How to Get Out of Debt With the Get Out of Debt Guy » law

Tax Refund Check Cashing Scheme Hits Southern Florida

Amanda Miller — Thu, 26 Jan 2012 14:05:41 +0000

As tax season rolls around it’s no surprise to see tax refund check cashing schemes arising in the news.

Announced Monday was the filing of a criminal Information charging defendants Wilson Lau, and his wife, Kate Yuee Lau, for their participation in a check cashing scheme involving more than $5 million in fraudulently obtained tax refund checks and tax refund anticipation loan checks.

U.S. Attorney Wifredo A. Ferrer stated, “It is time for tax refund scammers to realize that we will not allow them to steal taxpayers’ hard-earned money. Today’s charges are just the beginning. We now join forces with the IRS and Secret Service to combat tax refund fraud and identity theft. To this end, we will make the investigation and prosecution of these cases a top priority.”

IRS Deputy Commissioner for Services and Enforcement, Steven Miller, states: “The IRS is aggressively pursuing those who steal others’ identities in order to file false returns… Our cooperative work with the U.S. Attorney’s Office will help protect taxpayers from being victimized by identity theft. The IRS is taking additional steps this tax season to further prevent, detect and resolve identity theft cases as soon as possible.”

IRS-CI Special Agent in Charge Jose Gonzalez stated, “We do recognize the impact this type of crime has on the American public and therefore I will continue to increase my resources, in conjunction with the U.S. Attorney, to investigate and bring to justice those groups of individuals who willingly utilize stolen identities to defraud the government. Make no mistake, the filing of a false claims and any financial transaction in furtherance of this crime will be investigated. Together with our law enforcement partners, we will aggressively investigate identity thieves and their accomplices and will hold them accountable for their actions” – Source.

Raleigh Native Indicted In Connection With Fraud And Extortion

Amanda Miller — Wed, 25 Jan 2012 20:12:10 +0000

From How to Get Out of Debt

The former President of Encap Golf Holdings LLC (“Encap”), William Gauger III, was indicted this week for his participation in a scheme to extort approximately $100,000 from a financial consultant and a fraudulent invoicing scheme relating to his work for a New Jersey-based management firm.

Gauger allegedly hired his brother-inlaw Craig Groce, who was originally charged along with Gauger by Complaint in July 2011, and the financial consultant, to provide services on various redevelopment projects in New Jersey.

According to the Indictment:

In August 2006, the financial consultant received “success fees” of approximately $881,500 for his services in arranging two loans of $69.4 million and $26.3 million for a redevelopment project in New Jersey. Gauger allegedly demanded that the financial consultant pay a portion of those fees – $100,000 – to his brother-in-law, threatening him with the future loss of business if he did not comply. The financial consultant made the payment to Groce in September 2006, even though he had not provided any services to the financial consultant.

Although Gauger allegedly told the financial consultant that the $100,000 payment was for his brother-in-law, Gauger was actually the beneficiary. Gauger had Groce make payments for Gauger’s benefit using the money allegedly extorted from the financial consultant. The payments included: $5,506 for a personal computer and high-definition, liquid crystal display television; $6,250 for season hockey tickets; $6,000 for a donation to a private school attended by one of Gauger’s children; a $10,000 donation to a soccer club in which
Gauger’s children were members; a $10,000 payment to Gauger’s father; and a $2,232 payment for a laptop computer.

The Indictment further charges Gauger with submitting and approving fraudulent invoices and expense reports in connection with his management of redevelopment projects in New Jersey that were undertaken by a private equity investment firm located in right here in Raleigh, North Carolina, (the “Raleigh Firm”). Coincidently, Gauger hails from one of Raleigh’s neighboring city’s, Morrisville, North Carolina.

Gauger, his brother-in-law, who also performed consulting services, and the financial consultant allegedly submitted false and fraudulent invoices and expense reports for reimbursement to the Raleigh Firm and its project specific limited liability companies, including Encap. Their alleged fraudulent vacation expenses, political donations, dinners with their spouses, and other non-business expenses were ultimately paid by Encap and the other companies.

Encap won a contract in 2000 from the New Jersey Meadowlands Commission to cap and close four landfills in the Meadowlands and to sell the land for residential, commercial and recreational development, including golf courses. In December 2005, Encap received more than $300 million in publicly sponsored bond financing, including more than $200 million in loans from the New Jersey Department of Environmental Protection and New Jersey Environmental Infrastructure Trust. Encap’s project in the Meadowlands was the subject of a report by the New Jersey Office of Inspector General in February 2008. Encap filed for bankruptcy protection later in 2008 and did not complete the project.

Gauger is charged with three counts of mail fraud, five counts of wire fraud, two counts of conspiracy to commit mail and wire fraud, and one count of extortion obstructing commerce – Source.

Investment Fraudster Defrauds Over 200 Out Of $14 Million

Amanda Miller — Mon, 23 Jan 2012 20:02:12 +0000

From How to Get Out of Debt

Bradley Stark, the fraudster defendant who represented himself at trail was convicted by a federal jury for deceiving investors about an investment scheme that involved more than 200 victims and more than $14 million.

Following Stark’s five-day trial he has been convicted on all counts of an indictment charging him with seven counts of wire fraud and one count of securities fraud related to his fraudulent securities offerings.

The government presented evidence at trial that Stark incorporated Sardaukar Holdings as an international business corporation in the British Virgin Islands, to engage in the business of investing and managing clients’ financial assets. From October 2004 thorough early July 2005, Stark operated Sardaukar from his residence in Riverside, California.

Stark used materially false and fraudulent representations to solicit individuals to invest in Sardaukar. For example, according to evidence presented at trial, he represented to investors, and encouraged and allowed others to represent to investors, that:

he had previous institutional trading experience;
that he was a registered securities broker or dealer;
he had hundreds of millions of dollars in investments from private and institutional clients;
he would invest the investor’s funds in sophisticated financial transactions, including tri-party repurchase agreements, commodities futures and currency trading;
historically, investments in Sardaukar had yielded high rates of return, often more than 20 to 30 percent per month; and
for $50,000 investors could purchase an insurance contract through him that would insure invested principal against any loss.

Stark also knowingly and intentionally failed to advise investors that he had been convicted in April 2003 of a federal felony offense, uttering a false and counterfeit security, and in May 2003 in the State of Colorado, of fraud by check.

In addition, the government presented evidence at trial that Stark squandered the majority of investor funds on luxury cars, travel/entertainment and jewelry. He also transferred more than $1 million to his wife.

Based on Stark’s representations, several individuals in the NDTX entered into agreements to provide funds to him for investment. These individuals in turn, using many of the false representations Stark had made to them, raised money from investors in the NDTX and elsewhere, which was sent to Stark for investment.

The largest investor in Sardaukar Holdings was a company in the Dallas area, Megafund Corporation, which was run by Stanley Leitner. Leitner, who testified for the government at trial, was previously convicted in the NDTX of wire fraud, securities fraud and money laundering, in connection with his operation of Megafund, and is currently serving a 210-month federal prison sentence.

Each of the wire fraud counts carries a statutory maximum sentence of 20 years in prison and a $250,000 fine; the securities fraud count carries a maximum statutory sentence of five years in prison and a $250,000 fine – Source.

FTC And CFPB Pledge To Work Together To Protect Consumers

Amanda Miller — Mon, 23 Jan 2012 19:46:46 +0000

From How to Get Out of Debt

It was announced today that the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) have signed an agreement to coordinate efforts to protect consumers in an effort to avoid duplication of federal law enforcement and regulatory efforts.

The memorandum of the two agencies’ understand can be viewed here.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, requires the CFPB and the FTC to work together to coordinate their enforcement activities and promote consistent regulatory treatment of consumer financial products and services.

In the memorandum of understand, the agencies have supplemented the requirements of the Dodd-Frank Act to create a strong and comprehensive framework for coordination and cooperation. Among the points the two agencies have agreed to:

meet regularly to coordinate upcoming law enforcement, rulemaking, and other activities;
inform the other agency, absent exigent circumstances, prior to initiating an investigation or bringing an enforcement action. This notice will prevent duplicative or conflicting enforcement efforts and undue burdens on industry;
consult on rulemaking and guidance initiatives to promote consistency and reflect the experience and expertise of both agencies;
cooperate on consumer education efforts to promote consistency of messages and maximum use of resources; and
share consumer complaints.

The agencies look forward to receiving feedback on the agreement from consumers, industry, and other members of the public, and are committed to finding ways to further strengthen their coordination efforts.

FTC Chairman, Jon Leibowitz, says “The FTC has always been committed to protecting consumers and legitimate companies from bad actors in the financial marketplace… Now we have another cop on the beat, and this agreement ensures that businesses will not be double-teamed by the two agencies.”

New Computer Virus Commits Post Transaction Attacks On Your Bank Account

Amanda Miller — Thu, 12 Jan 2012 19:25:33 +0000

From How to Get Out of Debt

When my grandma, god bless her soul, hears about a new scam, fraud or any form of financial trickery she immediately calls me up and warns me to stop whatever I’m doing and take notes. To her knowledge I don’t belong to more than one social media network, I don’t buy items online, I don’t apply for credit cards and the big one: I don’t use my debit card. And of course, I do all of these things (all in moderation, of course). These are all perfectly orchestrated white lies that I tell her so that I don’t have to sit through one more speech about about how DANGEROUS all of these things are for you. And grated, yes, all of those things I just mentioned do possess a level of danger and potential harm. But so does crossing the street (don’t tell her, but sometimes I don’t cross at the crosswalk).

Hopefully she’s not keeping up with my articles and reading this post today (Grandma: if you are, I love you and realize the jig is up!) but I bring to you news of a new alert to be forewarned about, checking your bank account online. Really.

An Israeli-based Security firm, Trusteer, found a new and elaborate computer virus that allows fraudsters to not only steal money from your bank account but to also cover its tracks. The virus came to attention after a large, unnamed, US retail bank spotted it and shared it with the firm.

