Perpetrators of Foreclosure Rescue Scam Sentenced
The operators of a national online foreclosure rescue scam that deceived hundreds of distressed homeowners into surrendering their properties to the company have been sentenced.
Mark Farhood and Jason Sant each pleaded guilty to conspiracy charges in May. U.S. District Judge Anthony J. Trenga from the Eastern District of Virginia announced an 11-year prison sentencing for Farhood, while Sant has to serve six years in jail.
Each defendant was also ordered to forfeit approximately $2 million in fraud proceeds to the government, along with various bank accounts and other assets.
According to court documents, the conspirators co-owned Home Advocate Trustees, which also went by the names Walk Away Today, First Equity Trustees, Home Security Consultants, Sell Fast USA, Short Sale Buyer, USA Sell House Fast and USA Rental Housing. The scam also involved two websites: walkawaytoday.org and sellfastusa.com.
The defendants marketed the businesses nationwide as purchasers of distressed real estate to help vulnerable homeowners avoid foreclosure and all the negative effects this could have on their credit scores.
The companies told homeowners they could negotiate with lenders to purchase mortgage notes at a discount and falsely claimed to be in business for 17 years, have a 90% success rate in obtaining these notes, and claimed to be the nation’s largest volume buyer of short-sale and overleveraged real estate.
However, no negotiations with lenders ever occurred, the defendants admitted. They added that the scheme was a way for them to claim hundreds of residential properties at basically no cost and then reap millions of dollars in profits by renting the homes to unsuspecting tenants.
Furthermore, as part of the scam, the operators submitted fraudulent loan modification applications to lenders under the Treasury Department’s Making Home Affordable Program in the name of the homeowners without their consent. These inaccurate applications were meant to delay the lenders from foreclosing on the properties that they controlled to help the conspirators maximize the time period during which they could collect rental income.
Eventually, the homes sold to Home Advocate Trustees and its related entities ended in foreclosure, resulting in the rental tenants being evicted from their properties.
“Farhood should spend the next 11 years in prison thinking about how he preyed on and cheated 389 distressed homeowners out of their homes by ‘buying’ their homes in fake sales for $10 per property and then renting out the homes for $4 million, which he used to fund construction on his $1 million home in Costa Rica,” said Christy Romero, special inspector general for the Troubled Asset Relief Program.