Defendant Who Ran Scam to Reduce Mortgage Payments Plead Guilty to Ripping Off More Than 1,000 Homeowners

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1 Defendant Who Ran Scam to Reduce Mortgage Payments Plead Guilty to Ripping Off More Than 1,000 Homeowners CONNECTICUT More than 1,000 homeowners who had problems making mortgage payments believed that Ari Maleki and others could help them. The homeowners paid between $2,500 to $4,300 to get their mortgage payments reduced but ended up getting ripped off by Maleki s California-based companies. More than 1,000 homeowners, who suffered losses totaling more than $3 million, were duped by this scam, officials said. The ringleader Maleki, 33, of Santa Ana, California, plead guilty today to conspiring to defraud homeowners across the U.S. who were seeking reductions of their mortgage payments with extremely favorable terms, according to officials. The defendants are scheduled to be arraigned Wednesday in federal court in Bridgeport. Maleki used many business names: First Choice Financial Group, Inc., First Choice Financial, First Choice Debt, Legal Modification Firm, National Freedom Group, Home

2 Care Alliance Group, Home Protection Firm, Hardship Center, Network Solutions Center, Inc., Premiere Financial Center, Premiere Financial, Rescue Firm, International Research Group LLC, Hardship Solutions, American Loan Center, Loan Retention Firm, Clear Vision Financial, Green Tree Financial Group, Green Tree Financial, Enigma Fund, Inc., National Aid Group, Southern Chapman Group LLC, Save Point Financial, Best Rate Financial Solutions, Best Rate Financial Solution, Best Rate Financial, Best Rate Finance Group, Nation Star Financial, and Nation Star Fin Group. To get homeowners to pay the thousands of dollars in fees, the defendants made the following false representations: That the homeowners already had been approved for mortgage loan modifications on extremely favorable terms That the mortgage loan modifications already had been negotiated with the homeowners lenders That homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program If for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees. But homeowners had not been preapproved for mortgage loan modifications with lenders, mortgage loan modifications had not been negotiated with the lenders, homeowners had not qualified for and did not receive any financial assistance through government mortgage relief programs, and homeowners did not receive a refund of their fees upon request. Few homeowners ever received any type of mortgage loan modification through the defendants companies, and few homeowners received refunds of their fees.

3 Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The defendants also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California. On January 21, 2016, a grand jury in New Haven returned an indictment charging Maleki and six other California residents with conspiracy and fraud offenses related to this scheme. The defendants were arrested on Jan. 26. Maleki plead guilty to one count of conspiracy to commit mail and wire fraud, an offense that carries up to 20 years in prison. He also has agreed to pay restitution of about $3 million. Sentencing is scheduled for June 14. Maleki also has agreed to forfeit approximately $350,000 that investigators seized from various bank accounts, about $362,000 sized from a Bitcoin account, a $100,000 cashier s check, and a 2013 Ferrari 458 Italia. Three other defendants, Mehdi Moarefian, a.k.a. Michael Miller, 36, and Daniel Shiau, a.k.a. Scott Decker, 30, both of Irvine, Calif., and Serj Geutssoyan, also known as Anthony Kirk, 33, of Santa Ana, Calif., previously plead guilty to the same charge and await sentencing Feds: Two Real Estate Investors Rigged Bids at

4 Public Foreclosure Auctions GEORGIA Two Georgia real estate investors plead guilty today for their roles in bid-rigging and mail fraud conspiracies at public real estate foreclosure auctions in Georgia, according to officials. The two are the eleventh and twelfth defendants charged in this ongoing investigation, officials said. Paul Chen and Ira Eisenberg each admitted that they agreed not to bid against others at certain public real estate foreclosure auctions. In addition, they conspired to defraud mortgage holders and homeowners using the mail system, officials said. These individuals unlawfully rigged home foreclosure auctions, and then used payoffs and private side auctions to divide among themselves money that should have gone to mortgage holders and homeowners, said Assistant Attorney General Bill Baer of the Justice Department s Antitrust Division. Chen admitted to participating in the conspiracy in Fulton County, Georgia, from as early as February 2009 until at least March Eisenberg admitted to being involved in August 2009 until at least February Additionally, Chen admitted to participating in the DeKalb County, Georgia, conspiracy from November 2009 until September 2011.

5 According to documents filed with the court, the purpose of the conspiracies was to suppress and restrain competition and divert money to the conspirators that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties and, in some cases, the defaulting homeowner. 75-Year-Old Mortgage Rescue Operator Jailed for Eight Years, Racked Up 250 Victims Riverside, California A man who operated a bogus mortgage rescue scheme in which he made false promises to dozens distressed homeowners, filed fraudulent bankruptcies to delay foreclosure and rented the properties to third parties as the foreclosure proceedings were delayed was sentenced today to eight years in federal prison. U.S. District Judge Virginia A. Phillips sentenced Terry Meisinger, 75, and rejected his arguments that his age merited a lower sentence. The judge noted that, even if Meisinger was released from