The new virus is similar to that of a SpyEye Trojan horse where a robber swaps out surveillance camera footage to cover their thief-like tracks from security guards, but instead of a video, hackers are preventing bank account holders from noticing any missing money.

It’s kind of ingenious. But bad. Very, very bad.

Trusteer is calling it a “post transaction” attack since the virus mainly controls what a victim sees after the fraud occurs. Chief technology officer for Trusteer, Amit Klien, says, “I predict that the use of post transaction attack technology will significantly increase as it enables criminals to maximize the amount of fraud they can commit using their initial investment in malware toolkits and infection mechanisms” – Source.

Apparently, if a victim account holder checked their balance at an ATM or even using an uninfected computer they would be able to detect the fraudulent transactions. The virus doesn’t go so far as to impact the bank’s systems but only the web browser on an infected system’s computer.

That being said, paper statements would reveal the fraud. Bad news for trees, good news for banking customers that receive paper statements each month! Sadly, only relying on paper statements could leave you a full calendar month behind when it comes to spotting the fraudulent transactions – Source.

The best way to combat this new virus is to make sure that the computers you use are up to date with the latest and best anti-virus software.

Or, as my grandmother would prefer, if you want money or a balance statement you’re going to have to get it all Jimmy-Stewart-It’s-A-Wonderful-Life-style and walk into a bank.

Six Hundred Out Of $74 Million In Ponzi Scheme

Amanda Miller — Wed, 04 Jan 2012 19:58:07 +0000

From How to Get Out of Debt

Douglas Vaughan faces 10 to 12 years in prison after pleading guilty to wire and mail fraud charges that involved his operation of a “Ponzi” scheme where he defrauded around 600 investors of more than $74 million.

Vaughan promised extraordinary returns which he obviously did not follow through with. In February of 2011, in an indictment alleging that, between 2005 and 2010, Vaughan operated a promissory note investment program, which he marketed as a means of generating revenue to grow his real estate business, Vaughan Company Realtors (VCR).

Vaughan entered guilty pleas to Count 1 and 4 of a 30-count indictment charging him with wire fraud and mail fraud, respectively. Under the terms of his plea agreement, Vaughan will be sentenced to a term of imprisonment between 10 and 12 years. Vaughan also faces up to five years of supervised release following imprisonment, a fine of up to $250,000, or twice the gross gain or gross loss resulting from his offenses, whichever is greater, as well as any restitution ordered by the Court.

The plea agreement also requires that Vaughan immediately forfeit to the United States previously-seized funds in the amount of $38,298.24 and real property located in Spring Valley, Nevada, and that Vaughan agree to the imposition of a money judgment against him in the amount of $74,745,723.93, which represents
a portion of the gross proceeds that he derived from the offenses charged in the indictment.

The plea agreement also requires that Vaughan resolve two other pending cases: a civil case filed against Vaughan by the Securities and Exchange Commission (SEC) in federal court, and a bankruptcy case initiated by Vaughan in federal bankruptcy court. In the SEC case, Vaughan will consent to the entry of a judgment that permanently enjoins him from violating the federal securities laws. Vaughan also is required to consent to an order by the SEC in an administrative proceeding that bars him from associating with any broker, dealer or investment advisor, and from participating in any stock offerings. In the bankruptcy case, Vaughan is required to enter into a stipulated judgment that denies him a discharge from bankruptcy.

Under the terms of the plea agreement, the U.S. Attorney’s Office will move to dismiss the remaining 28 counts of the indictment after sentence has been imposed on Vaughan. Vaughan remains on conditions of release under pretrial supervision pending his sentencing hearing, which has yet to be scheduled – Source.

AmBanc, Commercial Capital Banc and U.S. Underwriting Fraud Scheme

Amanda Miller — Fri, 30 Dec 2011 15:05:22 +0000

From How to Get Out of Debt

Last month the United States Attorney’s Office announced that James France was indicted for wire wire fraud in connection with an advance fee scheme.

Apparently, France held himself out as being in the business of commercial lending, and operated his business under various names such as AmBanc, Commercial Capital Banc and U.S. Underwriting. The indictment alleges that from around 2005 until sometime in 2010, France executed a scheme to obtain money from others by falsely representing that he had the ability to obtain financing for their commercial projects.

The indictment alleges that France made numerous false representations to make himself appear to be a successful businessman, including claiming that he owned or was involved in coal mining businesses, that he once owned a bank and that he was a direct lender.

According to the indictment, in order to secure his services, France persuaded clients to pay him a deposit in advance which was to be used to cover the expenses of securing funding for their projects. Instead, he allegedly used clients’ money for other purposes such as personal expenses, paying himself a salary and giving money to others.

France faces a maximum of 20 years in prison and/or fines up to $250,000 – Source.

Florida’s Foreclosure Solution Specialists Operators Charged With Fraud

Amanda Miller — Tue, 27 Dec 2011 14:15:27 +0000

From How to Get Out of Debt

Earlier this month it was announced that Lisa Wright, Cathy Saffer and Carrington Coombs were all charged with fraud in a Florida foreclosure rescure scheme. Wright and Saffer were charged with conspiracy to defraud homeowners and banks in a foreclosure rescue scheme. Coombs, a certified public accountant, was also charged as a participant in the scheme.

A federal grand jury in the Southern District of Florida returned an indictment charging Wright and Saffer with one count of conspiracy, three counts of mail fraud and three counts of wire fraud. The grand jury charged Coombs with one count of conspiracy and one count of wire fraud.

The indictment states that Wright and Saffer operated an alleged business called Foreclosure Solution Specialists (FSS) from 2006 to 2009. Through FSS, Wright and Saffer allegedly targeted homeowners facing foreclosure, advertising that FSS could assist those homeowners in remaining in their homes. According to the indictment, when contacted by distressed homeowners seeking assistance, Wright and Saffer misrepresented to those homeowners that their homes would be sold to investors. Wright and Saffer also allegedly claimed that customers could remain in their homes after the sales and promised them an opportunity to repurchase the homes at a later date. According to the indictment, rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers whom they paid to participate in the scheme.

The indictment further alleges that Wright and Saffer made numerous misrepresentations on loan applications regarding the purchasers’ net worths, incomes and employment histories in order to induce lenders to fund loans. The indictment alleges that, as part of the scheme, Wright and Saffer paid Coombs to sign a letter which falsely vouched for the fraudulent information on various loan applications.

According to the indictment, these sham sales drew equity out of the homes, which Wright and Saffer pocketed for their own purposes. After doing so, Wright and Saffer allowed the loans to go into foreclosure. Homeowners ultimately lost all of the equity in their homes, and most of the victims were forced to move out of their homes.

“Protecting Americans from financial fraud is one of our top priorities,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “Foreclosure rescue scams, like the one alleged here, are especially insidious because they seek to take advantage of those most at risk of losing everything. These charges demonstrate that we will aggressively prosecute individuals who we believe prey on homeowners struggling in these tough financial times” – Source.

Two More Charged In Rothstein Billion Dollar Fraud Scheme

Amanda Miller — Mon, 26 Dec 2011 20:10:09 +0000

From How to Get Out of Debt

On the first of this month it was announced that two more Rothstein Associates were charged in connection with the billion dollar fraud scheme.

Announced was the filing of charges against William Boockvor and Marybeth Feiss for conspiring to commit crimes through the operation of the former Fort Lauderdale law firm of Scott W. Rothstein, called Rothstein, Rosenfeldt and Adler, P.A. (RRA).

The defendants were both employees of RRA. Boockvor performed various administrative functions, including bookkeeping for RRA’s operating account, and oversaw various banking operations. Feiss was an administrative assistant to Scott W. Rothstein at RRA.

The two separate criminal Informations were filed earlier this month. One Information charges Boockvor with conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 371, for his participation in Rothstein’s Ponzi scheme.

Feiss is charged in a separate Information with conspiracy to violate the Federal Election Campaign Act and to defraud the United States, in violation of Title 18, United States Code, Section 371. If convicted, each defendant faces a maximum statutory sentence of up to five years in prison.

According to Information, Boockvor assisted Rothstein to execute and perpetuate Rothstein’s fraudulent investment scheme at RRA. In this regard, Boockvor is alleged to have provided TD Bank employees with falsely inflated balance statements of RAA’s trust accounts at TD Bank.

In addition, Boockvor allegedly assisted TD Bank employees to prepare envelopes for the fraudulent account balance statements and cover letters that would falsely confirm the accuracy of the attached account balances. Thereafter, TD Bank employees would provide these envelopes (containing the falsely inflated account statements and cover letters) to Rothstein in the presence of investors or their representatives.

Boockvor also allegedly provided the inflated TD Bank trust account balance statements to a co-conspirator who posed as a TD Bank employee. This co-conspirator would, in turn, provide the fraudulent balance statements to investors or their representatives. In this way, investors were misled to believe that the account balances were sufficient to fund their investments.

According to the Information against Feiss, her duties at RRA included helping to organize events, such as functions for political candidates, and assisting in the collection of campaign contributions made at those events. To circumvent federal campaign finance laws that limited the amounts that donors could contribute, Rothstein enlisted some of the attorneys, administrative personnel at RRA, and others associated with RRA, including Feiss, to make political contributions to various political campaigns.

Rothstein bundled these contributions to contribute more than $1 million on behalf of RRA to various political committees associated with John McCain’s presidential election campaign. Subsequently, Rothstein used monies from RRA to reimburse these individuals for their purported contributions. To disguise the repayment of the political contributions, RRA would classify the reimbursement checks to these individuals as bonuses or miscellaneous expenses. As a result of the bundled contributions made on behalf of RRA, Rothstein was named a delegate to the 2008 Republican National Convention and was appointed as a member of the Judicial Nominating Committee for the State of Florida.

On the date of the announcement U.S. Attorney Wifredo A. Ferrer stated, “The tentacles of Rothstein’s billion dollar Ponzi scheme reached far and wide. Rothstein relied on many people to facilitate his fraud. Until today, we had charged six individuals for their roles in this massive scheme. Today’s charges bring the tally to eight defendants, including federal campaign finance charges resulting from the illegal reimbursement of campaign contributions to RAA employees. But we are not done yet” – Source.

