A federal court ruled in favor of the Federal Trade Commission Monday in a case against the operators of a scheme that deceived financially distressed homeowners by falsely promising to make their mortgages more affordable. The defendants also charged consumers illegal advance fees and unlawfully told consumers not to pay their mortgages to or communicate with their lenders.
The case was filed by the FTC in January 2018, and the court issued a temporary restraining order against the company then.
In granting the FTC’s motion for summary judgment, the court found that the defendants’ practices violated the FTC Act and the Mortgage Assistance Relief Services Rule.
Under the terms of the final order, the defendants will be banned from the debt relief business and will be banned from misleading consumers about the terms of other financial services they may offer, as well as from making misleading claims in advertisements.
The ruling also imposes an $18.5 million judgment against the defendants and requires the contents of their bank accounts be turned over to the FTC. Proceeds from selling the defendants assets will also go to the agency. Among the assets that will be liquidated are a Park City, Utah, ski chalet, an office building, a Mercedes Benz S550, and a Porsche Carerra.
Funds received as a result of the order may be used by the FTC to provide redress for consumers affected by the defendants’ scheme.
The defendants subject to the order are Preferred Law; Consumer Defense (Nevada); Consumer Defense (Utah); Consumer Link Inc.; American Home Loan Counselors; American Home Loans; Consumer Defense Group, formerly known as Modification Review Board; Brown Legal Inc.; AM Property Management; FMG Partners; Zinly; Jonathan P. Hanley; and Sandra X. Hanley.
