California Real Estate Fraud Report

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AG Kamala Harris Arrests 3 Attorneys for Loan Modification Fraud

The real estate and mortgage crisis has been the breeding ground of many frauds: loan modification fraud, short sale fraud, REO fraud and ongoing mortgage fraud.

Prosecutions for loan modification fraud is usually recognized as the demanding of advance fees for the purveyor to act as an intermediary to negotiate a loan modification for a homeowner in foreclosure. Illegal since 2009, both former Attorney General and now Governor  Jerry Brown and current Attorney General Kamala D. Harris have been busy arresting and prosecuting firms and individuals for that crime.

Today was special in that now the prosecutions are including attorneys who either “rented” their licenses to others to operate loan modification businesses or set up shop themselves and failed to perform the promised services.

Arrested and charged with 19 felony counts were Gregory Flahive of El Dorado Hills, 39, Cynthia Flahive of Folsom, 41, and Mike Johnson of Elk Grove, 42. The Flahives are divorced from each other but were owners of Flahive Law Corporation; Johnson was the managing attorney for their firm, which advertised via flyers radio and televised infomercials

According to AG Harris: “Homeowners facing foreclosure are being targeted by predators, including those who use their law license to gain credibility and scam innocent Californians. My office’s Mortgage Fraud Strike Force is dedicated full-time to cracking down on these deceptive practices and protecting homeowners from fraud like this.”

Read the California Attorney General’s press release for more information.

© Copyright 2007-2018 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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