Scam Alert: Feds accuse T-Mobile of ripping off customers in cramming scheme


scam-alert

In litigation aimed at fraudulent business practices within the mobile telephone industry, the Federal Trade Commission on Tuesday accused T-Mobile of making hundreds of millions of dollars by scamming customers with unauthorized text message charges, according to FTC Consumer Protection Director Jessica Rich.

The FTC is seeking a court order to permanently bar T-Mobile from “cramming,” or charging cellphone customers for spam text messages that they did not request or have an interest in receiving.

In a process known as “third-party billing,” carriers such as T-MobileAT&TSprint and Verizon typically place charges on a consumer’s bill for services provided by another company.   In return, the phone company receives a substantial percentage of the amount charged.

When the charges are placed on the bill without the consumer’s authorization, it is known as “cramming.”

T-Mobile — which brands itself as a low-cost alternative to top rivals AT&T and Verizon — received between 35 and 40 percent of the amount it charged customers for the bogus texts subscriptions, thus generating hundreds of millions of dollars in revenue, the FTC alleged.

“It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent,” FTC Chairwoman Edith Ramirez indicated in a prepared statement. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”

The Federal Communications Commission (FCC) is also launching an investigation into T-Mobile’s billing practices and has the power to level fines against the company if it determines that wrongdoing has occurred.

According to the complaint filed by the FTC, T-Mobile allegedly charged customers for spam texts — “such as flirting tips, horoscope information or celebrity gossip” — at a typical cost of $9.99 per month.  T-Mobile also ignored signs that the text messages were unwanted — such as a large number of customers seeking refunds — and made it difficult to discover and remove the charges.

“Rather than going after T-Mobile, the FTC should focus on the third-party companies that are sending the text messages,” argued T-Mobile CEO John Legere.

“As a single mother, I can hardly afford to pay additional and fraudulent fees,” T-Mobile customer Bina Fink Kohl of Weston told Examiner.  “As a T-Mobile customer, I expect them to be fair and honest in their dealings.  From the litigation, it appears that T-Mobile has been scamming me all along.”

According to T-Mobile, they have already made commitments to stop billing for unwanted spam text messages and issue refunds for unwanted text messages.

“T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates and we are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors,” stated Legere.

According to Jessica Rich of the FTC’s Bureau of Consumer Protection, the agency and T-Mobile have not been able to reach a settlement on the charges, resulting in the litigation filed Tuesday by the Federal Trade Commission.

“In court we will determine just how much” T-Mobile needs to refund its consumers, but “our evidence to date is that hundreds and millions of dollars are at stake,” Rich said.  “Our first priority is to get the money back to consumers.”

Rich called the charges against T-Mobile — the agency’s first cramming charges against a telecom company — “a new front in [the federal agency’s] longstanding campaign” against wireless cramming.

The T-Mobile case “sends a strong message to other mobile phone companies,” Rich concluded.  “We will continue to bring additional cases to deter this conduct.”

According to the Federal Trade Commission complaint, many of the allegations focus on T-Mobile billing practices, which “made it difficult for consumers to detect that they were being charged, much less by whom.”

Customers would have to scan through several screens online and up to 50 pages of a physical bill to find obscure and fraudulent accounting for the third-party charges, the FTC said.

Among the allegations were that prepaid customers – who do not receive monthly bills – would have the third-party charges deducted automatically.  Once customers discovered the charges and their source, T-Mobile would refuse to fully refund the charges, sometimes directing the customers to contact the third-parties.

“I’m alarmed that T-Mobile is accused of fraudulent billing practices,” Remington Longstreth told Examiner. “I never check my bill completely.  With that said, I don’t expect to be cheated either.”

The federal investigation and complaint against T-Mobile comes at no worse time as the company is reportedly in talks to be bought by Sprint.  This highly-anticipated deal would combine the country’s third- and fourth-largest wireless companies.

Legere concluded by calling the lawsuit against T-Mobile “sensationalized legal action” that is “unfounded and without merit.”

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As a nationally recognized credit repair and identity theft expert, Bill Lewis is principal of William E. Lewis Jr. & Associates, a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity.

