COURT SHUTS DOWN ONE OF NEW YORK’S LARGEST MORTGAGE SCAM OPERATIONS
VICTIMS OBTAIN INJUNCTION AND ASSET FREEZE PENDING TRIAL
NEW YORK, NY – August 16, 2011 – (RealEstateRama) — This morning, Justice John M. Galasso of the Nassau County Supreme Court issued a sweeping order shutting down one of New York’s largest mortgage scam operations pending trial. The order is the most substantial victory to date in a year-long legal campaign against “loan modification scams” in New York and nationwide.
The court order ceases the operations of Homesafe America Inc. and its successor corporation, United Solutions Law Firm, which are alleged to have scammed more than a thousand low- and middle-income homeowners by falsely promising to help customers modify the terms of their mortgages. The order also prevents Homesafe’s two founders – Guy Samuel and Scott Schreiber – from engaging in mortgage-assistance relief services.
The case, Mook v. Homesafe America Inc., began on June 28, 2011, when a group of fifteen homeowners sued the companies and nearly two dozen employees for fraud, deceptive practices, false advertising, and various other claims. Among their demands, victims are seeking $1.5 million in punitive damages and an order permanently preventing all defendants from working in the mortgage assistance industry. The homeowners are being represented free of charge by the Lawyers’ Committee for Civil Rights Under Law and Davis Polk & Wardwell LLP.
Attorneys for the homeowners recently unearthed documents indicating that Samuel and Schreiber operated a string of companies that affected thousands of homeowners. On July 26, 2011, Justice Galasso ordered Defendants to turn over nearly 70,000 pages of customer files, which the Lawyers’ Committee and Davis Polk are currently reviewing to determine the breadth of the operation. These materials supplement documents discovered earlier this summer in which Samuel admitted to running an “illegal” operation that grossed more that $2 million in 2010.
“We are committed to fighting this scourge through lawsuits like this and through coordination with and assistance to federal, state and local law enforcement,” said Lawyers’ Committee Chief Counsel and Senior Deputy Director Jon Greenbaum.
Among other claims, Plaintiffs are alleging that the scam companies violated a New York statute known as the “Deceptive Practices Act,” which empowers injured consumers to operate as “private attorneys general”: under the Act, an individual victim may seek an injunction against an alleged scammer on behalf of all consumers. Using this forceful yet rarely used remedy, non-profit organizations like the Lawyers’ Committee, in partnership with the private bar, can step in and shut down scam operations when state and local enforcement agencies lack the resources to do so.
About the Project
These lawsuits are part of a broad anti-scam coalition, called the Loan Modification Scam Prevention Network(“LMSPN”). LMSPN also includes representatives from key governmental agencies, such as the Federal Trade Commission, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Justice, the U.S. Department of the Treasury, the Federal Bureau of Investigation, and the offices of numerous state Attorneys General. Since the launch of the LMSPN database in February 2010, more than 15,000 homeowners have reported scams or potential scams, totaling over $35 million lost. Over 800 of those complaints come from New York State residents, with reported losses of over $3 million.
In addition to Mook v. Homesafe, the Lawyers’ Committee and Davis Polk have filed two other major lawsuits in New York, both against a network of companies operating in Nassau County, New York under the names “Express Home Solutions” (EHS), “Save My Home,” and “Home Preserve Law Group.” On June 28, 2011, plaintiffs obtained a temporary restraining order against the companies and various owners and employees and are currently awaiting trial.
Homeowners who believe they have been the victim of a scam are encouraged to call either 311 in New York City or 888-995-HOPE (4673) or visit www.preventloanscams.org and click the link “Report a Scam!” Those who have a complaint against the entities named in the Homesafe and EHS cases should emailscam.intake (at) davispolk (dot) com.
The Lawyers’ Committee and Davis Polk are representing victims free of charge.
# # #
The Lawyers’ Committee for Civil Rights Under Law, a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination. The principal mission of the Lawyers’ Committee is to secure, through the rule of law, equal justice under law.
