Lawsuits filed against 21 people, 14 companies suspected in loan rescue scams

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The Federal Trade Commission and California Atty. Gen. Jerry Brown unveiled lawsuits today designed to shut down 14 Southern California companies and 21 people accused of running loan-modification scams that ripped off thousands of struggling homeowners looking to avoid foreclosure.

The lawsuits were announced as part of a nationwide crackdown on foreclosure rescue scams known as ‘Operation Loan Lies,’ which pairs the FTC with state and local authorities to go after fraudulent companies preying on homeowners desperate for mortgage relief.

Under the operation, 189 lawsuits, cease-and-desist orders and other legal actions have been filed in 20 states, FTC Chairman Jon Leibowitz announced at a morning press conference held with Brown in downtown Los Angeles.

Such fraudulent schemes are rampant in California, Leibowitz said.

‘Part of the reason why we’re out here today is because California consumers have been among the most hard hit and also because a lot of these malefactors are based in Orange County,’ Leibowitz said. ‘It’s one of the hotbeds of mortgage scam activity.’

Brown and the FTC are demanding millions in civil penalties, restitution for scammed homeowners and permanent injunctions to prevent the defendants and companies from offering mortgage-relief programs.

In documents filed in U.S. District Court in Los Angeles and Orange counties, Brown and the FTC allege that the California firms charged from $500 to $5,500 in upfront fees for loan modification services, often promising to help modify mortgages to make payments more affordable.

Firms named in the suits include:

• U.S. Homeowners Assistance, based in Irvine, and its executives Hakimullah ‘Sean’ Sarpas and Zulmai Nazarzai. U.S. Homeowners Assistance also did business as Statewide Financial Group Inc.

• U.S. Foreclosure Relief Corp. and its legal affiliate, Adrian Pomery, based in the city of Orange

• Home Relief Services, with offices in Irvine, Newport Beach and Anaheim, and its legal affiliate, the Diener Law Firm

• RMR Group Loss Mitigation and its legal affiliates Shippey & Associates and Arthur Aldridge. RMR Group has offices in Newport Beach, Orange, Huntington Beach, Corona and Fresno

• United First Inc. and its lawyer affiliate, Mitchell Roth, based in Los Angeles.

Representatives for the accused companies and individuals weren’t immediately available for comment.

[Updated at 11:55 a.m., July 16: An earlier version of this post described We Beat All Rates and U.S. Homeowners Preservation Center as alternate business names of U.S. Homeowners Assistance. Those two companies aren’t affiliated with U.S. Homeowners Assistance and were sued separately.]

-- Nathan Olivarez-Giles