Scam Watch: Mortgage rescue, payday loans, real estate
Mortgage rescue –- A federal grand jury in Tucson has indicted two people on federal criminal charges related to a foreclosure rescue scheme in which they persuaded people to pay $500 fees to avoid foreclosure, but then made false bankruptcy filings in the homeowners’ names without their consent. Marshall E. Home and Margaret E. Broderick were charged with bankruptcy fraud, mail fraud and wire fraud. The charges carry maximum sentences of more than 100 years in prison plus fines.
Payday loans –- A man who operated a South Dakota-based payday lending company has agreed to stop illegally garnishing the wages of people who borrowed from his company, the Federal Trade Commission said in a news release. Martin A. Webb, who operated Big Sky Cash and Lakota Cash, unlawfully garnished customers’ wages without first obtaining a court order, the FTC said. The company attracted customers throughout the country through television and Internet advertising. To resolve a lawsuit that the FTC filed in federal court in South Dakota, Webb and his companies agreed to stop such collection practices. Webb and his companies offer short-term, high-fee, high-interest unsecured loans of up to $2,500, the FTC said.
Hotel development –- Two men have been sentenced to prison terms after pleading guilty to participating in an elaborate scheme that defrauded investors in two real estate development projects out of nearly $2 million. Lal Bhatia, 43, of Walnut Creek, Calif., and Steven E. Shelton, 61, of Las Vegas admitted that they tricked the victims by telling them they would use their money to build a hotel in Orlando, Fla., and an aquarium and entertainment complex in Houston, projects they never intended to build. Bhatia and Shelton met investors at a club in Las Vegas in 2003, presented them with glossy brochures and introduced them to accomplices who posed as lenders, including one who used the name “Sir Richard Benson,” an allegedly wealthy businessman from London. Bhatia was sentenced to five years, three months in prison and Shelton to six months. Both men were ordered to pay repay victims.
-- Stuart Pfeifer
Photo: A payday loan store, not related to the South Dakota companies. Credit: Los Angeles Times