Seven people were arrested on charges related to a mortgage fraud scheme that affected more than 1,550 Inland Empire homeowners seeking loan modifications in the aftermath of the recession, Attorney General Kamala D. Harris announced Wednesday.
The felony complaint alleges that Nehad “Nick” Ayyoub Ayyoub, 57, of San Bernardino, and six of his colleagues deceived homeowners by charging upfront payments for loan modification services and lying about the services they provided, according to a news release. Investigators said the suspects made $6.2 million in profit from the scheme.
Nehad Ayyoub is the president of The Firm Loans, Insurance and Investments Inc. and First Choice Debt Solutions Inc. The six colleagues named in the complaint are: Ghydan Ayyoub Rabadi, 38, of Los Angeles, Zaid Rabadi, 49, of Los Angeles, James Clemons, 55, of Riverside County, Wissam Ismail, 32, of Riverside County, Eddie Mercado, 57, of San Bernardino, and Majid Safaie, 60, of Orange County.
The suspects have been charged with 24 counts of felony grand theft, personal and corporate income tax evasion and conspiracy. They were booked Wednesday at Murrieta Detention Center, Orange County Jail, Rancho Cucamonga Jail and Azusa Police Department. Ayyoub is being held with bail set at $75,000, and all others are being held with bail set at $50,000. Ayyoub is facing a maximum of 12 years in prison; his colleagues are facing a maximum of 8 years.
Homeowners were falsely told that lawyers would negotiate their loan modifications, that they would get a loan modification with no risk of failure, and that they would get a refund if they were dissatisfied, investigators alleged in the complaint. The suspects also said they had special contacts with lenders, giving them an advantage in lowering monthly payments.
Homeowners were told to stop paying their mortgage and instead pay Ayyoub and his colleagues for loan modification services. Many homeowners ended up defaulting on their home loans without a modification, according to court filings.
These actions occurred from January 2007 to March 2010, according to court filings.
Investigators from the Attorney General’s Mortgage Fraud Strike Force and Franchise Tax Board opened the case in 2010. Business records were sealed until September 2012 when Safaie’s claim of attorney client privilege was overruled.
More information and a copy of the complaint can be found online.
Homeowners who have concerns can file an online complaint with the California Attorney General’s Office. The Homeowner Bill of Rights, which took effect Jan. 1, 2013, offers some protections for borrowers seeking loan modifications.
Business and real estate reporter Dominique Fong can be reached at (760) 778-4661, email@example.com and on Twitter @dominiquefong.