Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—C.D. Cal.: Preliminary injunction halts mortgage relief operation, (Apr 30, 2015)
Organizations Mentioned:C.C. Enterprises, Inc. | D.N. Marketing, Inc. | Federal Trade Commission
By Linda O’Brien, J.D., LL.M.
The federal district court in Santa Ana, California has entered a stipulated preliminary injunction order prohibiting a mortgage relief operation from contacting financially-distressed homeowners under the guise of helping to get their mortgages modified. The order also imposed an asset freeze (FTC v. Lake, April 29, 2015, Boone, S.).
The FTC filed a complaint against Denny Lake, Chad Caldaronello, Derek Nelson, Brian Pacios, and Justin Moreira, sometimes doing business as HOPE Services or HAMP Services, alleging that the defendants targeted consumers facing foreclosure and especially those who failed to obtain relief from their lenders. Giving the appearance of being a nonprofit with government affiliation, the defendants sent mail bearing what looked like an official government seal, and indicated that the recipients might be eligible for a new home affordable modification program.
The FTC alleged that consumers were falsely told that they were approved for monthly payments significantly lower than their current payment and that, after making three monthly trial payments, they would get a loan modification and not face foreclosure. Instead, homeowners who made the payments did not have their mortgages modified, and their lenders never received their trial payments. The FTC sought to enjoin the defendants’ operation. On April 16, the court issued an ex partetemporary restraining order, with an asset freeze, and appointed a receiver.
In the stipulated preliminary injunction order, the defendants were prohibited from advertising, marketing, promoting, or offering for sale any mortgage assistance relief services and from misrepresenting that they could obtain mortgage loan modifications or consumers. The defendants also were ordered to disable any Internet website used by them for the advertisement and marketing of mortgage assistance relief services, suspend the domain name registrations of those websites, and to preserve any electronically stormed information. Further, the defendants are enjoined from using, selling, leasing, or disclosing customer information obtained in connection with their marketing operation.
Finally, the defendants were enjoined from directly or indirectly (1) transferring, liquidating, converting, concealing, assigning, or encumbering any accounts; (2) opening any safe deposit boxes titled in their name; (3) incurring credit card charges; (4) obtaining personal loans; or (4) incurring liens on real property in relation to assets identified in the asset freeze.
The case is No. 8:15-cv-00585-CJC-JPR.
Attorneys: Jonathan Cohen and Miriam Lederer for the Federal Trade Commission. Denny Lake, Chad Caldaronello, Derek Nelson, Brian Pacios, and Justin Moreira, pro se.
Companies: C.C. Enterprises, Inc.; D.N. Marketing, Inc.
Cases: ConsumerProtection CaliforniaNews FederalTradeCommissionNews