debt (18 USC § 1961 et seq.),
2. Truth In Lending Act violations (15 USC § 1601 et seq.),
3. unlawful mortgage brokering and mortgage lending (Fla Statute Chapter 494),
4. criminal usury (Fla. Statute Chapter 687), and
5. civil conspiracy.

The homeowners also seek to void all liens, mortgages, etc. currenly clouding title to their homes by reason of the alleged acts of Porcelli and his confederates. To view the lawsuit, see Complaint - Clark, et al. v. Porcelli, et al. (U.S. District Court, M.D. Fla.).

To view an earlier lawsuit against Porcelli and associates making similar allegations, see Heise, et al. vs. Porcelli, et al. (U.S. District Court, M.D. Fla.).

Representing the homeowners in both lawsuits is Michael Alex Wasylik, Esq., with the law firm Ricardo & Wasylik PL, Dade City, Florida.

Go here for earlier posts on Peter Porcelli.

Central Florida Foreclosure Rescue Operator Under Investigation

The St. Petersburg Times has a story today of Peter J. Porcelli, a Central Florida foreclosure rescue operator who, along with two companies he set up, are reportedly being scrutinized by state and federal investigators for possible violations of law.

According to The Times, the two Clearwater businesses that Peter Porcelli set up -- the Safe Harbour Foundation (purportedly a non profit foundation) and Silverstone Lending -- "reportedly worked hand-in-glove to target desperate homeowners facing foreclosure and enticed them into short-term, high-risk loans that may violate Florida laws".

The Times found that the purported non profit foundation is not listed among exempt charities on the IRS Web site or registered with the state of Florida.

The Times describes Porcelli's past history, including the fact that he was indicted two months ago on conspiracy and fraud charges involving an unrelated credit card scam that targeted 165,000 victims. He pleaded guilty Friday to all 19 counts.

For more, see Facing new fields of fraud (Guilty in one scam, an Oldsmar man is scrutinized in a high-risk loan scheme that preyed on those facing foreclosure).

Go here for other posts on Peter Porcelli.

Convicted C. Florida Scammer Charged w/ Using Phony Non-Profit To Make Bogus Loan Offers Designed To Swipe Home Equity From Those Facing Foreclosure

In Tampa, Florida, the St. Petersburg Times reports:

• Peter Porcelli, the telemarketing tycoon who poured part of his fortune into the former world champion Tampa Bay Smokers fast-pitch softball team, has been indicted on a mail fraud charge in connection with a mortgage foreclosure program. Porcelli, 57, of Oldsmar is already behind bars. Two years ago, he was sentenced to 13 years in federal prison and ordered to pay $11.9 million in restitution for a credit card scam that victimized tens of thousands of credit-poor consumers nationwide. A federal indictment unsealed Friday accuses Porcelli of using a foreclosure salvage service and a mortgage lending business to defraud homeowners in financial distress.(1)

***

• Kathy Visceglie, a Pasco County resident who organized homeowners to expose Porcelli's foreclosure salvage tactics, cheered news of the indictment but said it comes too late to help dozens of area residents who lost their homes. "Porcelli's company looked like a nonprofit that was offering hope, but it turned out to be the worst kind of fraud," she said. "I'm relieved the government finally took action. But it's too late to put people back into the homes they lost."

For the story, see Convicted telemarketing tycoon now facing mail fraud charge.

(1) Porcelli incorporated the Safe Harbour Foundation, a Clearwater nonprofit firm that offered to "help save homeowners from foreclosure by introducing them to lenders," according to court papers. But homeowners then found themselves referred for financial help to Silverstone Lending, a second company set up by Porcelli. Prosecutors say Silverstone used high-fee second mortgages and short-term balloon loans in which a quick default often ended with borrowers losing their homes. One victim reportedly said he phoned Safe Harbour looking for help with a foreclosure and he was talked into borrowing $35,000 when he needed only $20,000 to settle the case. He says he didn't understand that the Silverstone loan carried an option to take his house.

Porcelli's alleged foreclosure rescue, equity stripping racket is more fully described in civil lawsuits filed against him by victimized homeowners who faced foreclosure. See C. Florida Foreclosure Rescue Operator Faces Another Suit; Racketeering, Conspiracy, Criminal Usury, TILA Violations Alleged. foreclosure rescue

Scammer Gets 13 Years In Credit Card Scam; Civil Suit & Criminal Investigation In Unrelated Alleged Foreclosure Rescue Scam Continues

The St. Petersburg Times reports:

• Peter J. Porcelli, who made a fortune with direct mail and telemarketing and took his Tampa Bay Smokers fast-pitch softball team to two world championships, was sentenced to 13 years in prison Monday for his part in a credit card scam that victimized tens of thousands of credit-poor consumers nationwide. Porcelli, 55, of Oldsmar [, Florida] was also ordered by a federal judge in East St. Louis, Ill., to pay restitution of $11,886,317. [...] The government sought a sentence of at least 15 years, 8 months, but Porcelli was given leniency for his cooperation with a federal grand jury investigation into his lending operation in the Tampa Bay area and for his testimony against executives who ran part of the credit card fraud in Utah and Nevada.