Multi-Million Dollar Stock Fraud Of Signalife

Amanda Miller — Fri, 23 Dec 2011 17:00:53 +0000

From How to Get Out of Debt

An attorney for South Carolina health care device company, Signalife, was arrested last week at Los Angeles International Airport (LAX) on charges related to his alleged role in a multi-million dollar market manipulation fraud scheme.

The indictment charges Mitchell Stein with one count of conspiracy to commit mail fraud and wire fraud, three counts of mail fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering and one count of conspiracy to obstruct justice. The indictment also seeks forfeiture of the proceeds of the offenses.

The indictment alleges that Stein engaged in a scheme to artificially inflate the stock price of Signalife Inc. by creating the false impression of sales activity for the company. Signalife, now known as Heart Tronics, was a publicly traded company that purportedly sold electronic heart monitoring devices. According to the indictment, Stein’s wife held approximately 85 percent of the shares of Signalife.

The indictment alleges that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers and then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. The indictment also alleges that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.

The indictment further alleges that Stein and his co-conspirators sold shares of Signalife stock at inflated prices, disguising the fact that they were doing so by placing the shares in purportedly blind trusts. In addition to selling shares in that manner, Stein and his co-conspirators allegedly also caused Signalife to issue additional shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein and his co-conspirators.

According to the indictment, Stein also conspired to obstruct an SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.

If convicted, Stein faces up to 20 years in prison on each count of mail fraud, wire fraud, securities fraud, and conspiracy to commit mail and wire fraud, as well as up to 10 years in prison on each count of money laundering and up to five years in prison on the conspiracy to obstruct justice count.

The SEC conducted a parallel investigation and today announced its filing of a civil enforcement action against Stein and others. The department thanks the SEC for its substantial assistance in this matter – Source.

Former Inmate Sentenced To More 12 Years For Schemes From Behind Bars

Amanda Miller — Thu, 08 Dec 2011 17:47:36 +0000

From How to Get Out of Debt

And AGAIN, a criminal thought he could commit the same crime he had already committed and gotten jailed for. Former inmate, Danwine Dewayne Renard, was sentenced to a 144 month term in prison following his plea of guilty to participating in an identity theft scheme while incarcerated. Renard has also been ordered to pay 122,943.72 in restitution and a $49,000 forfeiture judgment. He will also serve a five year supervised release.

In July of 2011, Renard entered a guilty plea to four counts superseding indictment charging conspiracy to commit mail, wire and bank fraud; aiding and abetting bank fraud; AND two counts of aiding and abetting aggravated identity theft.

At the time of his plea, Renard entered into a factual stipulation which indicated that beginning in approximately July, 2008, and continuing until on or about November, 2010, in Madison and St. Clair Illinois Counties, and elsewhere, Renard, acting with others, including Selena Marie Bradford (aka Selena Renard), engaged in a scheme involving identity theft, fraudulent identification documents, mail fraud, wire fraud, and bank fraud.

Renard’s role in the conspiracy primarily consisted of providing advice, guidance, and encouragement via interstate prison phone calls and by way of U.S. Mail to his co-conspirators, including Bradford. Bradford would obtain genuine state identification documents in the names of real individuals, and she and a co-conspirator would open bank accounts in those names. The balances of the fraudulently opened bank accounts would be inflated by depositing checks from other fraudulently opened bank accounts. Then funds would be withdrawn, often by way of ATMs, though there were insufficient funds to cover the withdrawals. Often, insufficient funds checks would be passed in order to obtain merchandise.

A co-conspirator would produce fake payroll checks drawn on some of the fraudulently opened accounts and would cash them at various locations. Funds obtained during the scheme were used for a variety of purposes, including paying living expenses, paying costs associated with perpetrating the scheme, purchasing merchandise, and for funding Renard’s prison trust account. As detailed in the factual stipulations, during several transactions, to include the acquisition of food stamp benefits in a victim’s name, Renard was on the jail phone with Bradford, providing her encouragement and guidance.

Renard has been in federal custody since his arraignment on December of 2010. Bradford is currently serving a 132 month federal sentence and was ordered to pay restitution in the amount of $122,943.72 as a result of her role in the scheme – Source.

Audacious Attorney Abuses Authority

Amanda Miller — Tue, 06 Dec 2011 20:06:34 +0000

From How to Get Out of Debt

A Geogira attorney, Gary Wisenbaker, plead guilty to a wire fraud charge in relation to defrauding his own clients.

According to evidence presented at the guilty plea hearing, Wisenbaker stole money from his clients by settling civil cases without his clients’ knowledge, and then pocketing the settlement payments.

Wisenbaker then used these monies to pay off personal expenses, including payments for a mortgage, credit cards, car loans and school tuition.

To cover up his fraud, Wisenbaker falsely told his clients that their cases were still pending, when in reality Wisenbaker had settled the cases months or even years earlier. In total, Wisenbaker defrauded his clients out of more than $50,000.

United States Attorney Edward Tarver said, “As an attorney, this defendant abused his authority to act on behalf of his clients and betrayed the trust that they placed in him. This office will continue to investigate and prosecute individuals who use positions of trust to steal from others. The U.S. Attorney’s Office is committed to combating financial crimes.”

Wisenbaker faces a maximum statutory penalty of twenty years imprisonment; a fine of $250,000; and three years of supervised release. Wisenbaker remains free on bond pending sentence. A sentencing date will be scheduled following completion of a presentence investigation and report – Source.

On The Twelfth Count Of Mail Fraud My Scammer Gave To Me…

Amanda Miller — Tue, 06 Dec 2011 17:44:58 +0000

From How to Get Out of Debt

In November, Steven Folan, of Florida, pleaded guilty to a thirteen count indictment charging him with one count of conspiracy to commit mail fraud and wire fraud and twelve counts of mail fraud. The indictment alleged that Folan and others were involved in a telemarketing scam, operating in Florida, that bilked over 22,000 victims of $30 million.

The indictment alleged that the scam victimized consumers in all fifty states, the District of Columbia and Puerto Rico, all ten Canadian provinces and the Northwest Territory of Canada. There were at least 54 victims in twenty eight (28) of the thirty eight (38) counties comprising the Southern District of Illinois.

The criminal indictment alleged that Folan was a manager of Universal Marketing Solutions, and later Creative Vacation Solutions. The indictment alleged that the scheme began October of 2007, and continued through at least January of 2010. Telemarketers for Universal Marketing Solutions and Creative Vacation Solutions placed cold calls to timeshare owners and then falsely represented that their company had actual buyers for the owners’ timeshare property.

Telemarketers they supervised then solicited advanced fees of up to several thousand dollars from each victim in purported closing costs that they promised would be refunded to the owner once the closing on the property occurred. Many timeshare owners were told that their closings were scheduled within the next sixty to ninety days. Despite collecting fees from 22,000 victims, these companies were not successful in selling a single timeshare unit, the indictment alleged. Defendants and their co-conspirators, the indictment alleged, simply pocketed the closing costs.

Two other men were indicted with Folan and their trial is currently scheduled to begin on December 12, 2011, in East St. Louis. Note that an indictment is simply a charge against a defendant. Each defendant is presumed to be innocent and is entitled to a fair trial on the charge at which the government must prove the defendant’s guilt beyond a reasonable doubt.

Folan faces a penalty of up to 25 years imprisonment, a fine of up to $250,000, and a term of supervised release of up to five years at his sentencing, currently set for March 9, 2012 – Source.

Krahl Construction Executives And Employees Indicted In Alleged Fraud And Kickback Scheme

Amanda Miller — Thu, 01 Dec 2011 17:06:08 +0000

From How to Get Out of Debt

Construction company executives and employees, along with others, have been indicted in an alleged billing fraud and kickback scheme.

Krahl Construction’s Principal owner and six of it’s top executives and employees along with two former employees of client companies were indicted for allegedly engaging in a fraudulent billing and kickback scheme. The defendants affiliated (seven in total) with Krahl Construction allegedly caused losses of $9 million and $400,000 respectively to the tow client companies, while former employees of those firms allegedly received kickbacks valued at $645,000 and $119,5000, respectively.

In total, nine defendants were charges in total with a 16-count indictment in Illinois. Krahl Construction, which specialized in interior construction, closed its Chicago office at 322 S. Green St., in January 2010 after FBI agents executed a federal search warrant. The company also had an office in Denver.

The indictment alleges that between 2005 and 2009, certain defendants fraudulently inflated the cost of renovation projects performed by Krahl and caused the creation of false documents to support the inflated costs, resulting in over-billing at least $15 million to Company A, which suffered actual losses of at least $9 million, and losses of approximately $400,000 to Company B.

At the same time, the two clients’ employees secretly used their positions to solicit and accept bribe/kickback payments and home improvements in exchange for favorable action to help Krahl obtain contracts with those companies, the indictment charges.

Company A is identified as a San Francisco-based real estate investment trust that hired Krahl to renovate portions of an eight-story building located at 350 E. Cermak, Chicago. Company B is identified as a property management firm located on Michigan Avenue, Chicago, that hired Krahl to develop commercial property in Bolingbrook known as the Tallgrass project.

Defendant John Paderta, the president of Krahl who owned approximately 85 percent of the company, was charged with one count of mail fraud.

Also indicted were:

Thaddeus Stepniewski, Krahl’s chief financial officer, who was charged with 15 counts of mail and wire fraud;
Doug Harner, Krahl’s executive vice president and part owner, who was also charged with 15 counts of mail and wire fraud;
Scott Mousel, a Krahl project manager for two portions of the Cermak project, who was charged with five counts of mail fraud;
John Bak,a Krahl project manager on portions of the Cermak project, who was charged with one count of mail fraud;
Heather Ellis, a Krahl project manager assistant on portions of the Cermak project, who was charged with one count of mail fraud;
Erin Scott, also a Krahl project manager assistant on the Cermak project, who was charged with four counts of mail fraud;
Scott Solano, property manager for the Cermak building, first as an employee of Company C, which managed the building for Company A, and then, beginning in April 2009, as an employee of Company A, who was charged with one count of mail fraud; and
Timothy Scannell, vice president of Company B, who managed a three-story office building and warehouse in Bolingbrook, known as the Tallgrass building, which Krahl was hired to remodel, and who was charged with one count of mail fraud.

