National foreclosure rescue scheme permanently enjoined
The United States Attorney for the District of Colorado, John F. Walsh, and the Colorado Attorney General, John W. Suthers, announce the end of a national foreclosure rescue scheme. The perpetrators, operating through Bella Homes LLC, had promised hundreds of distressed homeowners that Bella Homes would help homeowners avoid foreclosure. Instead of helping homeowners, the perpetrators helped themselves to a lavish lifestyle replete with fancy cars, vacations, and even gold coins.
“Today brings an end to a scheme that harmed distressed homeowners across the country,” announced United States Attorney, John F. Walsh. “With false promises, the perpetrators of this scheme convinced hundreds of homeowners to hand over the last of their life savings and turn over the deed to their homes. Together with our partners in the State Attorney General’s Office, we stopped this fraud from harming additional victims within our State, and across the nation.”
“This agreement not only will help Bella Homes’ victims, but it also will bar the defendants from engaging in any kind of mortgage or foreclosure activity ever again,” Suthers said. “Foreclosure-rescue scams prey on distressed homeowners’ desire to save their homes and to find any means to help fix their dire financial situations. Our work in cooperation with the U.S. Attorney’s Office quickly shut down this scam and should send a message that we and our partners in law enforcement will vigorously pursue any foreclosure or mortgage scam preying on Colorado homeowners.”
The Civil Action, brought jointly by the United States Attorney’s Office for the District of Colorado and the State Attorney General of Colorado, put an end to a scheme that started in March 2010, in the basement of a convicted felon in Georgia, and went national, affecting homeowners in Colorado, and other states all across the country. The Civil Action that put an end to the scheme was filed in the United States District Court for the District of Colorado on February 14, 2012, and resulted in a Consent Judgment, in which Bella Homes “admits the allegations in the Complaint and acknowledges its role in defrauding homeowners who signed over title to their homes to Bella Homes.” Bella Homes further admitted that all deed transactions in which it entered should be deemed void.
As alleged in the Complaint, the Defendants, through Bella Homes, engaged in a fraudulent scheme in which they solicited homeowners to convey title to their homes to Bella Homes for no consideration and to enter into purported lease agreements under which the homeowners, instead of making their mortgage payments, paid Bella Homes monthly “rent.”
To entice homeowners into this arrangement, Defendants made or caused to be made numerous material misrepresentations to homeowners to convey the false and fraudulent impression that:
Bella Homes would stop any foreclosure on the home;
Bella Homes would purchase or otherwise settle the existing mortgage on the home from the lender;
Federal law provided the homeowner the right to remain in the home for the duration of the lease with Bella Homes; and,
The homeowner would have an option to repurchase the home in three years from Bella Homes for significantly less than the amount currently owed on the mortgage.
Defendants made these false representations on a website and in solicitations and documents sent to interested homeowners across the country. Contrary to Bella Homes’ representations and promises, Bella Homes admitted in response to a subpoena that it had not purchased any mortgages as of October 2011, and that it lacked the financial capacity to purchase mortgages. In all, more than 560 homeowners were victimized by Bella Homes. Throughout the life of the scheme, the company only acquired one mortgage just before the Complaint was filed. As part of the Consent Judgment, the single mortgage may be sold and the proceeds returned to victims.
Who was involved, and what they did:
The Complaint alleged that Mark Stephen Diamond, Daniel David Delpiano, David Delpiano and Michael Terrell were involved in running Bella Homes. Through the Consent Judgment, these individual Defendants confess liability to Counts Six and Seven of the Complaint, which allege violations of the Mortgage Assistance Relief Services Rule (MARS Rule). Specifically, the individual Defendants confess liability to:
violating Section 322.3(c) of the MARS Rule by making a representation, expressly or by implication, about the benefits, performance, or efficacy of any mortgage assistance relief service without competent and reliable evidence that substantiates that the representation is true.
violating Section 322.5(a) of the MARS Rule, which makes it a violation of the MARS Rule to: Request or receive payment of any fee or other consideration until the consumer has executed a written agreement between the consumer and the consumer's dwelling loan holder or servicer incorporating the offer of mortgage assistance relief the provider obtained from the consumer's dwelling loan holder or servicer.
What Happens Now:
As part of the Consent Judgment, the Defendants have permanent restrictions on their ability to work in the mortgage industry and residential real estate related businesses. In addition, the Defendants must return any vehicles in their possession that were leased by Bella Homes, Mark Diamond, Diamond and Associates, or Diamond Corporation. Finally, money previously frozen in Defendants’ bank accounts, as well as cash in a safe deposit box, and the proceeds of gold coins obtained by Bella Homes, will all be made available to the Department of Law at the State of Colorado to be returned to homeowner victims. To this amount, Defendant Mark Stephen Diamond will add an additional $300,000 within the next 90 days. After that time, the Defendants will make additional payments of approximately $200,000 over the next five years, for a total anticipated recovery of approximately $1.2 million.
If you are a victim of Bella Homes, visit the website set up by the Colorado Department of Law.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit: http://www.stopfraud.gov.
DateMarch 21st, 2012