Three California men stand accused of preying on distressed borrowers by falsely promising that they could help the borrowers secure a mortgage modification with interest rates as low as 2%.

The three men, – Michael Paquette, Allan Chance, and Dennis Lake, were arrested late last week after a federal grand jury handed down an eight-count indictment.

According to the indictment, the scheme took place from early 2014 through April 2015.

Paquette and Chance used aliases and told distressed homeowners that they worked for HAMP Services, a Laguna Hills-based company that borrowed its name from the government’s Home Affordable Modification Program (also called HAMP).

According to the indictment, Paquette and others originally began soliciting victims by claiming that they worked for a company called Hope Services. But, after victims made numerous complaints about Hope Services, the conspirators began using the name HAMP Services starting in late 2014.

The indictment states that Paquette and Chance told the borrowers that they were approved for a government-affiliated loan modification, but needed to make three “trial payments” before their mortgage would be modified.

Chance also allegedly claimed that he had experience with loan modifications because he worked at Bank of America.

After the borrowers made the “trial payments,” they were referred to Lake, who ran a business called JD United.

The indictment alleges that Lake and his employees continued the ruse of the promised loan modifications by assuring the borrowers that they were working on their cases. Lake and his employees also allegedly told borrowers there was no need to contact law enforcement about the “trial payments” they had made.

According to the indictment, the scheme’s victims were never told that their “trial payments” actually went to JD United, and that Paquette and Chance received commissions directly from those “trial payments.”

The indictment states that none of the victims’ money went to lenders or a government agency for a loan modification.

All told, investigators believe that the scheme defrauded at least 500 victims nationwide out of at least $2.5 million in “trial payments.”

Paquette, Chance, and Lake are charged with conspiracy to commit mail fraud. Paquette is also charged in three substantive mail fraud counts, Chance in four mail fraud counts, and Lake in six mail fraud counts.

If Paquette, Chance, and Lake are convicted, each face a statutory maximum sentence of 30 years in federal prison for each count.

Two other conspirators involved in the scheme previously pleaded guilty and are awaiting sentencing.