The indictment also seeks forfeiture from Paderta, Stepniewski and Harner of at least $9 million. Separately, it seeks forfeiture of approximately $645,000 from Solano, and approximately $119,500 from Scannell, representing the value of the bribes/kickbacks they each allegedly received.

The indictment alleges that certain defendants engaged in aspects of the scheme as follows:

budgets: during the budgeting phase of the Cermak projects, Paderta, Stepniewski, Harner, Mousel, Bak and Solano fraudulently identified and included fictitious costs to be added to the project budgets to generate additional profits for Krahl;
spreadsheets: Paderta, Stepniewski, Mousel, Bak, Ellis and others created financial spreadsheets to keep track of the fraud, identifying the actual amounts owed to subcontractors along with the inflated amounts that were billed by Krahl. Stepniewski reviewed those spreadsheets on a regular basis, and he and others manually input the inflated amounts into the accounting records;
sham companies: Paderta instructed Stepniewski to set up sham companies that could be used to fraudulently obtain payment from customers, and Stepniewski arranged for those companies to be incorporated, knowing that they would be shell corporations used for fraudulent billing purposes;
creation of false documents: Paderta, Stepniewski, Harner, Mousel, Bak, Ellis, Scott and others created documents containing false information to support the inflated prices being charged by Krahl. Those documents included fraudulent invoices, change orders, lien waivers, applications and certifications for payment, and numerous documents from the sham companies. Certain documents were created by cutting and pasting information and signatures. Some documents contained forged signatures and falsely notarized signatures. Krahl maintained two sets of files; one containing legitimate documents, and the other containing false and fraudulent documents;
inflated amounts: Paderta decided on the inflated amounts that should be added to certain invoices, and he gave Mousel, Bak and others that information. Mousel and Bak created inflated invoices or made handwritten changes on documents to inflate the charges and gave those documents to Stepniewski Ellis and Scott, who then created new documents using the inflated numbers. On some occasions, Harner told Mousel and Bak to inflate certain costs for Company A projects;
inflated bids: Paderta, Stepniewski, Harner, Mousel, Bak, Ellis, Scott and others inflated bids to support the overstated invoices that were submitted for payment. They also inflated bids in order to make it appear that certain sham companies had submitted lower bids, which justified awarding the work to the sham companies. Paderta gave Bak inflated amounts to include in certain bid proposals, which Bak did;
false documents to Company A: Paderta, Stepniewski, Harner, Mousel, Bak, Ellis, Scott, Solano and others caused false and fraudulent invoices to be submitted to Company A, as well as other false documents, resulting in over-billing of at least approximately $15 million. Paderta, Stepniewski and Harner received substantial salary and bonus payments as a result of the overstated charges paid by Company A to Krahl;
Company A’s request: in December 2009, in response to Company A’s request for documents pertaining to the Cermak projects, Paderta, Stepniewski, Mousel and Ellis provided to Company A copies of numerous false and fraudulent documents, which had previously been submitted to Company A, showing inflated and fictitious costs, knowing that they were false and fraudulent; and
Company B: Paderta, Stepniewski, Harner and others submitted false and fraudulent documents to Company B, including invoices, payment applications, and lien waivers, falsely representing that at least three of the sham companies — Harvey Glass, Everygreene Electric, and Great Lakes Illinois Supply — had provided services and materials. In fact, Paderta, Stepniewski and Harner knew that those sham companies had not provided such services or materials.

Regarding bribes and kickbacks, the indictment alleges that Solano solicited and accepted kickbacks from Krahl, including payments totaling approximately $520,000 and renovations on Solano’s home totaling approximately $125,000. The renovations included work on the basement, general repairs, new windows, and installation of a generator and new televisions. In exchange for the kickbacks, Solano promised to, and did, take favorable action on behalf of Krahl as requested and as opportunities arose, including helping Krahl obtain contracts from Company A, while Solano was employed at Company A and elsewhere.

Scannell allegedly solicited and accepted kickbacks from Krahl, including payments totaling approximately $100,000, as well as renovations on his home totaling approximately $19,500. In exchange for the kickbacks, Scannell promised to take favorable action on behalf of Krahl as requested and as opportunities arose, including agreeing to help Krahl obtain contracts from Company B, while Scannell was employed at Company B.

Each count of mail and wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater – Source.

Mid-2000s Multimillion Dollar Fraudster Finally Gets Sentenced

Amanda Miller — Wed, 30 Nov 2011 14:30:52 +0000

From How to Get Out of Debt

In the mid-2000s Clarence Allen Rice, owner of C & J Leasing Corporation, ran a complex, multimillion dollar wire fraud scheme to which he was just sentenced to a term of 70 months in prison for earlier this month.

Trial and sentencing evidence showed that Rice suffered over $800,000 in day trading losses in the early 2000s using his company’s money. As a result, his company faced severe cash flow problems by early 2003. Rice addressed the cash flow problems by embezzling millions of dollars from a business partner, Frontier Leasing Corporation, between 2003 and 2006. He used Frontier’s money to pay his business debts and engage in additional day trading and concealed the fraud through false statements to Frontier and the manipulation of his company’s books.

Rice’s fraud allowed C & J Leasing Corp. to appear profitable between 2003 and 2006, but ultimately forced millions of dollars in losses onto Frontier. The scheme essentially drove Frontier out of business and forced approximately 20 Frontier employees to lose their jobs.

Rice also caused substantial losses to customers of his leasing company. These customers, or “lessees,” collectively gave Rice millions of dollars in security deposits in the early to mid-2000s. However, due to his financial problems, Rice used these security deposits to fund his business and therefore had no ability to refund the security deposits to customers at the conclusion of each lease.

The customers ended up losing the money. “The victims in this case trusted Mr. Rice with their money,” said U.S. Attorney Klinefeldt. “He violated that trust in an egregious way and caused millions of dollars of harm. Even worse, his actions forced approximately 20 people to lose their jobs at a time when the economy was already struggling. The sentence appropriately reflects the harm he caused.”

Klinefeldt said Rice’s fraud has implications beyond just the victims in the case. “Small businesses in Iowa have a well deserved reputation for dealing with people fairly and honestly. Mr. Rice’s fraud threatens that reputation. We will to do everything in our power to prosecute wrongdoers like him and restore the confidence people traditionally have had in the honesty and integrity of small businesses in this State. Honest small business owners deserve nothing less” – Source.

Former Owner And President Of Allied Health Care Sentenced For $135 Million Phony Lease Scheme

Amanda Miller — Wed, 30 Nov 2011 12:23:20 +0000

From How to Get Out of Debt

Former owner and president of Allied Heath Care Services, Charles Schwartz, was sentenced last week to 195 months in prison (16.25 years) for organizing and executing a $135 million phony lease scheme that losses of more than $80 million and victimized over 50 financial institutions.

In April Schwartz pleaded guilty to one count of mail fraud but has been in federal custody since September of 2010.

From at least 2002 through July 2010, Schwartz, through Allied Health Care Services, Inc. (“Allied”), convinced financial institutions to pay more than $135 million by telling them that the money would be used to lease valuable medical equipment. In reality, the purported medical equipment supplier did not provide Schwartz and Allied with any equipment during that time. Instead, the “supplier” created phony invoices which appeared to reflect legitimate transactions.

As part of the scheme, Schwartz approached various financial institutions and informed them that Allied needed to lease particular medical equipment. Using the phony invoices from the “supplier,” Schwartz convinced the financial institutions to enter into leasing arrangements. Pursuant to these arrangements, the financial institutions purchased the medical equipment – which they immediately leased to Schwartz and Allied – and sent payment for the medical equipment to the purported supplier. The “supplier” then sent the money received from the financial institutions (minus his 3 to 5 percent payment) to an entity created by Schwartz to facilitate the fraud.

In addition to spending millions of dollars on properties in New Jersey and New York, including a horse farm, Schwartz used the money in Ponzi-scheme fashion to repay earlier bank loans that were a part of the scheme. By August 2010, several financial institutions from which Schwartz had obtained loans filed lawsuits against Schwartz and Allied, claiming he owed them at least $20 million. Allied and Schwartz were forced into involuntary bankruptcy in August 2010 and September 2010, respectively. Losses from the scheme now total at least $80 million. Schwartz admitted that more than 50 victim financial institutions lost a total of between $50 and $100 million as a result of the scheme.

Schwartz and the medical equipment “supplier” undertook efforts throughout the scheme to deceive bank examiners who wanted to inspect the non-existent medical equipment, which had been purchased by the financial institutions.

Schwartz admitted that in advance of expected inspections by financial institutions, he directed others to alter serial numbers or create fraudulent serial numbers on existing ventilators to match fraudulent invoices he had supplied to the various financial institutions. At times, when financial institutions sought to review documentation regarding Allied’s leasing of the ventilators to its customers, Schwartz falsely told the financial institutions that the information was protected by Health Insurance Portability and Accountability Act regulations. At one point during an August 2010 conversation between Schwartz and the “supplier,” Schwartz commented that the financial institutions had fallen “hook, line and sinker” for the false explanation given to bank examiners who asked why the purported supplier used his home address on certain invoices.

In conjunction with his jail time Schwartz also faces three years of supervised release and owes $80 million in restitution – Source.

Home Start America CEO And Founder Sentenced To 50 Months In Prison For Role In $1.5 Million Fraud Conspiracy

Amanda Miller — Tue, 29 Nov 2011 21:28:23 +0000

From How to Get Out of Debt

CEO and founder of alleged real estate investment firm Home Start America (HSA), Michael Kaufman, was sentenced to 50 months in prison last week for his role in a long-running, large scale wire fraud conspiracy with loan officer David Wynn.

