PROVIDENCE, R.I. (CN) - A Long Island attorney runs a "Legal Network" under many names that hurts people through a nationwide "fraudulent loan modification scheme," Rhode Island claims in court.
Rhode Island sued these defendants in Superior Court: R.M.A. Legal Network aka R.A. Legal Group aka Alarcon Law Group aka Professional Legal Network, Bruce A. Thomas, Robert Michael Alarcon and Rory Alarcon.
Rory Alarcon, a New York attorney, runs the "network" of companies, most recently out of Holbrook, Long Island, according to the complaint. The other defendants are his agents or employees.
The complaint states: "The Rhode Island Attorney General's Consumer Protection Unit has received at least twenty-one (21) complaints from consumers and/ or names of customers provided by defendant Rory Alarcon through the Civil Investigative demand process who have been defrauded out of thousands of dollars by defendants, whose risk of foreclosure has increased, and/or have been notified that the foreclosure process has begun, all as a result of fraudulent loan modification schemes executed by defendants.
"Defendant RMA is a fraudulent loan modification company that has operated under a number of different names throughout the United States. RMA attracts homeowners struggling to meet their mortgage payments through false marketing and promises, representing themselves as legal specialists who can save their homes by negotiating substantial reductions in monthly mortgage payments. In reality, they are merely profiteers engaged in a scheme designed to deceive and manipulate low-to middle-income homeowners already desperate for financial relief.
"Defendants have engaged in a pattern of deceptive behavior. RMA employs loan modification salespeople who make false, misleading, and deceptive representations designed to gain the homeowner's trust, including promises that the company (either one of the defendants or their agents) is qualified to obtain loan modifications, has a significant record of success in the industry, and will be able to substantially reduce the homeowner's monthly mortgage payments. In some instances, defendants represent that such a payment may be obtained by and through defendants' close professional relationship with the homeowner's specific lender.
"Defendants hold themselves out to the general public as a 'legal network' that has 'successfully worked with lenders across the country ...' to provide 'loss mitigation services.'
"In exchange for their loan modification services, defendants require an upfront fee of several thousand dollars. ...
"Despite soliciting and accepting exorbitant advance fees, Defendants provide little or no substantial assistance to customers. In addition to failing to provide the promised loan modification results, defendants failed to provide the level of purported legal services promised. In most cases, these purported legal experts failed to negotiate with complainants' lenders, or even review or prepare their loan modification applications.
"By purporting to offer services as a 'law firm,' defendants misled homeowners into believing that an attorney, with unique expertise and legal knowledge, would personally work on each application and shield the homeowner-applicant from the uncertainties and delays typical of the loan modification process."
But among other problems, the state says, the defendants are not licensed to practice law in Rhode Island, though they have "knowingly, willfully, intentionally and fraudulently held themselves out to the public in Rhode Island as licensed attorneys."
As is common in such scams, the defendants order their suckers to stop communicating with their lenders, the state says: "Complainants were told not to communicate with their lenders, and advised that direct communications with their lenders would hurt their chances of successfully modifying their mortgages. Defendants thereby lured complainants with a deceptive sales pitch, and kept them misinformed and unaware of both the true nature of defendants' practices and of the consumers' own legal rights. ...
"Despite defendants' guarantees that loan modifications would be forthcoming, most, if not all, of the complainants who have filed a written complaint with the Attorney
General's Consumer Protection Unit have not received a loan modification as a result of defendants' efforts.
"Despite defendants' guarantees that they would submit copies of complainants' financial and personal paperwork to their respective lenders, several consumer complainants were dismayed to learn that no such paperwork had ever been submitted on their behalf.
"Despite defendants' guarantees that they would negotiate the terms of complainants' monthly mortgage payments, several complainants discovered long after they had paid the required upfront fee that defendants had never made any contact with their lenders, aside from an initial third-party authorization.
"Moreover, when the consumer complainants have reported to defendants that their deceptive practices led complainants' mortgages to be foreclosed upon or caused them serious financial harm, defendants have denied their oral representations and asserted that these payments were rightfully retained by defendants for services rendered to complainants.
"Numerous Rhode Island consumers have been deceived and defrauded by defendants' unlawful scam, spending thousands of dollars that could have been used toward making mortgage payments or negotiating with lenders. ...
"The conspiracy continues to the present.
"The violations of law alleged in this complaint occurred in the State of Rhode Island and elsewhere throughout the United States."
The defendants also operate out of Irvine, Calif., the state says.
RMA was charged with similar frauds in Kings County Supreme Court, New York, in December 2012, the state says,
It seeks disgorgement, restitution, actual damages, punitive damages for fraud, deceptive trade, state law violations, and costs of the investigation.
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