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Attorney General Files Consumer Fraud Lawsuit

Sedona AZ (April 23, 2012)The State of Arizona Attorney General Tom Horne filed a lawsuit against Mortgage Relief Group, d.b.a. Mortgage Assistance Group and its owner, Stan Allotey, alleging that the Defendants engaged in deceptive loan modification services.

The lawsuit alleges that since at least February of 2008, the company deceived consumers into paying fees, ranging from $995 to $3,245 for loan modification services by misrepresenting their ability to help consumers obtain mortgage relief and save their homes, thereby violating the Arizona Consumer Fraud Act.

The Defendants are also accused of using deceptive means to lure financially distressed homeowners into paying up-front fees with promises that the company would prevent foreclosure and save consumers homes by negotiating modifications of mortgage loans. Also, the company allegedly continued to charge or collect up-front fees even after the enactment of the Arizona Foreclosure Consultant Regulation Law ban on charging or collecting such fees.

Once homeowners paid the upfront fees, the Defendants allegedly often failed 1) to perform their part of the contract, 2) keep homeowners informed of the status of their application for a modification, 3) refund fees and 4) or otherwise earn their fee.

“Predatory loan modification scams are an unfortunate part of the housing crisis,” Attorney General Horne said. “Cases such as this show that every consumer needs to thoroughly research the companies with which they do business. And it is a reminder that nobody should ever agree to paying up-front fees for services of this kind.” 

scam fraud logoThe Complaint alleges that defendants violated the Arizona Consumer Fraud Act, the Arizona Telephone Solicitations Act, and the Arizona Foreclosure Consultant Regulation Law, and asks the Court to bar Defendants from conducting any further foreclosure consulting business, impose civil penalties against the Defendants of up to $10,000 for each violation, pay the State of Arizona its costs of investigation and prosecution, and provide refunds to consumers.

Assistant Attorney General Alyse Meislik in the Consumer Protection and Advocacy Division is handling the case.

The Attorney General recommends that homeowners who are in or facing foreclosure contact lenders or servicers or a government-approved housing counselor. The Arizona Foreclosure Help-Line, 1-877-448-1211, refers consumers to HUD-approved housing counseling agencies who provide loan modifications and other services at no cost.

If you feel you have been a victim of consumer fraud, please contact the Arizona Attorney General’s Office of Consumer Information & Complaints Unit at (602) 542-5763 / (520) 628-6504 / (800) 352-8431. You may also file a consumer complaint online at www.azag.gov/consumer/complaintform.html.

 

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1 Comment

  1. Attorney General Tom Horne says:

    A truck driver arrested in 2011 with approximately $170,000 in cash in a duffel bag tainted with narcotics has been convicted on charges of Illegally Conducting an Enterprise and Money Laundering, Attorney General Tom Horne announced today.

    “Every dollar spent on illegal drugs represents an assault on our community,” Horne said. “I applaud the DPS and the attorneys in this office for their continued hard work and vigilance to ensure that anyone transporting money that may have connection to the drug trade is brought to justice.”

    51 year-old Harold Stuart of Covington, Ga., was arrested by Department of Public Safety officers in August of 2011 during a traffic stop on I-17 in which Stuart, who was exhibiting nervous behavior and had irregularities in his log book, was found to be carrying the cash. The money was wrapped in yellow tape and stuffed in a duffel bag. Testing showed Stuart’s fingerprints to be on the tape and bag and a DPS canine detected the presence of narcotics. Stuart told a DPS officer that he did not know how the bag got in his truck, and he declined to make additional statements to police about the money.

    In the course of their investigation, police learned that between 2008 through 2009 Stuart reported income of only $14,379.00. A review of Stuart’s financial records revealed there were large deposits of money into his Maryland bank account while he was in Jamaica. During trial, evidence was presented regarding a financial background investigation on the defendant. The opinion of the investigating officer was that the defendant could not support his lifestyle nor could his income plausibly explain $170,000.00 in cash.

    Both offenses are class 3 felonies with a sentencing range of 2 to 3.5 years in prison. The judge has the discretion to sentence the defendant to probation or prison. Sentencing is scheduled for May 31, 2012.

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