Michelle Lefaoseu, also known as “Michelle Bennett,” “Michelle Lee” and “Michelle Page,” 42, Huntington Beach, California, was sentenced to 12 months and one day of imprisonment, followed by one year of supervised release, for participating in an extensive mortgage loan modification scheme.

According to court documents and statements made in court, Lefaoseu worked at a California-based company that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees. The company did business, at various times, as “First Choice Financial Group, Inc.,” “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” and “Nation Star Financial.”

Aria Maleki presided over the entire structure of this scheme, and Lefaoseu was head of the processing department. Acting as representatives of the above-named entities, members of Maleki’s sales team cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. Homeowners were charged fees that typically ranged from approximately $2,500 to $4,300 for the services. To induce homeowners to pay these fees, scheme participants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request. Few homeowners ever received any type of mortgage loan modification through the defendants’ company, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. They also directed homeowners to mail their checks to addresses and mail boxes that Maleki and others had set up in states other than California.

After members of the sales team fraudulently induced homeowners to pay for the company’s services, the homeowners’ files were transferred to Lefaoseu and the junior processors working under her supervision. Lefaoseu was fully aware of her co-workers’ lies and, during her contact with victims, repeatedly helped to cover up those lies.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

On January 21, 2016, a grand jury in New Haven returned an indictment charging Maleki, Lefaoseu and five other California residents with conspiracy and fraud offenses related to this scheme. The defendants were arrested on January 26.

On July 11, 2016, Lefaoseu pleaded guilty to one count of misprision of a felony.

On March 22, 2016, Maleki pleaded guilty to one count of conspiracy to commit mail and wire fraud and, on July 18, 2016, he was sentenced to 112 months of imprisonment. He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

The other five defendants, all of whom were members of Maleki’s sales team, pleaded guilty and were sentenced to prison terms ranging from 18 months to 58 months.

All seven defendants have been ordered to pay restitution in the amount of $2,390,496.59.

U.S. District Judge Stefan R. Underhill in Bridgeport, Connecticut, sentenced Lefaoseu and Deirdre M. Daly, United States Attorney for the District of Connecticut made the announcement. The matter was investigated by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

The case was prosecuted by Assistant U.S. Attorney Avi M.

Kowit Yuktanon, also known as “Eric Cannon” and “Aaron Brock,” 32, Huntington Beach, California, and Cuong Huy King, also known as “James Nolan” and “Jimmy“, 32, Westminster, California, have each been sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport, Connecticut, to 18 months of imprisonment, followed by one year of supervised release, for participating in an extensive mortgage loan modification scheme.  Judge Underhill also ordered both defendants to pay restitution in the amount of $2,390,496.59.

According to court documents and statements made in court, Yuktanon and King worked at a California-based company that falsely purported to provide home mortgage loan modifications and other consumer debt relief services to numerous homeowners in Connecticut and across the United States in exchange for upfront fees.  The company did business, at various times, as “First Choice Financial Group, Inc.,”  “First Choice Financial,” “First Choice Debt,” “Legal Modification Firm,” “National Freedom Group,” “Home Care Alliance Group,” “Home Protection Firm,” “Hardship Center,” “Network Solutions Center, Inc.,” “Premiere Financial Center,” “Premiere Financial,” “Rescue Firm,” “International Research Group LLC,” “Hardship Solutions,” “American Loan Center,” “Loan Retention Firm,” “Clear Vision Financial,” “Green Tree Financial Group,” “Green Tree Financial,” “Enigma Fund, Inc.,” “National Aid Group,” “Southern Chapman Group LLC,” “Save Point Financial,” “Best Rate Financial Solutions,” “Best Rate Financial Solution,” “Best Rate Financial,” “Best Rate Finance Group,” and “Nation Star Financial.”

Aria Maleki presided over the entire structure of this scheme, and Yuktanon and King were junior members of the sales team.  Acting as representatives of the above-named entities, Yuktanon, King and others cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans.  The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services.  To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.

In fact, the homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request.  Few homeowners ever received any type of mortgage loan modification through the defendants’ company, and few homeowners received refunds of their fees.

Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection.  The defendants also directed homeowners to mail their checks to addresses and mail boxes that Maleki and others had set up in states other than California.

