Authorities unsealed a 40-count indictment against six individuals who allegedly targeted distressed homeowners with the false promise of loan modification services following the 2008 financial crisis, according to an announcement made Friday by the U.S. District Court in Salt Lake City.
The six individuals, ranging in age from 24 to 66, supposedly scammed more than 10,000 victims in almost every state in the country, with losses exceeding $33 million, the U.S. Attorney's Office said in a news release. Arrest warrants for the suspects in the case, all but one of whom live in Utah, were executed Thursday.
According to the federal investigation, the alleged criminals started a loan modification business in 2009 under the name of CC Brown Law LLC. The firm hired attorneys to give the appearance that business was a law firm, but had the lawyers provide little or no actual legal services.
The company then procured information regarding homeowners who were delinquent on their mortgage payments and used a largely telemarketing-based scheme to sell their services. CC Brown falsely advertised a 90% success rate in obtaining loan modifications, claiming to have secured over 6,000 successful loan modifications.
In reality, the individuals pocketed the homeowners' money and did not fulfill their promises, even causing some customers to lose their homes to foreclosure while waiting for a loan modification.
Complaints to state and federal agencies in Utah led to the investigation. The U.S. Attorney's Office for the district of Utah will prosecute the case.
The 40 counts the individuals face altogether include conspiracy, mail fraud, wire fraud, telemarketing fraud, conspiracy to commit money laundering and money laundering. The first three indictments carry a maximum sentence of up to 30 years for each count if the defendant in question is found guilty. The other crimes carry maximum sentences between 10 and 20 years per count.
The multi-agency investigation included individuals from the Office of the Special Inspector General for the Troubled Asset Relief Program, the IRS, the FBI, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau and the Federal Housing Finance Agency.
