Archives For Georgia

PHH Mortgage Corporation (“PHH”) has entered into a settlement today with Attorney General Chris Carr’s office to resolve allegations that it violated Georgia’s Fair Business Practices Act by charging unauthorized fees to Georgia consumers.

The Attorney General’s office alleges that PHH, a New Jersey-based mortgage servicing and mortgage originating business, marketed various third-party products and services, including insurance products and home warranty programs, to certain consumers whose mortgages it serviced and placed charges for these products and services on consumers’ mortgage bills. According to the Attorney General, many consumers did not even realize they had signed up for these products and services. Likewise, they were not aware that the cost of these items was being added onto their monthly mortgage payments.

In resolution of these allegations of unfair and deceptive acts and practices, PHH has entered into a settlement requiring it to:

  • comply with the Fair Business Practices Act;
  • refrain from soliciting Georgia consumers’ purchase of and/or enrollment in third-party products and/or services;
  • cease all billing for the products and/or services provided and/or fulfilled by third-parties;
  • notify each consumer it is currently billing for products and/or services provided and/or fulfilled by third-parties that the consumer may cancel the remainder of the contract without penalty;
  • pay $25,000 to fund a Consumer Restitution Trust Account, to be administered by the Attorney General, for consumers who paid fees for third-party products and/or services that, due to any of PHH’s solicitation and/or billing practices, the consumer alleges were not owed; and
  • pay $50,000 to the Attorney General’s office in fees, penalties, investigation and litigation costs, and/or for future  consumer protection and consumer education costs. In the event that PHH fails to comply with the settlement terms at any time during a 120-day monitoring period, an additional $50,000 will immediately become due.

“Our office will hold accountable those that use deceptive means to profit from consumers,” said Attorney General Chris Carr.

Refunds for Consumers

Consumers who paid fees for third-party products and/or services due to any of PHH’s solicitations and/or billing practices may be entitled to compensation under the settlement and  should fill out and submit a prescribed claim form, along with supporting documentation, to the Georgia Department of Law. Claim forms must be postmarked, faxed or hand-delivered no later than 5:00 p.m. EDT on Wednesday, August 29, 2018 in order to be considered for restitution.

Eligibility

Claims must be submitted by or on behalf of consumers who: pfees for third-party products and/or services that, due to any of PHH’s solicitation and/or billing practices, the consumer alleges were not owed; and have not received a full refund from PHH and/or the third-party provider.

Filing a Claim

Consumers can download a claim form from the Consumer Protection Unit website here.

Completed claims and any documentation, should be submitted by mail, overnight delivery, fax or hand-delivery to:

Georgia Department of Law – Consumer Protection Unit

ATTN: PHH Restitution

2 Martin Luther King Jr. Drive SE, Suite 356

Atlanta, Georgia 30334-9077

Fax number:  404-651-9018

You may NOT submit the Claim Form by email.

Claims must be postmarked or faxed no later than 5:00 p.m. EDT on August 29, 2018.

 

Michelle Sylethia Jordan, a/k/a Michelle Harris and Michelle Welsh, 49; her husband, Michael Paul Anthony Welsh, a/k/a Michael A. Welsh and Michael Paul S. Welsh, 45, both of Laurel, Maryland; and Carrol Antonio Jackson, a/k/a Jack Jackson, 48, Hinesville, Georgia, were convicted on June 20, 2018 of conspiracy and mail and wire fraud charges in connection with a foreclosure prevention fraud scheme.

According to the evidence presented at the eight-day trial, Jordan was chief executive officer and director of MJ Loan Auditor Group, LLC (MJLAG), a limited liability company registered and doing business in Maryland.  Welsh was the president, vice president, and director of MJLAG.  Jackson was the owner and manager of CJ Maxx Group LLC, a limited liability company doing business in Maryland, Virginia, and Georgia.

