State Sues to Stop Foreclosure Scam

COLUMBUS, Ohio (CN) - The Ohio attorney general says a Florida-based outfit called the American Residential Law Group is bilking Ohioans in a foreclosure-relief scam. Despite its name, nothing in the state's complaint indicates that the two men who run the business are lawyers.

Ohio sued the Fort Lauderdale-based business and the two men who run it, Oscar Estevez and Joel Jacobi, both of Miami.

The attorney general says the men charge $1,395 to $3,350 for their purported services in "debt adjustment," but "often failed to perform the services listed in the contract."

The men "purport to offer help to consumers attempting to avoid foreclosure by working with the consumer's lender to modify the consumer's mortgage or adjust what the consumer owes."

Estevez and Jacobi claim their business "'employs professional negotiators with expertise in dealing with lending institutions regarding mortgages on residential/commercial real estate,'" the attorney general says, citing the Law Group's contract.

The contract promises that the "Law Group" will "perform a detailed market analysis of the subject property and the surrounding areas ... perform a loss liquidation analysis on the subject property," and "attempt to successfully negotiate" a mortgage modification, among other things.

In exchange, besides giving them money, the "'Client further agrees not to interfere, in any way, with negotiations between Company and Client's lenders.'"

But after they get the money, the defendants "often failed to perform the services listed in the contract," and "often failed to communicate with consumers, and did not return consumers' phone calls or e-mails," the state says.

The complaint continues: "When defendants failed to perform the services listed in the contract, they did not provide refunds to the consumer.

"When the defendants did provide their services, the services were often of little or no value to the consumer, and the consumer often remained in foreclosure."

Nothing in the complaint refers to attorneys, but the state does not allege unauthorized practice of law.

Ohio seeks an injunction, restitution, and fines of $25,000 for each violation of consumer law and the Debt Adjusters Act, and costs.

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