California Real Estate Fraud Report

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07
Jun

First Defendant in Southern California Loan Modification Fraud Case Pleads Guilty

The first of five men charged with running a number of loan modification scams across the county has pleaded guilty.

Andrew Michael Phalen, 25, received one year in jail and five years of formal probation. He and his entrepreneurial co-defendants forged letters with CitiFinancial and CitiMortgage logos in order to convince homeowners in distress to work with their companies.

Long after the California Attorney General’s Office banned loan modification companies from charging advance fees (October 2009), Phalen and his co-defendants, Jacob John Cunningham, 25, of Irvine; Justin Dennis Koelle, 22, of Costa Mesa; Dominic Adam Nolan, 31, of Irvine; and John D. Silva, 27, of Irvine, set-up a host of companies purporting to help borrowers restructure their home loans

The names of the loan modification fraud businesses are CSFA Home Solutions, Mortgage Solution Specialists, Inc., CS & Associates, National Mortgage Relief Center, National Mortgage Relief Center, NMRC, NMRC Inc., N.M.R.C. Inc., Allied Home Servicing and Allied Loan Servicing.

Phalen appears to be the small fish of the five individuals charged; he pleaded guilty to taking people’s money without performing the loan modifications and failing to return it.

Co-defendants Cunningham, Nolan and Silva are accused of boldly sending forged “Conditional Approval” letters with CitiFinancial or CitiMortgage logos in the letterhead to the homeowners and promising to lower their interest rates if $3,500 and $4,600 were deposited into “escrow” accounts that belonged to those defendants.

Of course, Cunningham, Nolan and Silva had no real affiliation to CitiFinancial or CitiMortgage, and they allegedly made no efforts to secure loans through those financial institutions.

Losses to the 100 known victims to date exceed $200,000.

The case is being prosecuted by the Orange County District Attorney’s Office.

Read the original article in OC Weekly Blogs.

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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