The evidence showed that from August 2012 until February 2017, Jordan and Welsh falsely told victim homeowners that, for a fee, MJLAG could help these homeowners modify their mortgage loans and prevent foreclosure of their homes.  Jordan and Welsh falsely represented that MJLAG could help the homeowners get “free and clear” title to their homes, with no debt or liens against the property, and that MJLAG could obtain money from the homeowners’ lenders, typically by suing the lenders.  Jordan and Welsh told homeowners that they needed to purchase one or more “audits” of the homeowners’ mortgage loans in order to uncover fraud and alleged illegal acts committed by the lenders, and that these “audits” could be used as evidence in lawsuits against the lenders and in negotiating for a loan modification.

Witnesses testified that as part of the scheme, Jordan and Welsh had homeowners sign a “contract fee agreement” setting out what fees would be charged for the “audit.”  The contract fee agreement contained the seal of the National Association of Mortgage Underwriters (NAMU), even though the defendants and their companies had no current affiliation with NAMU.  Jordan advised clients to submit baseless complaints about their lender to state and federal agencies, and to stop paying their mortgages.  Jordan further advised MJLAG clients whose homes already were in foreclosure proceedings to file for bankruptcy in order to delay the foreclosure proceedings and as part of the process to prevent foreclosure of the clients’ homes.  Jordan assisted MJLAG clients in filing for bankruptcy, by preparing bankruptcy petitions and related documents and court filings.

The evidence proved that Jordan and Welsh paid Jackson to prepare fraudulent documents purporting to be “Forensic Audit Reports” and “Real Estate Securitization Audits” relating to loans for properties owned by MJLAG clients.  The victim homeowners paid money to MJLAG with the expectation of receiving assistance with modifying their mortgage loans and preventing foreclosure of their homes.

The defendants each face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and 20 years in prison for each of ten counts of wire fraud.  U.S. District Judge Roger W. Titus has scheduled sentencing for September 28, 2018 at 9:00 a.m.

After the verdict was announced, U.S. District Judge Roger W. Titus ordered that Jordan and Welsh be detained pending sentencing and they were immediately taken into custody.

The conviction was announced by United States Attorney for the District of Maryland Robert K. Hur; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service – Washington Division; Chief Henry P. Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Sheriff Steve Sikes of the Liberty County, Georgia, Sheriff’s Office; and Vernon M. Keenan, Director of the Georgia Bureau of Investigation.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes.  This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets.  Information about mortgage fraud prosecutions is available http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.

United States Attorney Robert K. Hur commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, Liberty County Sheriff’s Office SWAT Team, and the Georgia Bureau of Investigation for their work in the investigation, and recognized the Maryland Department of Labor, Licensing, and Regulations for its assistance.  Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, and Special Assistant United States Attorney Elizabeth Boison, who are prosecuting the case.

 

Thomas Scott Brown, 47, Atlanta, Georgia, was sentenced to three years in prison, followed by five years of supervised release, for his role in a bank fraud scheme that resulted in losses of approximately $2.7 million. Brown pled guilty to bank fraud and false statements to a financial institution on June 9, 2017. According to court documents, from approximately 2006 through 2007, Brown purchased properties for buyers with his own money and then directed those individuals to apply for home equity loans with Navy Federal Credit Union, claiming that they owned the properties free and clear of any liens when, in fact, they still owed Brown for the properties. In applying for these home equity loans, Brown instructed the buyers to submit false documentation to the bank, including fraudulent Housing and Urban Development Settlement Statements and false membership applications. Brown further ordered these individuals to pay him from the proceeds of the home equity loans.

In most instances, the homes went into foreclosure after the bank approved the loans. In total, 51 properties Brown sold eventually went into foreclosure, causing Navy Federal Credit Union losses of $2.7 million.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Claude M. Hilton. Assistant U.S. Attorney Jamar K. Walker prosecuted the case.

Joseph W. Witkowski, 70, former New Jersey lawyer, Flemington, New Jersey, was sentenced to 48 months in prison for participating in a conspiracy that caused lenders to release $40.8 million based on fraudulent mortgage loan applications and laundered the proceeds of the fraud.  Witkowski previously pleaded guilty to an indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. U.S. District Judge Joseph H. Rodriguez imposed the sentence in Camden federal court.

