Riverside Man Found Guilty of Federal Charges Stemming from Bogus Debt-Elimination Services that Cost Victims $1.6 Million
LOS ANGELES – An Inland Empire man who operated a series of companies that purported to provide debt-relief, primarily to distressed homeowners, has been found guilty of defrauding victims who paid thousands of dollars after attending seminars that promoted a “Free and Clear” program pitched by the defendant and his salespeople.
James Ignatius Diamond, who went by the name “Jim Diamond,” 69, of Riverside, was found guilty of 30 fraud charges late Wednesday in United States District Court.
“Between 2010 and 2013, [Diamond] sold fraudulent debt-elimination services to desperate victims thrown into financial crisis by the Great Recession,” according to court documents. Diamond owned and operated a number of businesses – including the Riverside-based Transmitting Assets, Inc., Operation Safe Haven, Buyer Beware, and Unlimited Logistics Corporation – that he claimed could wipe out the debts of homeowners behind on their mortgage payments, as well as other debts.
The evidence presented to the federal jury over the course of six days showed that the “Diamond Home Reclamation Method” was pitched to solicit victims with false promises that Diamond’s methods would entirely eliminate their mortgages and allow people to own their homes “free and clear.”
Relying on the false representations, victims paid substantial fees, including an upfront fee – typically $3,500, payable only in cash, money orders or cashier’s checks – periodic program fees, and inflated notary fees. After paying the upfront fee, victims were required to sign and notarize documents, which they were instructed to send to financial institutions and government agencies – documents prosecutors described in court documents as “fraudulent and nonsensical.”
When victims of the scheme in 2011 began receiving mortgage default notices and lost their homes, Diamond launched another debt-elimination scam called the “EFT Program,” under which Diamond claimed to be able to eliminate victims’ debt with “EFT” checks. This scam required victims to pay Diamond 13 percent of the debt that was to be eliminated.
Diamond knew that his methods did nothing to discharge debts. In fact, when FBI agents searched his business in 2013, they recovered hundreds of “rejection letters” from financial institutions indicating that documents submitted as part of the debt-elimination programs did nothing to help the victims. Diamond’s email accounts contained numerous complaints and refund requests from victims – all of which he ignored.
Investigators have identified more than 500 victims. The victims’ total losses exceeded $1.6 million. Diamond spent victims’ money on luxury hotels, jewelry, alcohol and living expenses.
After deliberating for about three hours, the jury convicted Diamond of 15 counts of mail fraud affecting a financial institution and 15 counts of wire fraud affecting a financial institution. Defendant was immediately remanded into custody upon conviction, with United States District Judge R. Gary Klausner citing defendant’s extremist anti-government views as a concern. As a result of the conviction, Diamond will face a statutory maximum sentence of 30 years for each of the 30 counts.
Diamond is scheduled to be sentenced by Judge Klausner on September 9.
Previously in this case, a Diamond associate – Tricia Mae Gruber, 43, of Riverside – pleaded guilty to conspiracy to commit mail fraud and admitted helping operate the scheme.
This case was investigated by the Federal Bureau of Investigation.
This matter is being prosecuted by Assistant United States Attorneys Marina A. Torres and Kevin B. Reidy of the General Crimes Section.