According to documents filed and statements made in court:

Kaufman founded HSA in Bloomfield, New Jersey, and at one time employed more than 30 people. Kaufman, through HSA, purchased and sold residential real estate properties. As part of the scheme, Kaufman and others recruited people – often first-time home buyers – to purchase properties quickly, with promises of no money down, no closing costs, and repairs paid for by HSA. Kaufman would then steer the purchasers to loan officers, including the aforementioned David Wynn.

Many of the properties sold by HSA had actually been bought by HSA shortly before, and then “flipped” to the unsuspecting buyers for far more than HSA paid. Kaufman, Wynn, and others falsely inflated the buyers’ income and assets on loan documents to make it appear that the buyers could afford the properties HSA was selling, when the purchasers did not have the means to buy the properties.

Victim financial institutions – relying on the false figures in the loan documents – then issued the mortgage loans, unaware of the purchasers’ true financial conditions. HSA and Kaufman received illicit profits when the transactions closed, and Wynn and other loan officers received commissions for their fraudulent work. After the closings, the buyers could not make the payments on the properties, and nearly always lost the properties to foreclosure.

The fraud, which began as early as 2002 and lasted through June 2005, caused over $1.5 million in loss to the banks, and earned hundreds of thousands of dollars in profits for Kaufman and HSA.

Kaufman pleaded guilty in April to a Superseding Indictment which charged him with conspiracy to commit wire fraud. He was sentenced to just over 4 years in prison followed by 3 years of supervised release and ordered to pay $1,336,399 in restitution.

Wynn was sentenced in October to a year and a day in prison for his role in the conspiracy and ordered to pay $171,000 in restitution – Source.

Fraudulent Treasury Strips Investment Program Results In $4 Million Investor Lost

Amanda Miller — Thu, 17 Nov 2011 12:00:01 +0000

From How to Get Out of Debt

It was announced this week that Tyrone Gilliams, Jr., was indicted on charges of securities and wire fraud for operating a fraudulent United States Treasury Strips investment program. Treasury Strips are securities derived from United States Treasury Bonds.

Gilliams is the owner of TL Gilliams, LLC. In the summer of 2010, Gilliams personally solicited $4 million dollars from an investor for purposes of trading in United States Treasury Strips. Upon receiving the money from the investor, Gilliams misappropriated almost all of it.

A substantial portion of the investor’s money was used by Gilliams to fund a black-tie gala called the “Joy to the World” festival, which was held at the Ritz-Carlton hotel in Philadelphia on December 18, 2010. Gilliams spent more than $1 million on that event and on promoting the “Gatta Be Jokin Comedy Jam” in the Bahamas in December 2010. He used another $450,000 of the $4 million to refund a deposit from a prior investor. Gilliams also misappropriated approximately $1.6 million for what he claimed was a gold investment in Ghana.

The Indictment charges Gilliams with one count of securities fraud and one count of wire fraud. Each count carries a maximum potential penalty of 20 years in prison. He also faces a maximum fine of $5 million or twice the gross gain or loss from the offense on the securities fraud count, and of $250,000 or twice the gross gain or gross loss from the offense on the wire fraud count.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty – Source.

You Are Cordially Invited To The FTC’s Road Ahead Roundtable

Amanda Miller — Thu, 17 Nov 2011 07:00:34 +0000

From How to Get Out of Debt

Today, the Federal Trade Commission will host the third in a series of roundtables around the country to gather information on consumers’ experiences in the leasing of motor vehicles at dealerships.

The roundtable also will address what has been learned about auto sales, financing and leasing at all of the roundtables; what consumer and business education initiatives would be useful; and any practices that may harm consumers significantly or that are widespread.

The event will be held today, November 17, 2011, in the FTC’s Conference Center, 601 New Jersey Avenue, N.W., Washington, D.C.

More information, including the roundtable agenda, is available here.

WHO: Free and open to the public
WHEN: Thursday, November 17, 2011, 8:30 a.m. – 4:30 p.m. EST Registration starts at 7:30 a.m.
WHERE: FTC’s Conference Center 601 New Jersey Avenue, N.W. Washington, DC
WEBCAST: The event will be webcast live.
TWITTER: @FTC will live-tweet the workshop. Follow the conversation using #FTCbcp

This roundtable will gather information on consumers’ experiences in the leasing of motor vehicles at dealerships. The roundtable will also address what has been learned about auto sales, financing and leasing at all of the roundtables; what consumer and business education initiatives would be useful; and any practices that may harm consumers significantly or that are widespread.

Buying or leasing a car is among the most expensive transactions that many consumers make. Financing obtained at a dealership may provide benefits for many consumers, such as convenience, special manufacturer-sponsored programs, access to a variety of banks and financial entities, or access to credit otherwise unavailable to a buyer. Dealer-arranged financing, however, can be a complicated, opaque process and could potentially involve unfair or deceptive practices.

The FTC’s first roundtable, on consumer protection issues involving dealership sales and financing of cars, SUVs, and light trucks, was held in Detroit in April. The second roundtable, on military consumers’ experiences in buying and financing motor vehicles, the role of financial literacy in consumers’ understanding of that process, and fair lending issues, was held in San Antonio in August – Source.

Scam Recovery Kits Business Continues To Scam Buy Selling Scam Recovery Kits

Amanda Miller — Wed, 09 Nov 2011 21:22:22 +0000

From How to Get Out of Debt

(Try saying that title ten times fast)

In March of this year the Federal Trade Commission (FTC) stepped up it’s efforts against scams that targeted financially strapped consumers with more than 90 actions brought by the commission and its law enforcement partners in a investigation called “Operation Empty Promises.”

Within this investigation the FTC looked into Brian Hessler and Business Recovery Services’ do-it-yourself kits to help consumers recover money lost to business opportunities and work-at-home operations. The kits were claimed to be tailored to particular schemes and cost up to $499. The FTC alleged that they violated the Telemarketing Sales Rule (TSR) by misrepresenting the nature and effectiveness of their services, and accepting advance payments from consumers for recovering money lost in previous telemarketing transactions without waiting seven business days for the consumers to receive the recovered money, as required by the Rule. According to other documents filed in court, consumers lost an estimated total of $1.5 million in this scheme – Source.

In March the Department of Justice (DOJ) requested that the court issue a preliminary order to stop the defendants from taking advance fees from consumers for the duration of the case and the injunction was filed in April.

It was announced today that a federal judge has found Hessler and the company in contempt for violating the court order barring them from charging consumers in advance for a service that purportedly would help consumers recover money they lost in previous telemarketing scams.

The contempt order requires the defendants to make refunds to some consumers and gives them 30 days to show that their business practices comply with the court’s preliminary injunction. The court will assess a $1,000 per day fine for every day they fail to certify compliance. For every violation of the injunction that the FTC can prove after the contempt order, the court will assess a $1,000 fine and order refunds to customers – Source.

Original Complaint

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FTC Settles Charges Against Children’s Social Media Network After Collecting Personal Information Without Parental Consent

Amanda Miller — Tue, 08 Nov 2011 18:58:45 +0000

From How to Get Out of Debt

The operator of SkidEKids.com has settled charges from the Federal Trade Commission (FTC) after collecting children’s information without parental consent.

The website, SkidEKids.com, has been marketed and advertised as a website similar to Facebook or Myspace but for children, providing for them a safe and educational place on the internet. According to the FTC, Skid-e-kids is a social networking site targeted at children ages 7-14 that allows them to register, create and update profile information, create public posts, upload pictures and videos, and “friend” and send messages to other Skid-e-kids members.

Apparently the website collected personal information from around 5,600 children without acquiring proper and prior parental consent which violated the Commission’s Children’s Online Privacy Protection Act (“COPPA”) Rule. The FTC’s complaint also charges the operator, Jones O. Godwin, with making deceptive claims in Skid-e-kids’ privacy policy about the site’s information collection practices. The proposed settlement will bar future violations of COPPA and misrepresentations about the collection, use and disclosure of children’s information.

The FTC’s COPPA Rule requires that website operators notify parents and obtain their consent before they collect, use or disclose personal information from children under 13. The Rule also requires that website operators post a privacy policy that is clear, understandable and complete.

The FTC alleges that the Skid-e-kids’ online privacy policy claimed that the site “requires child users to provide a parent’s valid email address in order to register on the website. We use this information to send the parent a message that can be used to activate the Skid-e-kids account, to notify the parent about our privacy practices, to send the parent communications either about the parent’s and child’s Skid-e-kids accounts or about features of our Web site…”

The complaint alleges that the defendant registered children on the website without collecting a parent’s email address or obtaining permission for their children to participate. Children who registered were able to provide personal information, including their date of birth, email address, first and last name, and city. In addition to violating the COPPA Rule by collecting kids’ personal information without parental permission, the FTC alleged that the Skid-e-kids’ false privacy policy claims violated the FTC Act.

In addition to barring future violations of COPPA and misrepresentations about the collection and use of children’s information, the settlement order also requires Godwin to destroy information he collected from children in violation of the Rule, and, for a period of time, link to online educational material and retain an online privacy professional or join a Commission-approved safe harbor program to oversee any COPPA-covered website he may run. Finally, the proposed order imposes a $100,000 civil penalty, all but $1,000 of which will be suspended if Godwin provided truthful information about his financial condition and complies with the order’s oversight provision – Source.

While this is a novel idea for children I can’t help but have reservations about any website social media network targeted towards children. The risk we potentially put children’s information in with these types of sites scares me. Not only does this type of site raise a red flag for information getting into criminal hands but also the hands of scammers that may use children’s information to take out credit. Mid-October I wrote of a warning put out by the Better Business Bureau (BBB) that told parents to take notice to their children’s credit reports well before the age of the child being able to use credit to make sure their identity hasn’t been stolen as it is an increasing crime and scam in the United States.

I am in no way shape or form saying that SkidEKids.com would do this sort of action but rather putting out a warning to parents to be wary of the sites your children are using on the internet and to always make sure you kids’ information is safe and secure.

What are your thoughts on the matter? Leave a comment below!

