SAN DIEGO — A San Diego man was sentenced Monday to eight months in prison for his role in a loan-modification scheme that employed as many as 30 telemarketers to sell bogus legal services to hundreds of struggling homeowners.
Charles Rose, 32, and his co-conspirators falsely claimed that their company’s legal staff had never lost a client’s house to foreclosure and asserted that no customer had ever asked for a refund, despite the outfit’s supposed “100 percent money-back guarantee,” according to prosecutors.
In reality, the purported law firm had just one figurehead attorney and performed no legal services for the clients Rose swindled, court documents state.
Staffers reported to Rose and followed his example to make sales and recruit customers by allegedly spinning a series of lies designed to lure them into paying $3,500 fees to Haffar & Associates.
Using scripts, form letters and his own recorded sales calls, Rose taught his fellow telemarketers how to get desperate homeowners to pay the exorbitant costs by making a variety of false statements, including boasts of a 98-percent success rate, a clean record with the California State Bar, special access with “just about every lender” and specialized staff and lawyers who conducted audits of the clients’ loan documents.
In fact, as Rose and attorney Mohamed Haffar of San Diego have admitted in court, Haffar & Associates did not have anything close to the touted success rate, had no special connections with banks and did not successfully complete loan modifications.
In addition, many of their dissatisfied customers never received the refunds they requested.
After Haffar & Associates stopped doing new business, Rose and San Diego resident Michael Nazarinia started another company called “REST Report Matters,” charging even more money for a product they claimed would facilitate the review of applications for loan modifications. Rose admitted that he made false representations to potential clients in order to induce them to sign up and pay their fees.
Rose also was charged with tax offenses for failing to report over $120,000 in income from Haffar & Associates to the Internal Revenue Service.
Three co-defendants also were convicted on federal charges in the case. In addition to stipulating to his disbarment, Haffar, 36, pleaded guilty in August 2014 to tax charges related to the venture and was sentenced to three months in custody.
Nazarinia, 41, pleaded guilty in November to mail fraud and tax offenses, admitting that he generated a fraudulent lease agreement in order to deceive a client’s mortgage holder and fraudulently delay eviction. He also conceded that he had filed false income tax returns and failed to pay more than $30,000 in taxes, and was sentenced to nine months in prison.
Another defendant in the case, 54-year-old Stacy Tuers of San Diego, pleaded guilty in May 2015 to tax charges and admitted that though he knew the firm’s telemarketers were making false statements to potential clients, he continued to sell Haffar & Associates loan-modification services.
“These individuals preyed on the vulnerability of some of our neediest citizens during their time of hardship and suffering,” U.S. Attorney Laura Duffy said. “Our law enforcement partners will continue to root out these scams to punish people who enrich themselves by exploiting others.”