According to documents filed in this case and statements made in court:

Witkowski and his conspirators located oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, New Jersey; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure. They then recruited “straw buyers” – people with good credit scores but lacking the financial resources to qualify for mortgage loans – to purchase those properties.

Witkowski and his conspirators created false documents, including fake W-2 forms, income tax returns, investment statements, and rental agreements, to make the straw buyers appear more creditworthy than they actually were. They also established numerous telephone lines for companies owned by some of the conspirators so that when a lender contacted the telephone number, the conspirators could falsely verify that a straw buyer was employed by the company listed on his or her fraudulent loan application.

Witkowski also caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents, which attributed to the straw buyers inflated income and assets, to be submitted to mortgage lenders. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators had some of the funds wired or checks deposited into various accounts that he and his conspirators controlled.

In addition to the prison term, Judge Rodriguez sentenced Witkowski to three years of supervised release and ordered restitution of $13,105570. As part of his plea agreement, he must forfeit $2,412,899, representing the proceeds of the fraud.

U.S. Attorney Paul J. Fishman announced the sentence.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.

Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden

James R. Patterson Jr., a real estate investor, plead guilty for his role in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia.  Patterson admitted that he agreed with other real estate investors to rig auctions of foreclosed homes in Gwinnett County from May 2007 until at least November 2011.  According to court documents filed in the U.S. District Court for the Northern District of Georgia, Patterson and his co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids.  The winning bidders then paid off the conspirators who had refrained from bidding against them.  As a result, conspirators profited from money that otherwise would have gone to mortgage holders and other secured debt holders and in some cases, to the people who owned the foreclosed homes.

Twenty-two defendants have been charged in connection with the Justice Department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area.  Twenty of those have either pleaded guilty or agreed to plead guilty.

These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force.

Jackie Williams, 42, Bishop, Georgia, was sentenced to serve 70 months in Federal prison for wire fraud by the Honorable C. Ashley Royal, United States District Judge, in Athens, Georgia.  Ms. Williams was also ordered to pay restitution in the amount of $563,097.01.

Williams pled guilty to the charge on March 16, 2016.  As part of her guilty plea, Williams admitted to orchestrating a real estate fraud scheme which victimized several people in the Athens, Georgia area.  Williams admitted to defrauding investors from 2012-2014; specifically, she induced people to invest in a purported real estate business, claiming that she bought distressed homes and sold them for a substantial profit.  However, in numerous cases Williams never purchased the home that she told her victims she had used their money to buy, and she created falsified documents, such as fake purchase contracts and mortgage preapproval letters, to perpetuate her fraud.  In fact, Williams used her investors’ money for her own personal gain, and/or to pay off portions of the money she had borrowed from previous investors.  As part of her guilty plea, Williams admitted that she owes $563,097.01 in restitution to eight victims.

Noting that the 70-month sentence imposed was greater than the usual range of 33 to 41 months for a fraud of this magnitude, United States Attorney G. F. “Pete” Peterman, III, stated that, “It is particularly disturbing that Ms. Williams’ fraud in this case was against many older or retired victims who invested substantial portions of their savings which, even with the restitution order entered today, they are unlikely to ever recover.  If for no other reason, this office is particularly pleased that the Court chose to impose a harsher sentence than what the federal sentencing guidelines typically recommend.”

G. F. “Pete” Peterman, III, United States Attorney for the Middle District of Georgia, made the announcement. The case was investigated by the Federal Bureau of Investigation and the Sheriff’s Offices for Barrow, Madison and Oconee Counties.  Assistant United States Attorney Peter Leary handled the prosecution for the Government.

Jeffrey Wayne Brock, David Wallace “Chuck” Doughty, and Stanley Ralph Sullivan, real estate investors, pleaded guilty today for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia.  Each admitted that they agreed to rig auctions of foreclosed homes in Cobb County from June 2007 until January 2012.  According to court documents filed in the U.S. District Court for the Northern District of Georgia, Brock, Doughty, Sullivan and their co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids.  The winning bidders then made payoffs to conspirators who had refrained from bidding against them.  As a result, conspirators profited from money that otherwise would have gone to mortgage holders and other secured debt holders, and in some cases, to the owners of foreclosed homes.