First Ever Central Florida Law Firm To Be Forced To Resign From BBB

Amanda Miller — Mon, 07 Nov 2011 17:00:49 +0000

From How to Get Out of Debt

KEL law firm, formally Kaufman, Englett & Lynd, has been forced to resign from the Better Business Bureau (BBB) of Central Florida. The resignation of this Orlando based law firm marks “the first area law firm to be ousted in the business-rating agency’s 27-year history.”

Apparently the BBB has complained that over the past year KEL has failed to resolve complaints that arose which resulted in them receiving a rare “F rating” for a law firm.

In the past three years KEL has resolved all but three of the 39 filed complaints but the BBB felt their slow pace of tackling 27 in the last 12 months alone was enough to remove accreditation.

While KEL has denied allegations of dropping the ball BBB consumer complaints say that many paid thousands of dollars in fees for foreclosure-defense and mortgage-modification services that were never provided or poorly executed. A KEL representative said last week that “the firm worked diligently to address the complaints, which constituted only a tiny fraction of the firm’s 15,000 cases during the past three years” and that KEL had indeed resigned from the BBB’s accredited membership program but purely out of protest.

The Johnson Law Group of Orlando is the only other local law firm that has received more complaints than KEL during the three year time period with 45 complaints and accompanies them on the F rating list. However, The Johnson Law Group is not a member of the BBB.

Escorts.com To Pay $6.4 Million With Money Laundering Charges

Amanda Miller — Fri, 04 Nov 2011 15:00:35 +0000

From How to Get Out of Debt

It was announced yesterday that the filing of a criminal information against corporations, R.S. Duffy and National A-1 Advertising, was issued charging them with money laundering and criminal forfeiture allegations including a plea agreement calling for the forfeiture of $4.9 million and a $1.5 million fine.

According to the Information filed it’s alleged that the corporate defendants operated an Internet enterprise called Escorts.com which facilitated interstate prostitution activities.

The defendants allegedly developed and operated an Internet web site, using the domain name Escorts.com, and created an on-line network for prostitutes, escort services, and others to advertise their illegal activities to consumers and users of those services.

The Information alleges that the defendants received subscription fees and payments in the form of money orders, checks, and credit card credits, and wire transfers from users of Escorts.com from across the nation. The funds the defendants allegedly received were the proceeds of violations of federal laws prohibiting interstate travel in aid of racketeering enterprises, specifically prostitution, and aiding and abetting such travel.

The money laundering conspiracy charge alleges that the defendants agreed to engage in monetary transactions in property of a value greater than $10,000 derived from those unlawful activities.

In addition, the Information alleges that in connection with the operation of Escorts.com, the defendants created and maintained a network of Internet customer service accounts which facilitated and caused the transfer and movement of the proceeds of these unlawful activities from locations throughout the United States, to the defendants’ business operations and to the defendants’ accounts at financial institutions, investment funds, and financial services providers.

Pursuant to a plea agreement also filed with he U.S. District Court in Williamsport, National A-1 Advertising and R.S Duffy agreed to enter guilty pleas to the money laundering conspiracy charge alleged in the Information, to serve a probation term of 18 months, and to pay a $1,500,000 fine.

In addition, under the terms of the plea agreement, the defendants have agreed to the criminal forfeiture of $4.9 million in cash derived from the unlawful activity, as well as forfeiture of the domain name, Escorts.com, all of which represent property used to facilitate the commission of the offenses – Source.

The website has since been taken down but thanks to an internet archiving site I was able to obtain a screen shot, seen below, of the website in question from February 2010.

New Jersey Fraudster Faces A Possible 1,100 Year Sentence

Amanda Miller — Tue, 01 Nov 2011 12:00:15 +0000

From How to Get Out of Debt

After running an investment fraud scheme and causing at least $200 million in losses, Eliyahu Weinstein was indicted last week with 45 charges. Weinstein has been charged one one count of conspiracy to commit wire fraud, 29 counts of wire fraud, two counts of wire fraud while on pretrial release, one count of bank fraud and 12 counts of money laundering.

“According to the Indictment, Weinstein’s exploitation of investors’ trust was so shameless he used doctored documents for properties he didn’t own – including in a town that doesn’t exist – and continued to commit crimes while out on bail,” said U.S. Attorney Paul Fishman. “With promises of sound investments and charitable donations, he allegedly stole $200 million, spending freely on fancy cars, jewelry and gambling trips. And in using victims’ money to collect Judaica, Weinstein robbed from his own community’s present to stockpile artifacts of its past.”

From at least as early as June 2004 through August 2011, Weinstein, with the help of others, orchestrated a real estate investment fraud scheme out of Lakewood, New Jersey that has resulted in losses to victim investors of at least $200 million.

To induce victims to invest, Weinstein and others made various types of materially false and misleading statements and omissions. For example, Weinstein and others represented to victims that Weinstein’s inside access to certain real estate opportunities allowed him to buy particular properties at below-market prices. Weinstein and others also told victims that their money would be used to purchase a specific property, and the property would be quickly resold – or “flipped” – to a third-party purchaser lined up by Weinstein. Victims were also told that their money would be held in escrow until the closing of a purported real estate transaction.

Weinstein bolstered his lies by creating, and causing to be created, various types of fraudulent documents, including “show checks,” which Weinstein led victims to believe represented Weinstein’s investments in specific transactions but were never deposited; forged checks, which had actually been negotiated for small amounts, but Weinstein altered to appear worth millions of dollars; operating agreements, which showed that victims had ownership interests in specific properties they did not; and various kinds of forged legal documents, including leases, mortgages, and deeds.

Weinstein initially targeted victims from the Orthodox Jewish community, of which he was a member, exploiting his standing in and knowledge of the customs and practices of the community to further the scheme. Weinstein abused the community’s practice of engaging in transactions based on trust and without paperwork to obtain money from his victims without substantial written records. Weinstein would then falsely represent that specific real estate transactions existed, that the victims’ monies were used to fund those transactions, or that the victims’ profits from those transactions were being “rolled” into new investments.

By 2010, Weinstein had tarnished his reputation in the community due to the massive losses caused by the scheme. In April 2010, Weinstein and others began soliciting victims from outside of the Orthodox Jewish community, whom they defrauded out of millions of dollars.

Weinstein then took significant portions of his victims’ money, which had been provided for specific real estate transactions, and used it for other purposes he did not disclose to victims. These included funding unrelated real estate transactions in which Weinstein was engaged; paying prior victims; and making charitable and religious contributions which he used to elevate his reputation within the Orthodox Jewish community.

Weinstein also used millions of dollars fraudulently obtained from his victims to fund his own lavish spending, including millions of dollars worth of antique Judaica and other artwork; a multimillion-dollar collection of jewelry and watches; gambling in Las Vegas and elsewhere; and his personal expenses, including millions of dollars in credit card bills, millions of dollars in legal bills, and luxury car lease payments.

If convicted of the wire fraud charges, Weinstein faces a maximum potential penalty of 20 years in prison and a $250,000 fine per count. If convicted on the wire fraud while on pretrial release charges, Weinstein faces a maximum potential penalty of 30 years in prison per count. Weinstein also faces a maximum potential penalty of 20 years in prison and a $250,000 fine on the wire fraud conspiracy charge; 30 years in prison and a $1 million fine on the bank fraud charge; and a maximum potential penalty of 10 years in prison and a $250,000 fine on each of the money laundering charges – Source.

Nine More Charged In Fraud Of Holocaust Survivor Programs

Amanda Miller — Mon, 17 Oct 2011 17:43:17 +0000

From How to Get Out of Debt

Charges have been announced against nine more participants in a scheme that defrauded programs that were established to aid survivors Holocaust survivors of of Nazi persecution out of over $57 million.

Thus far, 30 have been charged in connection with this scheme and the nine newly announced fraudsters include: Henry Gordin, Genrikh Kolontryrskiy, Viktor Levin, Ella Voskresenskiy, Zlata Blavatnik, Pytor Blavatnik, Yevgeniya Abramovich, Asya Galindo, and Lana Kagan.

New arrests include five additional former employees of the Conference on Jewish Material Claims Against Germany (the “Claims Conference”), which administered the programs. The Conference is a not-for-profit organization that provides assistance to those who fell victim of Nazi persecution during the Holocaust and administers funds from the German government, including “the Hardship Fund” and “the Article 2 Fund.” In order for someone to receive these funds they need to apply through the Claims Conference and employees of the Manhattan office process and confirm applicants that meet the specific criteria required for payments.

In exchange for kickbacks, those insiders arrested, who were supposed to process and approve only legitimate applications, are alleged to have knowingly approved nearly 5,000 fraudulent applications, resulting in payouts to applicants who did not qualify for the programs.

The Hardship Fund pays a one-time payment of approximately $3,500 to victims of Nazi persecution who evacuated the cities in which they lived and were forced to become refugees. Members of the conspiracy submitted fraudulent applications for people who were not eligible. Many of the recipients of fraudulent funds were born after World War II, and at least one person was not even Jewish. Some conspirators recruited other individuals to provide identification documents, such as passports and birth certificates, which were then fraudulently altered and submitted to corrupt insiders at the Claims Conference, who then processed those applications. When the applicants received their compensation checks, they kept a portion of the money and passed the rest back up the chain.

The Article 2 Fund makes monthly payments of approximately $400 to survivors of Nazi persecution who make less than $16,000 per year, and either (1) lived in hiding or under a false identity for at least 18 months; (2) lived in a Jewish ghetto for 18 months; or (3) were incarcerated for six months in a concentration camp or a forced labor camp. The fraud involved doctored identification documents in which the applicant’s date and place of birth had been changed. The fraud also involved more sophisticated deception, including altering documents that the Claims Conference obtains from outside sources to verify a person’s persecution by the Nazis. Some of the detailed descriptions of persecution in the fraudulent Article 2 Fund applications were completely fabricated.

Both funds were defrauded for over a decade by employees. To date it appears that at least 3,839 Hardship Fund applications were fraudulent, equating to a loss of around $12.3 million and around 1,112 fraudulent applications for the Article 2 Fund, equating to a loss of around $45 million.