For over 160 years, the lawyers of Davis Polk & Wardwell LLP have advised industry-leading companies and global financial institutions on their most challenging legal and business matters. The firm also has a long and distinguished history of providing pro bono legal services to those who could not otherwise obtain legal representation and views pro bono work as a central responsibility of the firm at its lawyers. For more information: http://www.davispolk.com/pro-bono.
Office of Communications
ddupont (at) lawyerscommittee (dot) org
Public Relations Office
katie.harter (at) davispolk (dot) com
- LMSPN Files Lawsuit against “Elaborate Network” of NY Scam Companies
NEW YORK, NY - March 9, 2011 - (RealEstateRama) -- The Lawyers' Committee for Civil Rights Under Law (Lawyers' Committee) and pro bono counsel Davis Polk & Wardwell LLP (Davis Polk) filed a lawsuit today on behalf of local homeowners who were scammed by for-profit loan modification companies. Today's complaint - which targets a wide-ranging conspiracy to defraud vulnerable...
- Cuomo Announces Lawsuit Against “Amerimod” Loan Modification Company To Protect Distressed Homeowners Facing Foreclosure
NEW YORK, NY - August 13, 2009 - (RealEstateRama) -- Attorney General Andrew M. Cuomo today announced that his office has filed a lawsuit against New York-based American Modification Agency, Inc. (“Amerimod”), one of the largest foreclosure rescue companies in the country, and its owner Salvatore Pane, Jr. for engaging in a wide variety of deceptive business practices and false...
- HOMEOWNERS STRIKE BACK AGAINST TWO OF NEW YORK’S LARGEST MORTGAGE SCAMMERS
NEW YORK, NY - July 7, 2011 - (RealEstateRama) -- Two justices of the New York State Supreme Court have issued sweeping orders to restrain the activities of alleged “loan modification” scammers, providing major victories for financially vulnerable homeowners. On July 5, 2011, Justice Thomas A. Adams of the Nassau County Supreme Court extended a temporary restraining order that...
- DHCR Helps Warn Homeowners to Beware of Loan Modification Scams
Albany, NY - March 2, 2010 - (RealEstateRama) -- DHCR participated recently in the Consumer Protection Board's (CPB) Annual Consumer Action Day at the Empire State Plaza in Albany....
- Cuomo Announces Intent To Sue ‘Amerimod’ Loan Modification Company In Investigation Of Foreclosure Rescue Scams Targeting Homeowners Nationwide
NEW YORK, NY - June 9, 2009 - (RealEstateRama) — Attorney General Andrew M. Cuomo today announced his office is taking legal action against a leading New York foreclosure rescue company for charging illegal up-front fees and engaging in consumer fraud....
- At Gillibrand & Schumer’s Urging, Feds Lift Restrictions for Hundreds of Sandy Homeowners Currently Disqualified for Disaster Aid
- New York Real Estate Executive Robert White, Jr., CRE, Receives Prestigious Award from Industry Group
- NY’s Urban Post Disaster Housing Prototype Named MBI’s November Building of the Month
- New housing and services lift veterans in the Bronx
- NYU CUSP UNVEILS FIRST-OF-ITS-KIND ‘URBAN OBSERVATORY’ in DOWNTOWN BROOKLYN
- New York and Ohio to Use Uniform Mortgage Test; 43 State Agencies Now Using the Test
- NYCOM Conference, Ribbon Cuttings and Equity Fund Forum Highlight Trip to Finger Lakes Region
- CKX Declares December 31st Record Date for Dividend of FX Real Estate and Entertainment Shares
- Jones Lang LaSalle Hires Seasoned Industrial Real Estate Professionals to Strengthen Client Services in Long Island
- First Affordable Housing Development in Brooklyn with Solar Panels
- “Green” Forum Highlights 545 Madison Avenue as Showcase of Sustainability
- New York State Senate Confirms Bill Myers to the Board of the State of New York Mortgage Agency
- New York State home sales continue to post gains compared to 2009
- Gillibrand Introduces Solar Energy Legislation
- HDC Board Approves $55.5 Million in Tax-Exempt Multi-family Housing Revenue Bonds
- Diversity Works’ Unique Model Combines Permanent Supportive Housing and Family Preservation Services