Thursday, December 11, 2008
Nevada AG Announces Arrests in Foreclosure Rescue Scam
William Vargas, one of three defendants who allegedly operated a foreclosure rescue scam in Las Vegas since February 2007, under the business name of Federal Housing Aid, has been arrested.
Two additional defendants are still at large with warrants issued for their arrest. Paula Luna is believed to be in California and Michael Sinclair is believed to have fled to the Philippines. The Vargas arrest was made by investigators working for the Attorney General’s Mortgage Fraud Task Force, created in early 2008, to investigate and prosecute mortgage related crimes in Nevada.
The alleged scheme involved the collection of upfront fees for the purpose of assisting the victims with avoiding foreclosure on their homes. The suspects allegedly charged the victims between $899 to $1500 for foreclosure rescue services and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be stopped.
Collection of fees upfront is in violation of Nevada Revised Statute 645D.400, which makes it unlawful for a mortgage consultant to collect or receive any compensation until after the consultant has fully performed the consulting services that he contracted to perform or represented that he would perform. The State alleges that the defendants failed to provide the foreclosure rescue services and failed to refund the victims’ money as promised.
Defendants Vargas, Sinclair and Luna are each charged with multiple felonies including: One (1) felony count of Theft of a Person 60 Years or Older; seven (7) felony counts of Theft by Material Misrepresentation; and eight (8) misdemeanor counts of Deceptive Trade Practice. The initial appearance in Justice Court is set for December 10 at 7:30 am in Las Vegas Justice Court Department 9.
The case was filed by prosecutors assigned to the Attorney General’s Mortgage Fraud Task Force, which was created by Attorney General Masto in early 2008 to address mortgage fraud scams throughout Nevada. The task force combines the resources of several Attorney General Bureaus, including the Bureau of Criminal Justice and the Bureau of Consumer Protection. It works closely with other State agencies including the Mortgage Lending Division to investigate and prosecute mortgage fraud crimes in Nevada.
“Foreclosure rescue scams are particularly egregious because they target victims who are already experiencing financial hardship,” said Attorney General Cortez Masto. “These types of scams prey on vulnerable victims who are desperate for hope and who are looking for ways to avoid foreclosure. The victims end up paying whatever money they have left to the perpetrators, only to end up in a worse position than before they were scammed”
The charges against the named individuals are merely allegations. The defendants are presumed innocent until or unless proven otherwise in a court of law.
Consumers who wish to report mortgage fraud are asked to contact the Attorney General’s Bureau of Consumer Protection in Las Vegas at (702) 486-3194 to obtain a complaint form. Consumers with internet access may also obtain a Consumer Complaint Form, as well as other consumer protection and contact information, on the Attorney General’s website at http://www.ag.state.nv.us.
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Some Sources require Registration.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
More Trial Coverage
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