$4.2 Million For Free Internet Download Software?

Amanda Miller — Sun, 09 Oct 2011 15:00:31 +0000

From How to Get Out of Debt

After a conviction last November following a seven-week trial David Moro was sentenced on October 5, 2011 to 10 and a half years (126 months) in prison for orchestrating and carrying out a $4.2 million broadcasting equipment lease and financing scheme which yielded a loss of more than $3 million to lenders.

Moro was convicted of one count of conspiracy to commit mail and wire fraud; six counts of mail fraud; five counts of wire fraud; three counts of bank fraud; 17 counts of money laundering; and one count of making false statements in a matter within the jurisdiction of the FBI and IRS. Those were 33 counts of his 34 count Indictment. He was not convicted on a second count of making false statements.

Moro is the former Chief Excecutive Officer of Inchon, a New Jersey based business that ran the Russian Radio Network. The network was a broadcasting company that marketed to Russian speakers. Between 2003 and 2005 contacted lenders, directly and through brokers, and informed them that he needed to purchase high-end broadcasting equipment as part of lease-financing agreements which totaled more than $4.2 million.

Moro advised lenders that Inchon needed the broadcasting equipment in order to upgrade and expand its ethnic radio programming. As proof of his need for financing, Moro presented the lenders and brokers with fraudulent equipment invoices reflecting that Smart Function LLC, based in Parsippany, N.J., as well as other purported vendors, had provided Inchon with new high-end Digital Audio Servers, when in fact, Smart Function was acting as a front for Inchon, and was sending the vast majority of the money back to Inchon and Moro after receiving it from the lenders.

Although Moro convinced the lenders the servers contained state-of-the-art software valued at more than $10,000 for each server, in reality the servers contained nothing other than software available for download free-of-charge from the Internet.

Letters and fraudulent equipment invoices were sent to investors informing them that the Digital Audio Servers had been provided. Obviously no such servers even existed. One lender arranged for an inspection of the new servers before funding the lease and Moro had a co-conspirator put new serial numbers on the old servers so that the inspector would think they were brand new.

Moro also submitted phony financial documents to the lenders to convince them that Inchon was a highly profitable company, when in reality it was relying largely on the proceeds of the fraud to continue its operations. Moro had false tax returns prepared for Inchon and for an individual he portrayed as the 100 percent owner of Inchon. In reality, these tax returns were never filed with the IRS, and reflected income and profits for the business and the purported owner that neither ever received.

In Ponzi-scheme fashion, Moro used funds received from the financial institutions through the fraud to make payments on earlier leases. After all of the lease financing agreements were executed and funded by the lenders, Inchon was due to pay more than $100,000 per month. Moro ceased making the required lease payments on behalf of Inchon, resulting in a loss to the lenders in excess of $3 million.

The lenders affected by this scheme are located across the company and include: CFC Investment, Hewlett Packard Financial Services, Santa Barbara Bank and Trust, Wells Fargo Equipment Finance, Citi Capital, the CIT Group, American Express Business Finance Corporation, ACC Capital Corporation, Diamond Lease, Cathay Bank and Bank of the West.

The money laundering charges stem from the movement of funds from Smart Function and other entities to Inchon. Moro used the laundered funds to pay unrelated business expenses and personal expenses, including travel and gifts to family members.

In addition to the prison term, Judge Walls sentenced Moro to five years of supervised release and ordered him to pay restitution in the amount of $3,589,350.20 – Source.

$1 Million Investment Fraud Scheme Could Mean 25 Years In Jail

Amanda Miller — Sat, 08 Oct 2011 14:00:59 +0000

From How to Get Out of Debt

On Thursday, October 7, 2011 Rober Schroy, of California, pleaded guilty to wire fraud and tax evasion for his role in a $1 million investment fraud scheme. Schroy pleaded guilty to one count of wire fraud and one count of tax evasion.

According to filed documents in this case:

Schroy said from 2004 through 2009 he solicited people to invest in an alleged “international bank trade.” Schroy admitted he and his co-schemers falsely promised prospective investors extraordinary gains – ranging between 10 and 100 percent per week for a minimum period of 25 weeks – plus the return of their principal investment. Based on Schroy’s misrepresentations, numerous investors from multiple states in the US wired investment monies to accounts controlled by Schroy and his co-schemers. The money was wired to the designated accounts, however, Schroy admitted it was not invested in any supposed bank trade. Instead it was used by Schroy and his co-schemers for personal expenditures, including automobiles, vacations, and meals at restaurants. In total, Schroy admitted he and his co-schemers misappropriated at least $1 million in investor money.

Schroy admitted in his guilty plea that he failed to file his 2007 tax return and did not report $479,566 of taxable income which $151,781 of that was owed to the IRS.

Schroy now faces a maximum of up to 25 years in prison and a $500,000 fine. Wire fraud has a maximum penalty of 20 years and tax evasion, 5. Each count caries a fine up to $250,000 – Source.

The Flucker Family Fraud Affair

Amanda Miller — Fri, 07 Oct 2011 16:37:36 +0000

From How to Get Out of Debt

A family of fraudsters have been sentenced after finding guilt in the connection with a massive “affinity” fraud scheme where around 2,000 victims were swindled out of about $10.7 million.

Father, Roy Fluker, Jr., was sentenced to 15 years in prison while his son, Roy Flucker, III and his daughter Ronnanita Flucker each got 8 year sentences after being convicted on multiple fraud counts.

All three defendants participated in a scheme between 2005 and 2008 in which they fraudulently obtained approximately $18 million from victims, as well as some victims’ homes, through their operation of companies called All Things in Common, LLC, which did business as More Than Enough, LLC and Locust International, LLC. The defendants marketed what they touted as an educational and financial program called the “Spend and Redeem Program.” They represented to participants in the program that in return for an investment of money, the participants would receive 25 percent of their total investment every month for 12 consecutive months — a 200 percent profit in one year.

Defendants also marketed what purported to be a financial program called the “Housing Program,” which they claimed provided a way for people to reduce their mortgage payments and to own their homes clear of any mortgage within five years.

The Flucker family would target members of the African-American exclusively at church and hotel events in the Chicago area.

The defendants made numerous misrepresentations and material omissions as part of the fraud scheme, resulting in obtaining more than $18 million from thousands of participants in the Spend and Redeem Program and from more than two dozen Housing Program participants in about only 18 months. They misappropriated much of the participants’ money and property for their own use, as well as to make Ponzi-type payments to earlier participants.

Millions of dollars that were fraudulently obtained were paid back to certain investors, and losses totaled approximately $10 million when the scheme collapsed in 2006. After local banks froze multiple accounts the defendants used to commit the fraud, the Illinois Attorney General’s Office successfully recouped approximately $3.4 million for victims, resulting in a remaining loss today of more than $7.3 million.

The Flucker family has been imposed with $9 million preliminary forfeiture judgements and ordered to pay $7,336,957 in restitution – Source.

No word has been mentioned about if or where the mother “Flucker” is.

Union Hispana Defrauds Multiple Virginia Banks

Amanda Miller — Thu, 06 Oct 2011 18:01:56 +0000

From How to Get Out of Debt

This just in! ANOTHER person thought it would be a GREAT and SUPER SMART idea to defraud a bank … and it WASN’T! When will people learn?

Multiple Virginia banks were defrauded almost $3.4 million by Osvaldo Mercado for submitting fraudulent loans.

Mercado was indicted on conspiracy, six counts of bank fraud, two counts of mail fraud, and two counts of fraud in connection with identification documents. If convicted, he faces a maximum penalty of 30 years in prison on each bank fraud count, five years on each mail fraud count, and 15 years on each identification document fraud count.

According to the indictment, Mercado operated a tax preparation business, Union Hispana, based out of Northern Virginia. Beginning in 2004, Mercado allegedly began helping clients of complicit realtors secure personal mortgage loans by creating fraudulent tax letters stating that the borrowers had self-employment income and owned their own businesses.

In fact, the borrowers often had low-wage jobs and could not afford the homes or qualify for the loans. As part of the scheme, Mercado’s company also prepared fraudulent tax returns knowing that they were never intended to be filed with the IRS. The indictment states that, based in part upon the fraudulent tax letters prepared by Union Hispana, Virginia banks approved more than a dozen personal mortgage loans to clients who were unemployed and lacked the ability to repay the loans.

During the three-year scheme, these lenders were allegedly cheated out of $3.4 million in fraudulent loans – Source.

Mercado was indicted by a federal grand jury on September 29, 2011 and as always indictments are not evidence of guilt. Mercado is presumed innocent until and unless proven guilty.

Root Canals and Appendectomy Were Expensive and Landed Me in Bankruptcy. – Ray

Lewis Roberts — Sun, 02 Oct 2011 15:55:29 +0000

From How to Get Out of Debt

“Dear Lewis,

Made many not so smart mistakes which put me into serious credit card debt over the past 8 years or so. Followed by some dental work (multiple root canals) that had to be paid with credit card. Last year, had an emergency appendectomy that ended up in an medical insurance mess up. Ended up with 15K bill on that. By this time, I was far behind on credit card payments, with all accounts in the red. Collection calls from many, and a filed law suit by one creditor. Was forced to file bankruptcy. Initially tried for 7, but I make well above median income (firefighter/paramedic with two jobs), and only could qualify for 13. Total debt was around 44k, however only 36K was claimed by creditors. My attorney submitted my plan to the trustee, however she requested much much higher payments based on my income. At this point Im waiting for my attorney to submit the amended plan and hopefully get confirmed.

I have a few questions ! First of all, how high can the trustee raise my payments if I am on a 100% plan ? Do they routinely request pay stubs, or tax info each year ? If I do have an increase in income, how much of an increase would cause her to raise the payments anymore ? The reason im asking is this; I planned on taking another part time job….to comfortably afford to make the payments, as well as saving some money. In 5 years when this is behind me, Id like to have something in the bank so I can start to rebuild my life. Im not talking a huge increase in pay, but enough that I can make payments, pay my bills, still have plenty left over for unseen emergencies, and to build my savings. I did already ask the trustee if saving was allowed during a chapter 13, and she said that yes it was legal in this district.

