Posted y CotoBlogzz 05-20-2010
ANGELES, CA - The California Attorney General today announced that
"nine men engaged in a Southern California boiler room, tricked out in
high-roller style with a roulette wheel and other casino equipment,
have been charged with 97 criminal counts for stealing at least $2.3
million from more than 1,500 desperate homeowners who were promised
loan modifications but received no relief.
Arrested Tuesday and
Wednesday night were Gregg Scott Quinn, 37, of Camarillo and Juan
Pierre Washington, 40, of Winnetka, who worked as company sales
managers and supervisors. They are being held at Los Angeles County
Gary Arnold Eisenberg, 71, of Westwood, a top telemarketer
with the company, and Ira Itskowitz, 58, a sales manager, each spent
more than five years in federal prison for previous fraud convictions
and are already in federal custody for violating parole in connection
with their participation in the scheme.
four principal owners of the business, Niv Iskin, 30, of Reseda, Reviv
Karpman, 38, of Tarzana, Tomer Kogman, 29, of Receda and Avraham
Yechizkia, 34, of Encino; and a sales manager, Barel Iskin, 23, of
Woodland Hills, are still being pursued by law enforcement.
The investigation started in March 2009 in response to
numerous consumer complaints against the defendants' Canoga Park-based
loan modification business, which operated as Mason Capital Group, LLC
and Gretchen Fox and Associates.
When agents executed a search
warrant at the office, they found a Las Vegas casino-themed sales floor
complete with craps, poker and black jack tables fashioned as
workstations, and a roulette wheel that top-selling telemarketers
spun for cash bonuses.
January 2008 and June 2009, the four owners took in at least $2.3
million in up-front fees, which ranged from $1,000 to $5,000, from more
than 1,500 homeowners throughout the country. In almost every case, no
loan modifications were completed, as promised. Financial records
indicate that the four owners spent hundreds of thousands on private
school tuition, travel, entertainment, shopping and other personal
expenses while running Mason Capital Group, LLC and Gretchen Fox and
The four owners used a
telemarketing operation that targeted homeowners facing mortgage
payment increases or foreclosure. During an initial call, the
telemarketers touted the company's team of "attorneys, forensic
accounting personnel, and loan negotiators" available to negotiate
reductions in interest rates, monthly payments and principal balances;
their suppos! ed 90% to 100% loan modification success rate and refund
guarantee. The telemarketers then collected financial information from
homeowners to determine if they "qualified" for the company's services.
after the initial call, homeowners received a follow-up call to inform
them that their case had been "reviewed" and "approved." Telemarketers
closed sales by insisting the approval would expire unless homeowners
acted quickly, while reminding them about the refund guarantee if
promised results were not achieved.
In fact, the company
completed very few loan modifications, rarely contacted lenders, failed
to honor the refund guarantee, employed unlicensed "loan processors"
and had no legal staff negotiating with lenders.
homeowners waited, they were told their loan modifications, or refunds,
would be voided if they tried independently to contact their lender.
Many lost their homes to foreclosure as a result.
To skirt the
state's foreclosure laws, avoid paying refunds and conceal profits,
the owners changed company names, claimed bankruptcy and shifted loan
modification files to another business they created called, American
Financial Group, LLC.
located victims in dozens of California cities, including: American
Canyon, Anaheim, Antioch, Artesia, Atwater, Bakersfield, Ceres, Chico,
Cotati, Cloverdale, Crestline, Delano, Elk Grove, Encino, Fountain
Valley, Fremont, Fresno, Guerneville, Hanford, Hayward, Hercules, Hood,
Indio, La Jolla, Lancaster, Laguna Hills, Lodi, Long Beach, Los
Angeles, Manteca, Modesto, Montclair, N. Hollywood, Newhall, Newman,
North Highlands, Oakdale, Oakland, Ontario, Palmdale, Pittsburg,
Pleasanton, Poplar, Porterville, Redding, Richmond, Riverbank, Rodeo,
Sacramento, San Jose, San Pablo, Santa Clara, Santa Rosa, Sebastopol,
Stanton, Stockton, Tracy, Tulare, Turlock, Union City, Upland, Valley
Village, Van Nuys, Visalia, W. Sacramento and Yuba City.
law, all individuals and businesses offering mortgage foreclosure
consulting or loan modification and foreclosure assistance services
must register with Brown's office and post a $100,000 bond. It is also
illegal for loan modification consultants to charge up-front fees for
Non-profit housing counselors certified by the
U.S. Department of Housing and Urban Development provide free help to
homeowners. To find a counselor in your area, call 1-800-569-4287.
If you are a homeowner who has been scammed, contact the AG's office at 1-800-952-5225 or file a complaint online at: www.ag.ca.gov/consumers/general.php
97 criminal counts filed against the nine defendants, include 63 counts
of grand theft, 26 counts of unlawful foreclosure consulting, 7 counts
of tax evasion and 1 count of conspiracy.
The United States Postal Inspection Service assisted in the investigation.