[...]

• Investigators are now looking at another possible credit scam that targeted down-on-their-luck consumers. U.S. postal inspectors and the Florida Department of Financial Services are investigating a nonprofit group called Safe Harbour Foundation and a mortgage company called Silverstone Lending that Porcelli operated out of the same Clearwater office. The nonprofit sought out desperate homeowners facing foreclosure and referred them to Silverstone for high-risk, short-term loans that appear to violate state laws.

• Two weeks ago, a group of homeowners who say they were victimized by the predatory lending operation filed a $40-million federal lawsuit against Porcelli, his companies and associates, claiming they were duped by the nonprofit's misrepresentations into signing for bailout loans with illegal fees and interest rates as high as 500 percent.

For more, see Judge sends $12-million message (That's the restitution an Oldsmar man must pay for a credit scam, plus 13 years in prison).

Go here for other posts on Peter Porcelli.

Federal Appeals Court Affirms 10-Year Prison Sentence For Notorious Central Florida Foreclosure Rescue, Home Equity Scammer

From a recent ruling from a federal appeals court:

• Peter James Porcelli, II, appeals his sentence for one count of mail fraud, in violation of 18 U.S.C. § 1341. He raises four issues on appeal.
  
  First, he argues that the district court erred in applying the U.S.S.G. § 3B1.3 offense-level enhancement for abuse of trust or use of a special skill, particularly in light of its simultaneous application of the § 3B1.1 aggravated-role enhancement.
  
  Second, he claims that the financially distressed victims facing home foreclosure were not "vulnerable victims" for purposes of § 3A1.1(b)(1).
  
  Third, he contends that the portion of the forfeiture money judgment that exceeded the loss amount constituted a violation of the Excessive Fines Clause of the Eighth Amendment.
  
  Finally, he argues that the decision to impose the instant sentence to run consecutively to his sentence in a Southern District of Illinois telemarketing-fraud case was substantively unreasonable.
  
  For the reasons set forth below, we affirm.

For the ruling, see U.S. v. Porcelli, No. 10-14777 (11th Cir. September 21, 2011) (unpublished).

(1) Among the observations made by the appeals court in ruling against this lowlife are those appearing in the following five excerpts (anyone going after dirtbags lilke this guy, either in criminal prosecutions or civil lawsuits (either in state court or federal court), would be well advised to work into their presentations in court the following points in seeking stiff criminal penalties, and, in the case of civil lawsuits, stiff compensatory and punitive damages):

1. Porcelli and the others searched for homeowners who were in jeopardy of losing their homes through foreclosure, specifically targeting those who still had equity in their homes.



2. The probation officer calculated that 68 homeowner-victims borrowed a total of approximately $1.8 million. Of that amount, approximately $1.2 million constituted fraudulent loan fees and costs, and, thus, was the "loss and restitution" amount owed to the victims.



3. At the first sentencing hearing, several victims testified that Porcelli had caused them emotional and physical distress by manipulating, intimidating, and confusing them into the agreements, then harassing and threatening them and stealing their homes after they defaulted. One victim experienced high blood pressure and a heart attack as a result of Porcelli's actions, another was seeing a psychologist and taking considerable medication, and a third attempted to commit suicide.



4. "[T]he primary concern of § 3B1.3 is to penalize defendants who take advantage of a position that provides them freedom to commit or conceal a difficult-to-detect wrong." Garrison, 133 F.3d at 838 (quotation marks omitted). The court "must distinguish between those arms-length commercial relationships where trust is created by the defendant's personality or the victim's credulity, and relationships in which the victim's trust is based on [the] defendant's position in the transaction." Id. (quotation marks omitted).
   
   "Fraudulently inducing trust in an investor is not the same as abusing a bona fide relationship of trust with that investor." United States v. Mullens, 65 F.3d 1560, 1567 (11th Cir. 1995).
   
   Here, Porcelli falsely held out Safe Harbour as a nonprofit foundation dedicated to "foreclosure relief." Victims contacted Porcelli in reliance on that representation, as well as on the misrepresentations that Safe Harbour was established to "keep [people] in [their] home[s]," "give [them] a second chance," "[s]ave [their] credit," and protect them from "predators" who wanted to profit from their misfortunes.
   
