Mortgage modification fraudsters sent to prison for massive HAMP scheme

California crew sentenced for operating nationwide scam

A group of California residents who were convicted of stealing more than $7 million from struggling homeowners as part of a mortgage modification scheme received their sentencing this week, with the leader of the scam being handed a 20-year sentence.

In June, Christopher George, 45, of Rancho Cucamonga; Crystal Buck, 40, of Long Beach; and Albert DiRoberto, 62, of Fullerton; were convicted for their roles in a scheme that offered phony mortgage modifications to thousands of financially distressed homeowners who lost more than $7 million when they paid for services that were never provided.

According to a release from the Special Inspector General for the Troubled Asset Relief Program, George, Buck, DiRoberto, and Yadira Pidilla, 38, were employees of a California-based telemarketing operation known under a series of names, including 21st Century Legal Services, Inc.

Employees of 21st Century made numerous misrepresentations to more than 4,000 victims during the course of the scheme, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the United States government. 

Victims were generally instructed to stop communicating with their lenders and to stop making their mortgage payments.

According to SIGTARP, Ramirez and other 21st Century employees would, on occasion, tell homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when in fact Ramirez, George, and their co-defendants were simply pocketing the homeowners’ money.

“Mortgage modifications under TARP’s Home Affordable Modification Program are free, a homeowner does not need an attorney to apply, and no one can guarantee that an application will be approved in advance, but criminals, like these four from 21st Century, prey on homeowners with the promise that with an attorney working on their case for a fee, they are guaranteed a lower mortgage payment or their money back,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program.

“Struggling homeowners, including school teachers and retirees, thought that 21st Century was part of the government ‘Obama Plan’ to save their homes by a company that had a 98% success rate, but instead they became victims to a disgusting fraud scheme built entirely on lies, and in the end many lost their houses,” Romero continued.

“The monies they lost never went to their mortgage payment, but instead went into the pockets of criminals,” Romero said. “These non-attorneys said whatever was needed to get homeowners to part with their money, and told homeowners not to talk to their lenders to cover their tracks. Most homeowners’ files sat untouched for months and many were closed with no work. Some work included false statements sent to lenders, including banks that received TARP.”

According to SIGTARP, George was a co-owner of 21st Century and acted as a sales manager. He also ran his own sales office there for several months.

George instructed 21st Century employees to make misrepresentations to distressed homeowners, including guaranteeing that 21st Century would obtain loan modifications and telling homeowners that payments made to 21st Century would go toward homeowners’ mortgages.

For his part in the scheme, George received a sentence of 20 years in federal prison.

Buck, a sales “closer” who persuaded numerous victims to pay fees to 21st Century received a sentence of five years; DiRoberto, handled sales and marketing – which included making a commercial for 21st Century and preparing talking points to respond to negative publicity – was sentenced to five years in prison; and Padilla, who handled client complaints and refund requests, and who posted bogus reviews of the company on the internet – was sentenced to four years.

In addition to the prison term, a California judge ordered George to pay $7,065,117 in restitution to victims of the scam. Buck, DiRoberto and Padilla were ordered to return to court next month for restitution hearings.

In total, 10 former 21st Century employees pleaded guilty to charges related to the scheme. The six remaining defendants are scheduled to receive their sentences later this year.

“George, DiRoberto, Buck and Padilla have time in federal prison to dwell on the devastation they caused to innocent people,” Romero said. “SIGTARP stands united with our prosecutor partners to stop all TARP-bailout related crime.”

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