U.S. District Judge Stefan Underhill sentenced Aria Maleki to 112 months of imprisonment, followed by three years of supervised release for leading a mortgage loan modification scheme that defrauded more than 1,000 homeowners.
In March, the ringleader of a massive mortgage modification fraud scheme pleaded guilty to charges that he and others conspired to defraud struggling homeowners by falsely promising mortgage loan modifications they did not actually provide.
“Aria Maleki stole millions by lying that his companies had ties to HAMP and could offer relief to homeowners struggling to avoid foreclosure,” said Christy Goldsmith Romero, Troubled Asset Relief Program special inspector general.
“Every single victim was left worse off; many lost thousands of dollars and some, after promised modifications failed to materialize, lost their homes,” Romero said. “Homeowners should be wary of any business charging up-front fees, advertising pre-approval at rates more favorable than industry norms, or offering money-back guarantees.”
Court documents showed that the group did business under company names that sounded close to legitimate servicing company names, most notably Green Tree Servicing and Nationstar Mortgage. For instance, the group's false company names included Green Tree Financial and Nation Star Financial.
The group also did business as First Choice Financial Group, First Choice Debt, Legal Modification Firm, National Freedom Group, Home Care Alliance Group, Home Protection Firm, Hardship Center, Network Solutions Center, Premiere Financial, Rescue Firm, International Research Group, Hardship Solutions, American Loan Center, Loan Retention Firm, Clear Vision Financial, Enigma Fund,National Aid Group, Southern Chapman Group, Save Point Financial and Best Rate Financial Solutions.
“This defendant presided over a scheme that preyed on struggling homeowners in Connecticut and across the United States, falsely offering mortgage relief in exchange for thousands of dollars that the victims clearly could not afford to spend,” said Deirdre Daly, U.S. Attorney for the District of Connecticut. “The investigation revealed that the participants in this scheme specifically targeted homeowners who were behind on their mortgage payments, whose homes were under water, or who had recently experienced a financial hardship, such as a lost job.”
“This is an appropriate sentence for a defendant who profited handsomely from such heartless, criminal conduct,” Daly said. “I thank our federal and state law enforcement partners in New England, New Jersey, California and Oklahoma for investigating this matter, shutting down this scam and bringing those responsible to justice.”
Acting as representatives of these entities, Maleki and his co-conspirators cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans. The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services.
To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.
“This sentence should serve as a strong warning about the consequences awaiting those engaged in large-scale financial fraud,” said Terence Opiola, Special Agent in Charge of Homeland Security Investigations in Newark. “The organization identified in this case was responsible for harming countless innocent victims.”
“Working with its enforcement partners, HSI will continue to aggressively target thieves to ensure the perpetrators face the full weight of the law,” Opiola said.
Participants in the scheme used pseudonyms and periodically changed their business and operating names to evade detection. The group also directed homeowners to mail their checks to addresses and mail boxes that the defendants and their co-conspirators had set up in states other than California.
Maleki presided over the entire structure of this scheme. As a result, more than 1,000 homeowners suffered losses totaling more than $3 million.
“Aria Maleki took advantage of the national mortgage crisis,” said Shelly Binkowski, postal inspector in charge for the Boston division of the U.S. Postal Inspection Service. “This sentencing clearly demonstrates that those who target hardworking homeowners in today’s challenging economy will be held accountable and prosecuted.”