Ray”

The Answer:

Dear Ray,

Unfortunately, each bankruptcy district is different in its nuances. Even within bankruptcy divisions it can be different. And sometimes there may be two chapter 13 trustees in the same division (heavily populated areas), and each trustee could be different.

Each year the chapter 13 trustee is going to require you to send a copy of your tax return. They generally do not ask for paystubs after the case is confirmed.

But if you are paying 100% of your creditors back, then usually the trustees do not care how much money you make or whether your income goes up.

The questions would be how your trustee wants you to pay back the 100%. Since you have only $36,000 in claims, in my district, you could choose to pay $1,000 for 36 months, $2,000 for 18 months, $600 for 60 months, or any combination that pays it in full.

But in some other districts, you are required to pay all of your disposable income each month until it is paid in full.

Without knowing your exact income and allowed expenses, I don’t know your disposable income. But lets say it is $3,000. Then in this scenario, you would pay $3,000/month for 12 months and get a discharge.

Good luck!

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

If you have a bankruptcy question you’d like to ask just use the online form.

Mass Joinder Update – Office Furniture to be Sold

Steve Rhode — Sun, 02 Oct 2011 15:28:00 +0000

From How to Get Out of Debt

The official receiver for the California action against companies marketing mass joinder suits has posted an update.

The physical office spaces which are asked to be liquidated are:

30 Corporate Park, Suites 455-465 and Suite 400, Irvine

2975 Red Hill Avenue, Suite 100, Costa Mesa

1800 East Gary Avenue, Suites 203 and 207, Santa Ana

5855 Green Valley Circle, Suite 209, Culver City

3151 Airway Avenue, Suite F-200, Costa Mesa

151 Kalmus Drive, Suite D210, Costa Mesa

6345 Balboa Boulevard, Suite 138, Encino

23901 Calabasas Road, Suite 2006, Calabasas

The receive is asking for permission to liquidate the properties and contents because it was determined that “all of these enterprises [run by the Defendants] are so intertwined in illegal fee-splitting, deceptive advertising, and illegal loan modification services that they could not be continued lawfully or profitably.” – Source

The receiver is additionally moving to have the mass joinder office locations closed in an effort to try to protect funds to return to consumers.

“The likely result of this is that the landlords will never be paid, or if they are paid, it will come at the expense of the consumers that Defendants are alleged to have victimized through unlawful practices.”

In a disappointing note the receiver is already indicating there will probably be insufficient funds to refund consumers.

@GetOutOfDebtGuy

Dead Cross Dressing Man’s Finger Prints Found on His Own Death Certificate.

Amanda Miller — Fri, 30 Sep 2011 20:40:53 +0000

From How to Get Out of Debt

I love England. I had the good fortune to live there for almost 2 years and I found the people delightful, to observe. This is one of the reasons I’m fascinated with the british subjects. Anthony McErlean, age 66, faked his own death in Honduras and then tried to collect £520,000 from an insurance company, posed as has his own wife. I’ve seen a picture of him and I can only imagine, he’s not pretty as a woman either. If that doesn’t show an unusual quirkiness, I don’t know what does.

September 30, 2011, Mr. McErlean has been sentenced for six years in jail after a judge found him guilty of ‘deliberate and calculated fraud’. Supposedly in December 2009, McErlean and a fictitious travel companion were in Honduras to take wildlife pictures when McErlean was mowed down by a truck carrying cabbages as he was changing a tire. His body was then taken away by farm workers in a cabbage truck who took it to a small village called Santa Rosa de Aguan.

Posing as his own wife, McErlean, took fake official documents, including a death certificate, to Ace European Insurance Company stating her husband was killen in Honduras and his body had been cremated. The company was suspicious because his passport was not part of the documents presented. They then contacted the Insurance Fraud Bureau who then started an official investigation.

Before any money was given, McErlean was found in Kent going by the name of Green. The clincher was his finger prints were on his own death certificate. He was then found to be claiming pensions relating to his late father-in-law from a previous marriage. On June 13, 2011, McErlean pleaded guilty to fraudulently making a claim to Ace European Insurance Company, fraudulently obtaining a passport and two counts of theft from a pension fund from the Port of London Authority totalling some £27,000 and £40,658 from the Department of Work and Pensions.

Where did the fraudulent passport come from? After, McErlean was arrested he was released on bail on the condition that he not apply for a new passport. The very next day he applied for a new passport claiming he lost his original, which was actually taken by the police.

Oh it get’s better, McErlean insisted that the documents he obtained in Honduras were not faked, they were genuine but he thad to obtain them by bribing officials to get them.

The real Mrs. McErlean was not charged because she was not aware of the claim. The reason McErlean wanted the money, he ‘didn’t want to be destitute in old age’. But don’t let that tug at your heart string for very long. McErlean a twice-married father and has convictions dating back to 1963, including robbery, possession of a firearm and dishonesty. – Source

Trapped in a Debt Settlement Contract. What to Do? – Dean

Michael Bovee — Thu, 28 Apr 2011 20:44:00 +0000

From How to Get Out of Debt

“I contracted a debt settlement company now that it changed. I signed with them back in May of 2010, this was before the new law changed for settlement companies not to be able to charge up front for settlements.

The contract is crazy, and I was stupid to sign it. I was totally delusional from stress and depression when I did sign it. It was nothing like the verbal sales pitch I got.

Even when the company makes a settlement for me they don’t see it through in a timly manner. Four have been made and so far none have been paid even though there is mopney to pay them.

They come up with numerous excuses to put off even paying the ones that are settled out of my global account set up by myself and the company. again the money is avaliable to pay the accounts.

The only reason in my opinion to delay is to keep getting monthly draws from me to make sure I stay I the program. I am afraid to do the ” How to get out of the debt relief program and get a big refund,” Because I have over $13,000.00 invested in the deal already.

At the risk of feeling totally stupid, I will tell you that the contract says that they can terminate at any time withut recourse and so can I. the problem is i will loose everything in put in. Now that is stupid on my part. I feel trapped because I am settling the accounts myself, and sending them the paper work to do the draft, and they tell me not to do that because it messes up the flow. What flow? The account is settled so just pay it!!!! The money is there?

So again be careful of the way these settelments contracts work. Read them good and have somebody who is sane to read them with you. Document everything. Most of them so far as I can see are set up to keep you in the program and drain you for all the money they can get, and not give service to match. I don’t know what to do. I actually hate this company now when at first I believed they would help me.

Is there any recourse. Am I basically trapped, or can I get a rtefund or get a re-write of the contract to be funded by progression of payments and settlements being made? Can I even get a copy of the new contract that them MIGHT have to use now after the change came in october of 2010.

Dean”

The Answer:

Hi Dean,

Who is the company that you signed on with for debt settlement?

You refer to the 13k you have already invested into the process. Is that 13k total inclusive of advance fees you have been paying as well as what remains in your escrow account? Who is you escrow account set up through?

If you are sending letters of settlement to the debt settlement company and they are not being funded with available escrow funds, I believe you have legitimate concerns. A vague excuse like “upsetting the flow” does not hold water. The opposite is that by not accepting and funding fair offers your program “flows” to being sued for the unpaid debts.

You requesting a refund may/may not fall on deaf ears. It is certainly something you should explore, but I would encourage you to answer my questions in the comment section below before doing so. Your answers may provide details that would suggest a different course.

Additional questions:

Who are the creditors you could have settled with that you refer to?

What were the offered savings?

What amount do you currently have available in escrow?

Just post your answers in the comments below. I look forward to commenting more once I have more detail.

Michael

Should I Hire All State Law Group to Modify My Bank of America Mortgage? – Charles

Andy Faria — Thu, 28 Apr 2011 19:40:20 +0000

From How to Get Out of Debt

“Dear Andy,

Tried twice to to get a modification with BOA with no success,have ask a law firm to help, but cant find any info on the firm

Should I retain this law firm from calif. THEY WHAT THREE PAYMENTS ONE TO START, THEN ONE IN THE MIDDLE AND THE REST AT THE END. 1500-1000-500.
Sr. Underwriter
Toll Free: 866-887-4691 xt. 303
Fax: 877-890-5237
Website: www.aslawgroup.com
Email: Joperana@aslawgroup.com

Charles”

The Answer:

Dear Charles,

I cannot tell you whether or not to use All State Law Group. I’ve never heard of them, and I have no first-hand experience with them.

First, you should know that as of Jan 2011 the Federal Trade Commission (FTC) implemented a new nationwide rule that regulates how all mortgage relief providers are allowed to operate. Non-attorney’s are not allowed to accept any upfront fees whatsoever, and here is how the FTC words their exemption for attorney’s:

Does All State Law Group meet all of these requirements? I don’t know, but before you send them one dime, you will want to make sure they do. There are way too many horror stories of homeowners trusting both attorney’s and non-attorney’s to modify their loan, and ending up with nothing in return. If they’re in the business they should be well aware of these rules and transparent about their compliance with them.

The next issue that raises some concern is the fact that you have already tried to modify your loan twice now, unsuccessfully. Why did BOA deny the modification previously? If they have your finances accurately on file, and they denied you for either too much or not enough income, there won’t be much that anybody is able to do to change the outcome. BOA does not have any obligation to modify your loan, you must qualify for the programs available. If you don’t qualify based on your accurate financials, the only option you would have to modify would be to either lie about your income/expenses, or truly increase or decrease your income/expenses.

Before you go hiring an attorney and paying $3000 to make a third attempt at modification, you should get further assurance that you are in fact a good candidate. Otherwise you could end up wasting a lot of time and money that could be better spent pursuing other options.

Good luck and please keep us posted in the comment section below. I am subscribed to this post and can always answer any questions you may have in the future.

Andy

If you have a mortgage, short sale, real estate, or loan modification question you’d like to ask just use the online form. I’m happy to help you totally for free.

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