Four California Men Sentenced to Jail for Mortgage Modification Scams

Four California Men Sentenced to Jail for Mortgage Modification Scams

08/06/2013 BY: KRISTA FRANKS BROCK

Four California men face jail time, probation, and restitution fees for alleged mortgage modification scams. The men defrauded hundreds of homeowners of more than $130,000, according to an announcement Tuesday from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

The four defendants sent promotional letters to homeowners offering to modify or refinance their home loans. They collected upfront fees for their services and did not deliver on their promises.

They set up numerous false businesses and changed business names, phone numbers, and addresses to elude their customers and continue their scams.

The defendants promised full refunds if they were unable to modify the loans and claimed to have a 95 percent success rate for obtaining modifications on customers’ behalves. After receiving the fees from customers, the defendants did not obtain modifications nor return the fees.

After successfully defrauding more than 100 victims, the men began promising refinances at 2.8 percent, sending “Conditional Approval” letters to victims with their servicers’ logos on the letterhead.

“Holding out false hope, they took upfront fees from victims and did not work on their behalf. Mortgage modifications through HAMP can never be guaranteed,” said Christy Romero, SIGTARP.

Jacob John Cunningham, 26; John D. Silva, 28; Justin Dennis Koelle, 23; and Dominic Adam Nolan, 32; all pleaded guilty to felony counts of conspiracy to collect illegal upfront fees and conspiracy to commit theft by false pretenses. Cunningham, Silva, and Koelle all pleaded guilty to two felonies, while Nolan pleaded guilty to one.

The four men face between six and eight months in jail, five years’ probation—during which they cannot be involved in loan modifications or loan consulting—and restitution fees.

“Today’s sentencing should stand as a warning to anyone involved in exploiting TARP’s housing programs,” Romero said. “SIGTARP and our law enforcement partners will aggressively pursue offenders and hold violators accountable for their crimes.”

In all, SIGTARP has found hundreds of victims of the four men’s schemes.

The amount of restitution each man will pay will be determined in an upcoming hearing.

SIGTARP was aided by the United States Secret Service and several local law agencies in identifying and prosecuting the defendants.

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