Blog Enforcement Watch October 26, 2020

Federal Judge Sentences Owner of Fraudulent Mortgage Scheme to 240 Months’ Imprisonment

On October 26, 2020, the U.S. Attorney for the District of Hawaii announced that a federal judge sentenced the owner of a fraudulent mortgage relief scheme to 240 months’ imprisonment, after the jury convicted the owner of 32 counts of wire fraud and mail fraud.

The owner created two companies, neither of which were properly licensed to service mortgages.  Through these companies, the owner promised clients legal representation in connection with mortgages and falsely claimed he could either eliminate clients’ existing home mortgage obligations or cut clients’ mortgage obligations by half.  As part of the scheme, the owner filed fraudulent documents with the Hawaii Bureau of Conveyance, including new mortgages and notes obligating clients to make mortgage payments to his company.  After filing these new mortgage documents, the owner told clients to stop paying their mortgage lenders and to pay the owner instead.

The owner operated this scheme from 2012 to 2015 and never provided any legitimate mortgage services.  In total, the owner enlisted 112 victims to participate in his fraudulent mortgage scheme and acquired over $230,000 from his victims.  This scheme caused many consumers to go into foreclosure or bankruptcy.

The court sentenced the owner to 240 months’ imprisonment set to run consecutively to a fifteen-year sentence of imprisonment that a Florida court handed down earlier to the owner in connection with a similar fraudulent scheme in the State of Florida.