Two men pled guilty for their roles in orchestrating a massive mortgage modification scheme that collectively defrauded over 8,000 homeowners out of over $18.5 million.
Ped Abghari, who went by the name Ted Allen, of Irvine, California, and Justin Romano of Blue Point, New York, each pled guilty to wire fraud and conspiracy to commit wire fraud, and Abghari also pled guilty to misprision of a felony.
According to the Indictment, and statements made at the plea proceedings, Abghari was a president and owner of an Irvine, California, company that offered purported mortgage modification services. Romano held himself out as the president of two purported law firms, based in Holbrook, New York, and Sayville, New York, which offered purported mortgage modification services in conjunction with the telemarketing firm.
From at least January 2011 through May 2014, through the firms, Abghari and Romano, among others, perpetrated a scheme to defraud homeowners in dire financial straits who were seeking relief through HAMP and other mortgage relief programs.
Through a series of false and fraudulent representations, the defendants duped thousands of homeowners into paying thousands of dollars each in up-front fees in exchange for little or no service from the defendants or their companies. In total, through their scheme, the defendants obtained over $18.5 million from more than 8,000 victim-homeowners throughout the United States.
Abghari and others purchased thousands of “leads,” consisting of the name, address, and other contact information of homeowners who had fallen behind in making mortgage payments on their homes.
Abghari and others then caused the Telemarketing Firm to send, by e-mail, false and fraudulent solicitation letters to the homeowners they identified through the “leads,” misleading these homeowners into believing that their mortgages were already under review and that new, modified rates had already been contemplated and approved by the homeowners’ lenders.
According to prosecutors, here’s how it happened:
At the direction of Abghari and Romano, among others, the Telemarketing Firm’s telemarketer and sales people (the “Sales Staff”) called homeowners and/or answered telephone calls from homeowners who received the Telemarketing Firm’s fraudulent solicitations. During these calls, in an effort to convince the homeowners to pay up-front fees, the defendants, through the Sales Staff, regularly caused various false and fraudulent representations to be made to homeowners, including that (a) the homeowners were retaining a “law firm” and an “attorney” who would complete the HAMP application and negotiate aggressively on the homeowners’ behalf with banks to modify the terms of the homeowners’ mortgages; (b) the defendants would “pre-approve” the homeowners for a guaranteed modification through HAMP; (c) the defendants employed underwriters who would calculate and guarantee the homeowners a new, modified rate and monthly mortgage payment; and (d) the defendants’ mortgage modification services were free, and the up-front fees paid by the homeowners would be paid directly to the homeowners’ lenders. In truth and in fact, and as Abghari and Romano well knew, all of these representations were false and fraudulent.