As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million.

On January 21, 2016, a grand jury in New Haven returned an indictment charging Maleki, Yuktanon, King and four other California residents with conspiracy and fraud offenses related to this scheme.  The defendants were arrested on January 26.

YUKATANON and KING each pleaded guilty to one count of misprision of a felony.

Maleki pleaded guilty to one count of conspiracy to commit mail and wire fraud and, on July 18, 2016, he was sentenced to 112 months of imprisonment.  He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.

The sentence was announced by Deirdre M. Daly, United States Attorney for the District of Connecticut.  The matter was been investigated by the U.S. Department of Homeland Security – Homeland Security Investigations, U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, Federal Housing Finance Agency – Office of Inspector General, and Federal Bureau of Investigation, with assistance from the Oklahoma Attorney General’s Office.

The case is being prosecuted by Assistant U.S. Attorney Avi M. Perry.

John Vescera, 60, Dana Point, California, was to 12 months and one day of imprisonment, followed by three years of supervised release, for false advertising and misusing a government seal in connection with the provision of mortgage modification services. On May 3, 2016, Vescera pleaded guilty to one count of misuse of a government seal and one count of false advertising.

According to court documents and statements made in court, Vescera was the President of First One Lending Corporation (“First One”) in San Juan Capistrano, California.  During the peak of the national mortgage crisis, Vescera and First One offered home mortgage loan modification assistance to homeowners across the United States, including in Connecticut, who were having difficulty repaying their mortgage loans.

From approximately February 2010 until approximately February 2012, Vescera and First One solicited clients through television advertisements and infomercials produced by National Media Connection of New London, Connecticut.  These advertisements touted the mortgage modification services of an entity known as the National Mortgage Help Center (“NMHC”).

Matthew Goldreich, of East Lyme, Connecticut, had incorporated NMHC approximately two months after the U.S. Treasury Department announced that it would partner with financial institutions to reduce struggling homeowners’ monthly mortgage payments through a program called the Home Affordable Modification Program (“HAMP”).  HAMP consisted of a number of incentives to encourage homeowners and financial institutions to modify existing loans on owner-occupied primary residences in order to help keep these properties out of foreclosure.

NMHC advertisements misrepresented NMHC as being affiliated with or regulated by the U.S. government and falsely stated that NMHC “help[ed] thousands of homeowners every day.”  When viewers called the advertised telephone number, they were connected not to NMHC, which operated only as a front and did not provide mortgage modification services for any homeowners, but to clients of National Media Connection, including First One.

Vescera and First One used NMHC’s name and logo in First One’s promotional materials, application package and other documents.  Vescera also instructed First One employees to introduce themselves to prospective clients as “with the National Mortgage Help Center.”

First One also misrepresented its status with the U.S. Department of Housing and Urban Development (“HUD”).  First One employees were instructed to inform homeowners that “[w]e’re a HUD approved lender and we represent the government loan modification programs.”  In addition, certain of First One’s forms claimed that the company provided “HUD . . . Housing Counseling assistance” and bore HUD’s seal.  In truth, First One had no affiliation with the government mortgage loan assistance programs and was not licensed or approved by HUD for housing counseling or home mortgage loan modification services.

Through this scheme, 302 victims lost a total of $374,622.  Many of these victims were previously compensated after Vescera and First One paid approximately $1.5 million to the Neighborhood Assistance Corporation of America in March 2013 to resolve a federal lawsuit in the Central District of California.  As part of this criminal case, Vescera paid restitution of $30,320 to 24 of the victims who were not identified at the time the federal lawsuit was settled.

Goldreich previously pleaded guilty to one count of false advertising.  On November 5, 2015, he was sentenced to two years of probation, including three months of home confinement.  He also was ordered to pay a $100,000 fine and $75,794 in restitution.

Vescera was sentenced by Chief U.S. District Judge Janet C. Hall in New Haven, Connecticut.  Deirdre M. Daly, United States Attorney for the District of Connecticut announced the sentence. The investigation was conducted by the U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, and Federal Bureau of Investigation.  The case was prosecuted by Assistant U.S. Attorneys Avi Perry and Liam Brennan.