Paul Horton: Loan Modification Scam

Maybe they thought they were going to get away with it; maybe their judgment was only as good as their foresight; or maybe the six individuals indicted for fraud and money laundering, among other charges, had their eyeballs replaced with dollar signs, like in cartoons. Whatever the reasoning, money was the motive, but now the five Utahns and the one Californian face up to 30 years in prison for their actions, and no attorney in Salt Lake City can save them from their own mistakes.

Not even the best attorney in Salt Lake City could save these scammers from themselves

It’s possible the cadre saw the housing market crash of 2008 as a business opportunity, but there is no way they didn’t understand that their actions turned opportunistic and even illegal when they devised “a scheme to market and sell home loan modification services to distressed homeowners trying to save their homes from foreclosure.” Also—to the presumed dismay of nearly every attorney in Salt Lake City—they pretended to be a law firm, too. I think it’s fair to say that all Utah Lawyers will tell you – it’s never a good idea to say you’re a law firm when you aren’t a lawyer.

Their “mortgage law offices” were searched nearly three years ago, and now the conspirators behind the CC Brown operation are feeling the full force of the blow of the federal indictment. All 40-counts of it. The U.S. Attorney’s office is less than pleased about CC Brown’s actions during the market crisis, with its claims that the group is responsible for the “deplorable act” of “taking advantage of desperate homeowners” to the tune of nearly $33 million in losses. That’s quite a bit a money for small band of white collar criminals to rack up in less than five years. But gleaning money from “more than 10,000 victims in nearly every state in the country” is no small time operation.

A savvy real estate attorney in Salt Lake City could explain how they did it, but the gist of the scam was that the group would sell home modification loans to customers with looming defaults and sit back with their heels up, watching ruthlessly while “customers lost their homes to foreclosure while still waiting for word on the loan modification from CC Brown.”

And maybe the defendants felt themselves to be so distant from their crime they rationalized it away as simple business strategy. As a white collar criminal defense attorney in Salt Lake City might know, in several psychological accounts of white collar criminal motive analyses, this can be the case: handling phone calls, faxes, emails, and money that appears only as numbers on a screen can be more easily justified as “not wrong” in the human psyche than physically harming another human being with our own hands, but the U.S. Attorney’s Office won’t let these guys off that easy.

These guys did bad things, including “raise false hopes with phony promises of legal representation, take advantage of struggling homeowners willing to do almost anything to save their homes,” and then pocket the funds that flowed from their desperation is nothing short of despicable, according to Mary Rook, the special agent in charge of the FBI’s Salt Lake Office in a prepared statement. So think twice before money laundering sounds simpler and more profitable than doing laundry.

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