   Porcelli then took advantage of the victims' belief that he was a nonprofit foreclosure-relief counselor in order to induce them to take out second mortgages through Silverstone Lending or another of his for-profit lenders. Silverstone Lending's ability to make such mortgages and to create the attendant fees depended on Porcelli's state-issued mortgage-lending license.
   
   Under all the circumstances, the district court did not clearly err in finding that Porcelli held, or falsely led the victims to believe that he held, a bona fide relationship of trust with them. See § 3B1.3 & comment. (n.3); Garrison, 133 F.3d at 837.
   
   Furthermore, Porcelli's interactions with the victims were not limited to "arms-length" lending transactions in which Porcelli, as a representative of Silverstone Lending, "[f]raudulently induc[ed] trust in" the borrowers. See Garrison, 133 F.3d at 838; Mullens, 65 F.3d at 1567.
   
   Rather, Porcelli also used his falsely assumed position as a nonprofit foreclosure-relief coordinator to manipulate and intimidate the victims into believing that a second mortgage from Silverstone Lending was their only remaining option, and, in doing so, caused the victims to be more susceptible to signing the exorbitant mortgage contracts. Thus, the court did not err in finding that Porcelli abused his falsely assumed position of trust with the victims. See § 3B1.3 & comment. (n.3); Garrison, 133 F.3d at 837-38; Mullens, 65 F.3d at 1567.
   


5. "If the defendant knew or should have known that a victim of the offense was a vulnerable victim," he is subject to a two-level enhancement. § 3A1.1(b)(1).
   
   A "vulnerable victim" is a victim "who is unusually vulnerable due to age, physical or mental condition, or who is otherwise particularly susceptible to the criminal conduct." Id., comment. (n.2). The adjustment applies when the defendant selects his victim due to his perception of the victim's vulnerability to the offense. United States v. Day, 405 F.3d 1293, 1296 (11th Cir. 2005).
   
   Thus, in determining whether the victims were "vulnerable," we focus on the facts known to the defendant when he decided to target the victims, not on the harm actually suffered by the victims. United States v. Page, 69 F.3d 482, 489 & n.6 (11th Cir. 1995). "It is clear that having bad credit or otherwise being in a precarious financial situation is a `vulnerability' to fraudulent financial solicitations . . . ." Id.
   
   When a fraudulent loan scheme is "specifically addressed . . . to persons with bad credit," it "target[s] the most desperate victims." Id. at 490. "We will not absolve. . . defendants of their culpability for having targeted `vulnerable victims' simply because, in casting out their net, they happened to ensnare and defraud some individuals who did not share this vulnerability." Id. at 491-92.
   
   Porcelli specifically targeted individuals who were financially distressed and were in danger of losing their homes through foreclosure. He marketed Safe Harbour as a nonprofit organization that would "give people a second chance when no one else w[ould]," and he wrote the marketing materials to appeal to people who were facing "financial pressures," bankruptcy, harassment by creditors, and "ruin[ed] . . . credit ratings."
   
   Although Porcelli suggests that some or all of the victims might have lost their homes despite their involvement with him, the actual harm suffered is irrelevant to this analysis. See Page, 69 F.3d at 489 n.6.
   
   Furthermore, his speculation that some of the victims might not have been financially distressed or might have sought the mortgages for reasons other than imminent foreclosure does not prove that the vulnerable-victim finding was plainly erroneous. See Massey, 443 F.3d at 818; Page, 69 F.3d at 491-92. The district court did not plainly err in finding that the victims were unusually susceptible to the mortgage-fraud scheme, that Porcelli had targeted them for that reason, and, thus, that the vulnerable-victim enhancement applied. See § 3A1.1(b)(1) & comment. (n.2); Massey, 443 F.3d at 818; Page, 69 F.3d at 489-90.

C. Fla. F'closure Rescue Scammer Gets 10 Years In Ripoff Using Phony Non-Profit 'Front'; Described By Prosecutor As "A Kind Of Slow-Motion Theft"

In Tampa, Florida, the St. Petersburg Times reports:

• Peter J. Porcelli, a Pinellas businessman who made millions in telemarketing and owned the world-champion Tampa Bay Smokers fast-pitch softball team, was sentenced to 10 years in federal prison [] for defrauding dozens of local homeowners with a foreclosure relief scam.(1)

• Using a phony nonprofit, Porcelli promised residents facing foreclosure he would save their homes. But victims instead saw illegal loan fees, annual interest rates ballooning as high as 260 percent and a provision to forfeit their homes if payments were missed. Prosecutor Thomas N. Palermo called Porcelli's lending operation "a kind of slow-motion theft."

