US$ 2 Million Fraud, FTC shutters Dominican mortgage operation
(ctwatchdog.org) - At the request of the Federal Trade Commission, a U.S. district court has halted a nationwide scam operating from the Dominican Republic – but pretending to be in Chicago – that allegedly peddled fake mortgage assistance relief to financially distressed Spanish-speaking homeowners in the United States. The defendants promised to dramatically lower homeowners’ monthly mortgage payments in exchange for a hefty upfront fee, and collected more than $2 million in fees during the last three years, but failed to provide homeowners with the promised services [webteam please link to complaint], according to the FTC complaint.

 

Speaking in Spanish and targeting homeowners behind in their payments or facing foreclosure, the telemarketers would empathize about the tough economy and claim to provide information about federal mortgage assistance programs, according to the complaint. In lengthy sales calls, the telemarketers would lie to create a sense of trust, falsely claiming to be affiliated with or approved by the consumers’ lenders or the government [webteam please link to TRO memo], and “making sure to mention President Obama or the Making Home Affordable Program by name,” according to documents filed with the court.

Charging what they said was a one-time advance fee of $995 to $1,500, the callers allegedly falsely promised homeowners a mortgage modification in 30 to 90 days, often advising them to stop paying their lenders. The callers often promised that when the loan modification was finalized, the homeowners’ lenders would forgive any past-due payments and late fees, the complaint states.

Homeowners who signed up received a batch of forms in the mail that required them to provide extensive personal and financial information and pay an advance fee, according to the complaint. After paying the fee and not hearing further from the defendants for weeks afterward, some homeowners who managed to reach a live representative were told that the modification process was underway, but they needed to pay up to several thousand dollars in additional fees. In the end, the FTC alleged, few homeowners got any loan modification – or anything else of value from the defendants. And what they did receive, they could have gotten for themselves for free.

The court order stops the illegal conduct and freezes the operation’s assets while the FTC moves forward with the case.

As part of its continuing crackdown on scams targeting consumers in financial distress, the FTC charged Minnesota resident David F. Preiner, who allegedly owns and directs six companies named as corporate defendants in the scam:

  • Freedom Companies Marketing, Inc., Freedom Companies Lending, Inc., and Freedom Companies, Inc., all based in Centerville, Minnesota and using a Chicago address.
  • Grupo Marketing Dominicana, based in Santo Domingo, Dominican Republic.
  • Freedom Information Services, Inc., based in Miami, Florida, and
  • Haiti Management, Inc., based in Vero Beach, Florida.

The complaint charges the defendants with violating the FTC Act and the Mortgage Assistance Relief Services Rule, known as the MARS Rule, by:

  • Falsely representing that they could get a mortgage modification that would make consumers’ mortgages significantly more affordable.
  • Falsely representing that they were affiliated with the U.S. government.
  • Misrepresenting the likelihood that they could get a mortgage modification for clients; that they could do it quickly at a specified price; and that they were affiliated with the U.S. government, a governmental homeowners’ assistance plan, or consumers’ banks.
  • Failing to disclose to homeowners that if they discontinued paying their mortgages, they could lose their homes and damage their credit ratings.
  • Not disclosing that a consumer can choose whether to accept an offer of mortgage assistance that the defendants obtain from the consumer’s lender.
  • Requesting and receiving advance payments from homeowners without a written modification agreement between the consumers and their lenders.

The FTC would like to thank Pro Consumidor: Instituto Nacional de Protección de los Derechos del Consumidor of the Dominican Republic; the Idaho Department of Finance, Consumer Finance Bureau; the Utah Department of Commerce, Division of Real Estate; and the Better Business Bureau of Chicago and Northern Illinois for their assistance in this case. The Commission has advice for consumers about managing their mortgages. For more information see: Your Homeand Mortgage Payments in English, and Su Casa and Pagos de Hipotecain Spanish.

The Commission vote authorizing the staff to file the complaintwas 5-0. The FTC filed the complaint and request for a temporary restraining order in the U.S. District Court for the Northern District of Illinois, Eastern Division on July 23, 2012, and the court granted the FTC’s request the same day.

NOTE: The Commission files a complaint when it has reason to believe that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

 

Dominican Watchdog Note| Hundreds of scams are operated out of the Dominican Republic, the biggest being the PHONE SCAM targeting elderly people in the United States sending millions to the DR through Western Union.

Below a list of other Dominican scams:

 

Billions Lost in US Tax-Refund Scam masterminded in Dom Rep

     
 
 

Two people familiar with the investigation say the Puerto Rican tax scam was masterminded by a group in the Dominican Republic. According to criminal investigators, a single Puerto Rican Social Security number goes for about $8 to $10 on the black market, with stolen identities of children sometimes used to add dependents to the returns in order to inflate the refunds.......

 

 

U.S. Man Pays $1,600 To Reseller In Dom Rep, But Timeshare Unsold

     
 
 

The Federal Trade Commission received more than 5,000 timeshare-resale complaints last year, an alarming increase from slightly more than 800 in 2009. Lincoln Bertaccini of Morris began to wonder if he, too, might have been a victim after being contacted last November by a Universal Timeshare representative. Universal Timeshare is operated from the Dominican Republic......

 

 

Drug ring made up of doctors and pharmacists dismantled in the DR

     

National Drug Control Department (DNCD) officers have dismantled an international ring made up of doctors and pharmacists who engaged in selling controlled substances to clients in the United States through a Call Center. The group gave its clients the impression that it was US-based.......

Go back | Date: 20 Aug 2012
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