These defendants conspired to corrupt foreclosure auctions that should have benefited lenders and homeowners,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division.  “The Antitrust Division will continue to work with our colleagues at the FBI to pursue those who took advantage of disruption caused by the financial crisis to line their own pockets.”

Foreclosure auction fraud in Georgia remains a focus for the FBI investigators and federal prosecutors within the Antitrust Division of the U.S. Department of Justice,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Division.  “By the very nature of this criminal act, the bank, and more importantly, the home owner in financial distress, are the victims that these federal laws were created to protect. The FBI will continue to provide investigative assets toward these matters in order to keep the level playing field that the law intended regarding these auctions.”

Twenty defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area.  Eighteen of those have either pleaded guilty or agree to plead guilty.

The charges were filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force.

Michael Stock, Georgia, and Jon Stovall Jr. Georgia, both of whom are real estate investors, pleaded guilty today for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia.  Each admitted that they agreed with other real estate investors to refrain from bidding against one another at public real estate foreclosure auctions in exchange for payoffs.  Stock admitted to participating in the conspiracy in Fulton and DeKalb counties from as early as August 2009 until at least November 2011, and Stovall admitted to participating in Fulton County from as early as October 2008 until at least January 2012.  Additionally, Stock and Stovall admitted to conspiring to use the mail to carry out a scheme to defraud homeowners and mortgage holders.

According to court documents filed  in the U.S. District Court for the Northern District of Georgia, the conspirators agreed not to compete against each other at public real estate foreclosure auctions, artificially suppressed the prices of properties sold at these auctions, and made and received payoffs from each other.  As a result, the conspirators seized money that otherwise would have gone to pay off the mortgage and other secured debt holders, and, in some cases, to the previous owner of the foreclosed home.

These defendants conspired to take money that rightfully belonged to homeowners and lenders,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division.  “Those homeowners and lenders have a right to expect that the properties will be sold in free and competitive auctions.  The Antitrust Division will continue to partner with our colleagues at the FBI to aggressively pursue conduct designed to disrupt that process.”

Foreclosure auction fraud in Georgia remains a focus for the FBI investigators and federal prosecutors within the Antitrust Division of the U.S. Department of Justice.  By the very nature of this criminal act, the bank, and more importantly, the home owner in financial distress, are the victims that these federal laws were created to protect. The FBI will continue to provide investigative assets toward these matters in order to keep the level playing field that the law intended regarding these auctions.”

Including the individuals pleading, 20 defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area.  Eighteen of those have either pleaded guilty or agreed to plead guilty.

These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force.

Nathan E. Hardwick IV, 50, formerly of Atlanta, Georgia, and Asha R. Maurya, 40, Atlanta, Georgia, were indicted on charges of with conspiracy, wire fraud, and related crimes in connection with Hardwick’s alleged theft of over $20 million from the attorney escrow accounts and operating accounts of Morris Hardwick Schneider and LandCastle Title, an Atlanta-based law firm and title agency in which Hardwick and Maurya once served as top executives.  In addition to charges against Maurya for assisting with Hardwick’s theft, the indictment also charges Maurya with stealing approximately $900,000 from the firm’s accounts to pay her own personal expenses. Continue Reading…

Angelo Alleca, 46, Buffalo, New York, and Mark Morrow, 54, Cincinnati, Ohio, were arraigned on charges of orchestrating a multi-million dollar investment fraud scheme.  The Defendants marketed several funds that were supposed to invest in certain assets/investments, such as hedge funds managed by a professional money manager of mortgage debt.  According to the new indictment, they instead used the money to pay redemptions to earlier investors, to acquire and operate several businesses, and to pay personal expenses.

According to U.S. Attorney John Horn, the indictment, and other information presented in court: From on or about 2004 until 2012,  Alleca acted as the President and Chief Operating Officer of Summit Wealth Management, an investment adviser headquartered in Atlanta, Georgia. During that time, Alleca started several funds and falsely misrepresented that money would be invested in hedge funds and debt securities and managed by professional investment managers. Continue Reading…