6 prison when he was 80 years old, he would still pose a danger to the public. Judge Phillips also ordered Meisinger, of Seal Beach, to pay $1.5 million in restitution to his victims. In papers filed in relation to today s sentencing, prosecutors said that there were more than 250 victims of the scheme, including homeowners, lenders, and renters. Meisinger collected more than $1.5 million in illicit rent payments on more than 100 properties. Meisinger plead guilty in October to two counts of wire fraud. This man earned significant profits as the result of his scheme profits that came as the result of significant financial harm inflicted upon victims, said U.S. Attorney Eileen M. Decker. This scheme operated for years and continued after my office filed a civil lawsuit and he was ordered to cease his fraudulent activities. This trail of victims, most of whom lost their homes, has earned this defendant the lengthy prison term imposed today. When he pleaded guilty, officials said Meisinger specifically admitted that he defrauded a distressed homeowner by inducing him to sign a quitclaim in exchange for promises that included negotiating a short-sale agreement with his lender that would free the homeowner from his mortgage on a property in North Las Vegas, Nevada. But, instead, Meisinger caused a deed of trust to be recorded on the property, which was followed by a fraudulent bankruptcy on behalf of the person who supposedly now held an interest in the home. Meanwhile, Meisinger rented out the home to another person while foreclosure proceedings were stayed as a result of the

7 fraudulent bankruptcy. Meisinger repeated the process of causing the recording of deeds of trusts in the names of various beneficiaries whose identities he controlled and causing the filing of bankruptcies on behalf of those lenders to delay the foreclosure proceedings, while collecting rents on property in North Las Vegas, according to the plea agreement filed in this case. Further, officials said he caused more than 300 bogus bankruptcy petitions to be filed in the names of numerous individuals who had no knowledge their identity was being used. Meisinger also admitted that his illegal conduct violated Judge Phillips court order in a prior civil matter barring Meisinger from participating in the home finance or real estate industries for 10 years, according to officials. In that order, Meisinger was also barred from filing bankruptcy petitions, officials said. Judge Phillips additionally imposed a $5 million civil fine on Meisinger. HUD-OIG continues to vigilantly protect FHA insured borrowers from those who conduct fraudulent loan modification schemes. This significant sentence demonstrates our commitment to protecting HUD s important work in providing affordable home ownership, said James Todak, Special Agent in Charge of Housing and Urban Development s Office of the Inspector General. The U.S. Department of Housing and Urban Development, Office of the Inspector General investigated this case.

8 Four Sentenced for Scamming Financially Distressed Homeowners Out of Millions of Dollars RIVERSIDE, CALIF. Four people who worked at a Rancho Cucamonga business that offered bogus loan modification programs to thousands of financially distressed homeowners were sentenced today to federal prison, officials announced today. U.S. District Judge Virginia A. Phillips sentenced one of the leaders of the scheme to 20 years in prison, officials said. The victims who lost more than $7 million when they paid for services that were never provided. The Southland residents sentenced today were convicted of federal fraud charges for their roles in a telemarketing operation known under a series of names including 21st Century Legal Services, Inc. that bilked more than 4,000 homeowners across the nation, many of whom lost their homes to

9 foreclosure, according to authorities. A total of 11 defendants linked to 21st Century have been convicted of federal fraud charges as a result of an investigation, authorities stated. The defendants sentenced today by Judge Phillips were: Christopher Paul George, 45, of Rancho Cucamonga, a co-owner of 21st Century, who was sentenced to 20 years in federal prison Crystal Taiwana Buck, 40, of Long Beach, a sales closer who persuaded numerous victims to pay fees to 21st Century, who received a sentence of five years Albert DiRoberto, 62, of Fullerton, who handled both sales and marketing which included making a commercial for 21st Century and preparing talking points to respond to negative publicity was sentenced to five years in prison Yadira Garcia Padilla, 38, of Rancho Cucamonga who handled client complaints and refund requests, and who posted bogus positive reviews about 21st Century on the Internet was sentenced to four years in prison. George, Buck and DiRoberto were sentenced after being found guilty by a federal jury in June on various fraud charges. Padilla pleaded guilty in In addition to the prison term, officials said Judge Phillips today ordered George to pay $7,065,117 in restitution to victims of the scam. Buck, DiRoberto and Padilla were ordered to return to court next month for restitution hearings. During a 15-month period that began in the middle of 2008, a

10 Rancho Cucamonga woman Andrea Ramirez, 47, who previously pleaded guilty to fraud charges. She operated 21st Century, which defrauded financially distressed homeowners by making false promises and guarantees regarding 21st Century s ability to negotiate loan modifications for homeowners. She is scheduled to be sentenced in November, officials said. Employees of 21st Century made numerous misrepresentations to victims during the course of the scheme, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the U.S. government, officials said. Victims were generally instructed to stop communicating with their mortgage lenders and to cease making their mortgage payments In addition to being a co-owner of 21st Century, George acted as a sales manager, and he ran his own sales office there for several months. George instructed 21st Century employees to make misrepresentations to distressed homeowners, including guaranteeing that 21st Century would obtain loan modifications and telling homeowners that payments made to 21st Century would go towards homeowners mortgages. 21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings, and the company controlled websites that advertised loan modification services.

11 Once they contacted the distressed homeowners, 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, 21st Century employees told homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when Ramirez, George and their codefendants simply were pocketing the homeowners money, officials said. In addition to Ramirez and the four sentenced today, six other defendants previously pleaded guilty: Michael Bruce Bates, of Moreno Valley, who is scheduled to be sentenced on Oct. 19 Michael Lewis Parker, of Pomona, who is scheduled to be sentenced on Nov. 19 Catalina Deleon, of Glendora, who is scheduled to be sentenced on Dec. 14 Hamid Reza Shalviri, of Montebello, who is scheduled to be sentenced on Dec. 7 Mindy Sue Holt, of San Bernardino, who is scheduled to be sentenced on Oct.26 Iris Melissa Pelayo, of Upland, who has been sentenced to four years in federal prison.