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Mark Goldstein and Drew Alia, Pennsylvania, and their five Pennsylvania mortgage foreclosure companies were sued today for deceiving consumers into signing contracts to have their mortgage loans modified and never delivering the services paid for.

Goldstein and Alia’s companies included GMK Solutions, the Foreclosure Law Center; Century Legal Group; Alia Law Group; and the Law Offices of Drew Alia.  Pennsylvania homeowners and other consumers wound up agreeing to pay the defendants more than $280,000 through their scam conducted between 2008 and 2015.

Here’s how the scam worked:

The defendants signed contracts with homeowners, promising to do a home loan audit and a mortgage modification – with the goal of lowering the consumer’s monthly mortgage payments or interest rate, or saving their home from foreclosure.

The defendants took cash deposits, often thousands of dollars, and then failed to produce the audits or mortgage modifications. To hide their scam, they told homeowners not to contact their mortgage lenders or make any payments because they were “handling” negotiations on the homeowners’ behalf.  When anxious consumers began to demand updates on the status of their loans, the defendants dodged their calls and offered no refunds.

During the scam, many homeowners received notices from their lenders stating that if they did not respond, their homes would be foreclosed upon or sold at sheriff’s sale.  In one instance, a consumer paid $3,500 up front for mortgage foreclosure services, and after the defendants assured the homeowner they had stopped the Sheriff’s sale, the home was lost anyway.

Another consumer from Delaware County called the Foreclosure Law Center for a loan modification to keep her home out of foreclosure, and paid a $700 deposit. The night before a sheriff’s sale, the defendants contacted the consumer and told her to file for bankruptcy to delay the sale. The bankruptcy filing was dismissed by the court. Ultimately, the defendants never delivered services or helped her and wouldn’t refund her deposit.

This consumer, Kathleen Zang, said: “The Foreclosure Law Center told me not to contact my mortgage company and they were handling everything on my behalf. I had to file for bankruptcy after I learned that communication was never made to keep my house — where my children and family lived. I was outraged after learning from my mortgage company that no one from the Foreclosure Law Center had been in touch with them. Other people lost their homes because of this company. I lost $700 — and I’m grateful to Attorney General Shapiro and his Bureau of Consumer Protection for stepping up for consumers like myself.”

The Office of Attorney General received 21 complaints from Pennsylvania consumers, and nearly 50 more from consumers across the country, who entered into mortgage modification contracts. In some cases, homeowners instructed by the scammers to not pay their mortgages ultimately lost their homes in sheriff’s sales.

Attorney General Josh Shapiro made the announcement.

Defendants Mark Goldstein, Drew Alia and their companies preyed upon dozens of Pennsylvanians and other consumers who thought they were making a smart decision for their home and family,” Attorney General Shapiro said. “They wanted to lower their interest rates, modify their mortgages, and save their homes. Instead, all they received from these defendants were false promises and no services. Some even lost their homes.  This misleading scam was outrageous and I’m suing to get restitution for every person and hold these companies accountable.

In addition to claims filed under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, the Attorney General’s lawsuit bases other claims against the defendants under the Pennsylvania Mortgage Licensing Act.

“If you believe you were victimized by defendants Goldstein, Alia or any of their companies, or any other false mortgage modification deal, call my office today or email us at scams@attorneygeneral.gov,” Attorney General Josh Shapiro said. “I want to hear from you, and we’ll seek justice and restitution for you.”

The lawsuit in the Philadelphia County Common Pleas Court seeks injunctive relief and restitution in excess of $280,000 total for all consumers who are currently or have ever been in a transaction with any of these companies or their affiliates.

Nationstar Mortgage LLC has entered into settlement agreements with the Consumer Protection Division and the Commissioner of Financial Regulation to resolve allegations that it charged homeowners illegal inspection fees.

Nationstar, the nation’s largest non-bank servicer of home mortgages, arranges for property inspections in order to protect the interests of mortgage lenders when homeowners are in default on their payments. Although Maryland law prohibits passing the cost of these inspections onto homeowners, Nationstar allegedly charged the inspection costs to homeowners until January 1, 2014 for forward loans and February 2016 for reverse mortgages. Nationstar assessed Maryland homeowners over $1 million in inspection fees.

Maryland Attorney General Brian E. Frosh made the announcement today.

These inspection charges violate state law,” said Attorney General Frosh. “They were performed for the benefit of the lenders, not the benefit of the homeowners. We are pleased that the victims of the illegal charges will be made whole.”

Under the terms of the settlement, Nationstar agrees to:

  • not collect inspection fees in the future,
  • return over $260,000 in fees in addition to $827,759 that it returned during the Division’s investigation, and
  • pay the Division close to $490,000 in penalties and $10,000 in costs.

The Commissioner of Financial Regulation, who licenses Nationstar, has entered into a Memorandum of Understanding contemporaneously with the Consumer Protection Division’s settlement.

Avi Stern, Christopher Graeve, and Stuart Hankin, Florida, three high-volume Florida real estate investors were indicted yesterday with conspiring to rig bids during online auctions in Palm Beach County, Florida in order to obtain foreclosed properties at suppressed prices.  The indictment alleges that the conduct took place from at least January 2012 until June 2015.

The Department of Justice made the announcement.

These are the first indictments related to bid rigging in foreclosure auctions filed in Florida by the Justice Department’s Antitrust Division.  The Antitrust Division previously has prosecuted similar bid rigging conduct in Alabama, California, Georgia and North Carolina, resulting in more than 100 guilty pleas and convictions in those states.