For more, see Belleair Beach millionaire scam artist Peter Porcelli finally faces justice.

See also The Tampa Tribune: Pinellas man gets 10 years in foreclosure scam.

(1) U.S. District Judge Susan Bucklew reportedly deferred the start of Porcelli's ten-year prison sentence until such time that he finishes off an eight-year sentence he is currently serving for an earlier, unrelated telemarketing fraud conviction.

Central Florida Foreclosure Rescue Operator Cops Plea In Racket That Targeted House-Rich, Cash-Poor Owners In Home Equity Ripoff

In Tampa, Florida, the Bradenton Herald reports:

• The reputed ringleader of a foreclosure-rescue scam that operated in Manatee County and elsewhere in Florida now is facing more federal prison time. Peter James Porcelli II, also known as Peter James, pleaded guilty in a Tampa federal courtroom Thursday to one count of mail fraud in connection with the rescue scheme, U.S. Attorney A. Brian Albritton said Friday.

***

• He initially was charged with fleecing 56 distressed homeowners, including three in Manatee and four from Sarasota County, out of more than $1.8 million, court records show. Porcelli recruited those homeowners through Safe Harbour Foundation of Florida Inc., a Clearwater outfit that misrepresented itself as a nonprofit corporation dedicated to helping homeowners avoid foreclosure, prosecutors said.

• It combed public records to target homeowners facing foreclosure and send mailers that offered “immediate relief from financial pressures” and a “guaranteed solution to stay in your home,” among other promises. Homeowners who called the number on the flyer reached Porcelli or one of his associates, who asked questions to determine how much equity the homeowner had. If it was a significant amount, homeowners would be referred to Silverstone Lending LLC or Silverstone Financial LLC — both also controlled by Porcelli — to take out six-month loans to get the mortgage up to date, authorities said.

• But those loans often charged the state maximum of 18 percent interest and numerous fees that often exceeded 60 percent of the loan amounts.(1) The loan terms also gave Silverstone the power to take the home if the borrower defaulted, authorities said.

For the story, see Foreclosure-rescue scammer facing 20 years in prison.

(1) See also, The Tampa Tribune: Pinellas telemarketer pleads guilty to mail fraud:, which reports that of the total money the homeowners purportedly orrowed, they received less than 38 percent of that loan money, and they ended up owing Porcelli or his companies the remainder in fees and costs.

Feds, Florida Foreclosure Rescue Operators Settle Civil Charges Of TILA, HOEPA Violations

The Federal Trade Commission recently announced:

• Two individuals who lured homeowners into high-cost, short-term loans secured by an additional mortgage on their homes have settled FTC charges that they violated federal law – and a previous court order against them. Thomas C. Little, an attorney, also settled contempt charges based on his role in facilitating the scam. The Commission sued them and seven other defendants in February 2008 as part of an ongoing effort to crack down on businesses that prey upon homeowners facing foreclosure.

***

• The settlements with Christopher Tomasulo and Bonnie Werner (formerly Bonnie A. Harris) resolve these charges and impose judgments of $2,791,040.40 each, which will be suspended based on their inability to pay. The full judgments against them will become due immediately if they are found to have misrepresented their financial condition.(2)

For the entire press release, see Mortgage Foreclosure ‘Rescue’ Defendants Settle FTC Charges for Deceiving Homeowners.

For links to copies of the initial lawsuits, the settlements, and the related press releases, see:

• FTC v. Safe Harbour Foundation of Florida, Inc., et al., and
• FTC v. Bay Area Business Council, Inc., et al.

(1) The defendants allegedly violated the Home Ownership and Equity Protection Act (HOEPA) by extending credit based on the value of consumers’ collateral without regard to their repayment ability, by requiring balloon payments after only six months, by providing negatively amortized loans that cause consumers to owe more at the end of the loan than at the beginning, and by failing to make required disclosures. The defendants also allegedly engaged in a number of violations of the Truth in Lending Act (TILA).

(2) Other defendants in these cases are: Silverstone Lending, LLC, a Florida limited liability company; Silverstone Financial LLC, a Florida limited liability company; Keystone Financial, LLC, a Nevada limited liability company; Southeast Advertising, Inc., a Florida corporation; MT25 LLC, a Nevada limited liability company; and Peter J. Porcelli, II, individually and as officer, partner, or member of Silverstone Lending, LLC, Silverstone Financial LLC, and Safe Harbour Foundation of Florida, Inc..