A federal jury needed less than a half hour to convict the ringleader of what the Manhattan U.S. Attorney’s Office called the “largest mortgage modification scheme ever charged” on multiple charges stemming from a scheme that defrauded more than 30,000 struggling homeowners out of $31 million.
According to the offices of the Special Inspector General for the Troubled Asset Relief Program and the United States Attorney for the Southern District of New York, Dionysius Fiumano, also known simply as “D,” was found guilty Tuesday for leading a massive mortgage modification conspiracy that preyed on ten of thousands of homeowners.
Documents and evidence presented during Fiumano’s trial showed that he served as the general manager of sales at Vortex Financial Management, which was also known as Professional Marketing Group, and Professional Legal Network, an Irvine, California-based company that offered mortgage modification services.
As general manager, Fiumano oversaw PMG’s sales staff that included approximately 65 telemarketers and managers.
From approximately November 2011 through May 2014, Fiumano “perpetrated a scheme” to defraud homeowners that were struggling to pay their mortgages by falsely representing that PMG could obtain a mortgage modification through the government’s Home Affordable Modification Program.
“Through a series of false and fraudulent representations, Fiumano duped thousands of homeowners into paying thousands of dollars each in up-front fees in exchange for little or no mortgage modification service,” SIGTARP and the U.S. Attorney’s Office said in a statement. “In total, through their scheme, Fiumano and his co-conspirators obtained approximately $31 million from more than 30,000 victims.”
In order to conduct the scheme, PMG purchased thousands of leads, which included the name, address, and other contact information of homeowners who had fallen behind in making mortgage payments on their homes.
Then, PMG sent false and fraudulent solicitation letters by e-mail to the homeowners, deceiving these homeowners into believing that their mortgages were already under review for a modification.
PMG also told the homeowners that the homeowners’ lenders already approved new, modified interest rates, when in actuality, none of it was true.
According to SIGTARP and the U.S. Attorney’s Office, PMG’s staff also called and emailed the struggling homeowners and repeatedly lied to them, promising that in exchange for up-front fees, the company could deliver a “law firm” and an “attorney” who would complete a mortgage modification application and negotiate aggressively on the homeowners’ behalf with banks to modify the terms of the homeowners’ mortgages.
PMG also promised that the homeowners had been “pre-approved” or “pre- qualified” to receive a mortgage modification.
PMG’s employees also stated the company employed underwriters who would calculate and guarantee the homeowners a new, modified rate and monthly mortgage payment; and that the up-front fees paid by the homeowners would be paid directly to the homeowners’ lenders, to the attorneys to pay their fees, or to pay the purported “hard costs” of the modification – all of which were lies.
“A jury convicted Dionysius Fiumano for his role in orchestrating an elaborate advance fee scheme that defrauded more than 30,000 struggling homeowners out of more than $30 million,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program.
“Using HAMP as the backdrop for their fraud, Fiumano and his co-conspirators conned homeowners who had fallen behind on their mortgage payments into believing their mortgages were being modified,” Romero continued.
“In reality, they did little or nothing to help these homeowners. And when consumer complaints attracted attention, the co-conspirators renamed their companies to continue the fraud,” Romero added. “These crimes were uniquely despicable, as HAMP is a free federal government housing program designed to help those most impacted by the financial crisis. Rather than offer relief, Fiumano added to the distress and despair of thousands of innocent Americans struggling to stay in their homes.”
For his crimes, Fiumano was convicted of one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a statutory maximum sentence of 20 years in prison.
Fiumano is currently scheduled to be sentenced on Sept. 13, 2016.
Several of Fiumano’s co-conspirators have also been convicted for their roles in the scheme.
Pedram Abghari, also known as “Ted Allen,” pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a statutory maximum sentence of 20 years in prison, and one count of misprision of a felony, which carries a statutory maximum sentence of three years in prison.
Justin Romano pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud. Mahyar Mohases pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud.
“Dionysius Fiumano was the ringleader of a heartless criminal conspiracy that preyed on desperate homeowners struggling to pay their mortgages,” Manhattan U.S. Attorney Preet Bharara said. “Claiming to offer a lifeline to homeowners, Fiumano deceived tens of thousands into paying exorbitant fees for mortgage modification services they never got.”