These charges demonstrate that the Antitrust Division will uncover and prosecute collusion by real estate investors, regardless of whether their conduct is carried out in person, or in texts, online chats or through other electronic means,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “The Division will continue to work closely with our law enforcement colleagues to prosecute those responsible for taking money that would otherwise have gone to mortgage holders, Palm Beach County, and in some cases, to the owners of foreclosed homes.

Real estate investors who think they can swindle the system to line their pockets with ill-gotten gains beware,” said Assistant Special Agent in Charge Paul Keenan of the FBI Miami’s Field Office. “The FBI and our law enforcement partners will vigorously investigate such schemes.”

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.

These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Miami Division – West Palm Beach Resident Agency.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal I Section of the Antitrust Division at 202-307-6694 or www.justice.gov/atr/contact/newcase.html.

MichaelMickey” Henschel, 68, Van Nuys, California was indicted on an 11-counts for his alleged role as the mastermind of a foreclosure-avoidance scam that targeted distressed homeowner.  He was arrested on federal charges that he orchestrated a bankruptcy fraud scheme that brought in more than $7 million from victims. Henschel was ordered detained pending trial.

According to the indictment unsealed after his arrest, Henschel owned a Van Nuys-based company he operated under several names, including Valueline. Henschel and several co-conspirators marketed illegal foreclosure- and eviction-delay services to homeowners who had defaulted on their mortgages and renters who were facing eviction. As part of the scheme, Henschel and the others allegedly convinced homeowners to sign fake grant deeds that purported to show the homeowners had conveyed an interest in their properties to fictional third parties.

Henschel and his co-conspirators allegedly filed bankruptcies in the names of fictional persons and entities to trigger the automatic stay provision of the Bankruptcy Code, which meant that foreclosure sales were stalled.

Henschel allegedly delayed evictions in a similar way, filing fraudulent documents in state eviction actions and sending similar documents to sheriff’s offices.

Henschel allegedly charged some homeowners large fees before agreeing to clear title to their properties, in addition to the monthly fees paid for the illegal services. During the course of the scheme, from October 2010 through July 2013, Henschel and his co-conspirators collected more than $7 million, according to the indictment.

The indictment charges Henschel with one count of conspiracy, eight counts of bankruptcy fraud and two counts of wire fraud.

Following his arrest, Henschel was arraigned on the indictment. He entered a not guilty plea, and a trial was scheduled for August 8, 2017.

If he is convicted of the charges in the indictment, Henschel would face a statutory maximum sentence of five years in federal prison for each of the conspiracy bankruptcy fraud counts. The two wire fraud counts carry a statutory maximum sentence of 20 years.

The case against Henschel is the result of an investigation by the FBI and FHFA-OIG, which received assistance from the Alameda County District Attorney’s Office and the United States Trustee’s Office for the Central District of California.

This case is being prosecuted by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.

Drew Alia, 40, Philadelphia, Pennsylvania, pled guilty to an Information which charged him with willfully failing to file federal income tax returns for tax years 2010 through 2013 before United States District Court Judge Paul Diamond.

Alia, an attorney, according to the Information, operated a home mortgage rescue service which was designed to assist home owners who were facing foreclosure to secure financing in order to prevent a home mortgage foreclosure. The Information alleged that Alia realized gross income of $28,000 in 2010; $107,000 in 2011, $144,000 in 2012, and $71,000 in 2013 all of which he failed to report on federal income tax returns that he was required to file in each of the aforementioned years.

As we begin the 2017 filing season, American taxpayers are reminded that the term voluntary compliance means that each of us is responsible for filing a tax return when required and for paying the correct amount of tax,” said Internal Revenue Service Criminal Investigation Acting SAC Gregory Floyd. “That responsibility should not be taken lightly. Mr. Alia chose to ignore his duty to file and pay taxes; thus he must be held accountable for his actions.”

Alia faces a maximum of 4 years of imprisonment, a fine of up to $400,000 and 1 year of supervised release when he sentenced.

The plea was announced by acting United States Attorney Louis D. Lappen.The case was investigated by Internal Revenue Service’s Criminal Investigation Division Philadelphia Field Office and is being prosecuted by Assistant United States Attorney Floyd J. Miller.

Trent Gaines, a Georgia real estate investor, pleaded guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia.  Gaines admitted that he and others conspired not to bid against one another at public real estate foreclosure auctions from October 2008 to November 2010 in Fulton County, Georgia, and from September 2006 to February 2011 in DeKalb County, Georgia. Gaines also admitted to conspiring with others to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that should have gone to mortgage holders and others. The selected properties were then awarded to the conspirators who submitted the highest bids in private side auctions open only to Gaines and his co-conspirators. Continue Reading…

Tampa lawyer involved in mortgage rescue scam loses law license

A Tampa lawyer who helped swindle homeowners out of $4.7 million during the mortgage crisis has had his law license revoked by the state Supreme Court.

In July of 2014, the attorneys general for Florida and Connecticut filed a federal lawsuit alleging lawyer Ian S. Berger, along with several others, had scammed struggling homeowners by promising them loan modifications if they signed on to “mass joinder” lawsuits against their lenders.

John Shiells, Real Estate Investor,  Danville, California, and Miguel De Sanz, Real Estate Investor, San Francisco, California each pleaded guilty to three counts of bid rigging and three counts of mail fraud in the U.S. District Court of the Northern District of California in Oakland, California. Both were charged in an indictment returned by a federal grand jury in the Northern District of California on Nov. 19, 2014 in connection with their role in bid-rigging conspiracies and mail fraud at public real estate foreclosure auctions in Northern California. Continue Reading…

Ramin Rad “Ray” Yeganeh, real estate investor, San Mateo, California was indicted by a grand jury in the U.S. District Court of the Northern District of California in Oakland and charged with bid rigging and conspiracy to commit mail fraud in connection with public foreclosure auctions. Continue Reading…