Prison for Head Telemarketer at Predatory “Law Firm”
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738, Valerie Chu (619) 546-6750
NEWS RELEASE SUMMARY – August 29, 2016
SAN DIEGO – San Diego telemarketer Charles Rose was sentenced today to eight months in custody for his role in a fraudulent loan modification scheme that employed as many as 30 telemarketers to sell bogus legal services to hundreds of struggling homeowners. In reality, this “law firm” had just one figurehead attorney, and did not perform any legal services for the 1,000 clients they swindled.
The telemarketers, who reported to Rose and followed his example to make sales, recruited new customers using a series of lies designed to lure them into paying a hefty $3,500 fee to the “law firm” of Haffar & Associates. Using scripts, form letters, and his own recorded sales calls, Rose taught his telemarketing staff how to use a variety of false statements to get desperate homeowners to pay the exorbitant fees. Among the lies used by Rose and his staff were claims of the firm’s “98% success rate,” clean record with the California State Bar, special access and success with “just about every lender,” and specialized staff and “lawyers” who would conduct a “forensic audit” of the clients’ loan documents.
Rose and his co-schemers falsely told victims that their attorneys had “never” lost a client’s home to foreclosure, and that although the firm had a “100% money back guarantee,” no customer had “ever asked for a refund.” In fact, as Rose and figurehead attorney Mohamed Haffar have both admitted, Haffar & Associates did not have anything close to a 98% success rate, did not have any special connections with banks or their legal departments, did not successfully complete loan modifications, and many of their dissatisfied customers never received the refunds they requested.
One of Rose’s co-schemers, Michael Nazarinia, did actually supervise the “case managers” who submitted some loan modification applications to banks. But in contrast to the representations made to clients, attorney Haffar did not directly supervise Nazarinia’s case managers – instead, they dealt with clients without any input or direction from Haffar. The schemers understood that Haffar’s fees were intended to compensate him for the risk he took in allowing Nazarinia and Rose to use his name, bar license, and law firm to execute the scheme.
After Haffar & Associates stopped doing new business, Rose and Nazarinia started a new 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.
In addition to his fraudulent loan modification scheme, Rose was also charged with tax offenses for failing to report over $120,000 in income from Haffar & Associates to the IRS.
United States Attorney Laura Duffy condemned the conduct in this case, noting that “these individuals preyed on the vulnerability of some of our neediest citizens during their time of hardship and suffering. Our law enforcement partners will continue to root out these scams to punish people who enrich themselves by exploiting others.”
“Charlie Rose aggressively pursued distressed mortgage holders, offering a false sense of hope while he enriched himself,” said Robert Wemyss, Postal Inspector in Charge of the Los Angeles Division. “When criminals use the mail to perpetrate fraud, postal inspectors, with the full cooperation of their law enforcement partners, will actively pursue them until they are brought to justice.”
Anthony J. Orlando, Acting Special Agent in Charge of IRS Criminal Investigation said, “Using the promise of a law firm to represent its clients, the defendants preyed on financially desperate homeowners struggling to keep a roof over their heads. As today’s sentence shows, those who brazenly enrich themselves on the backs of distressed homeowners will be held accountable for their crimes.”
“Charles Rose preyed on others’ misfortune to line his own pockets,” said Special Agent in Charge Leslie DeMarco of the Federal Housing Finance Agency – Office of Inspector General. “The sentence he received today provides justice and will hopefully act as a deterrent to anyone else who might be tempted to engage in similar conduct.”
Three co-defendants were also convicted on federal charges in the scheme. In addition to stipulating to his disbarment, attorney Mohamed Haffar pleaded guilty to tax charges relating to the venture in August 2014, and was later sentenced by U.S. District Judge Houston to three months. Michael Nazarinia pleaded guilty in November 2015 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. Nazarinia also admitted to filing false income tax returns and failing to pay more than $30,000 in taxes. Nazarinia was sentenced to nine months in prison, also by Judge Houston. And in May 2015, Stacy Tuers pleaded guilty on tax charges and admitted that he knew the telemarketers were making false statements to potential clients, but continued to sell Haffar & Associates loan modification services.
Charles Rose, 15CR1786-JAH Age: 32 San Diego, CA
Mail fraud, in violation of 18 U.S.C. § 1341
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary loss or gain, $100 special assessment, restitution.
Subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
DEFENDANTS PREVIOUSLY CHARGED:
Michael Nazarinia, 15CR2718-JAH Age: 41 San Diego, CA
Mohamed Haffar, 14CR2251-JAH Age: 36 San Diego, CA
Stacy Tuers, 15CR1342-JAH Age: 54 San Diego, CA
United States Postal Inspection Service
Internal Revenue Service – Criminal Investigation
Federal Housing Finance Agency – Office of Inspector General