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25 charged in identity theft and tax fraud scam


25 charged in identity theft and tax fraud scam
25 charged in identity theft and tax fraud scam

Identity theft and tax return identity theft charges were announced Thursday against 25 defendants in 19 separate cases, according to United States Attorney for the Southern District of FloridaWifredo A. Ferrer.

Dealing with thousands of stolen identities and millions of dollars of fraudulent identity theft tax filings, the charges filed reaffirmed the joint federal and local commitment to crack-down on stolen identity tax refund fraud (SIRF) perpetrators.

Florida – according to the Federal Trade Commission – had the highest rate of identity theft in the nation last year.  It had a rate of 192.9 complaints per 100,000 residents – the highest in the United States .

While identity theft in Florida ranks highest in the United States, the identity theft rate in Miami has reached near epidemic proportions –  with a rate of 340.4 complaints per 100,000 residents.

In an attempt to combat the rising wave of stolen identity tax refund scams and armed with recent directives from the Department of Justice’s Tax Division making prosecutions faster and easier, the U.S. Attorney’s Office for the Southern District of Florida established the South Florida Identity Theft Tax Fraud Strike Force (Strike Force) in August 2012.

The members of the Strike Force include the United States Attorney’s Office, Internal Revenue Service, Criminal Investigation, Miami Field Office, Federal Bureau of Investigation, Miami Field Office, U.S. Secret Service, U.S. Postal Inspection Service, Miami Division, Social Security Administration, Office of Inspector General, Aventura Police Department, North Miami Beach Police Department, Miami-Dade Police Department, Immigration and Customs Enforcement, Homeland Security Investigations, Miami Field Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, Town of Davie Police Department, Florida Highway Patrol, Lee County Sheriff’s Office, Broward Sheriff’s Office, Ft. Lauderdale Police Department, Coconut Creek Police Department, Sunrise Police Department, Coral Springs Police Department, Miramar Police Department and North Miami Police Department.

Since the inception of the Strike Force, 296 defendants – responsible for approximately $485.5 million in intended stolen identity refund fraud loss and in excess of $106 million in actual SIRF fraud loss – have been charged in federal court.

The U.S. Attorney’s Office and the IRS have also attacked this problem by revoking “electronic filing identity numbers” or EFIN numbers, which allow individuals to file tax returns on behalf of others. Before revoking these EFIN numbers, SIRF fraudsters had used them to file 166,495 fraudulent tax refund claims over the past two years.

 “The number of stolen identities and the dollar amount of the tax fraud involved in these cases is staggering,” stated United States Attorney Wifredo A. Ferrer.  “These cases serve as a reminder that each and every one of us is a potential victim. While we have a talented and effective team dedicated to fight this fraud, we need everyone – both taxpayers and institutions – to remain vigilant in safeguarding personal identifying information. Protect it as if it were a trade secret.”

U.S. Attorney Ferrer – joined by members of the Strike Force on Thursday – announced the most recent results of their investigative efforts.  The cases include:

1.   United States v. Rhim-Grant, et al., Case No. 14-20181-Cr-Lenard. United States v. Nydia Tanay Laron Nelson, Case No. 14-2375-mj-Goodman

On March 21, 2014, Pamela Rhim-Grant, 40, and Eugene Moss, 33, both of Miami, were charged by information in a scheme to steal identities for the purpose of conducting stolen identity fraud.

On April 1, 2014, Nydia Tanay Laron Nelson, 30, of Miami, was charged by criminal complaint in connection with the same scheme.

According to the criminal complaint, the defendants conspired to steal the identities of Miami-Dade Public Schools students by exploiting Rhim-Grant’s access to the student information computer database as a food service manager at Horace Mann Middle School.  Over the course of more than a year approximately 400 student identities were stolen from across the Miami-Dade County Public Schools district, resulting in numerous fraudulent tax returns.

The information and complaint charge the defendants with conspiracy to commit computer fraud and aggravated identity theft.

Ferrer commended the investigative efforts of the FBI, IRS-CI, and the Miami-Dade Schools Police Department. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.

“Criminals all over South Florida are turning to computers to make an easy buck at the public’s expense,” said George L. Piro, Special Agent in Charge, FBI Miami. “Identity theft, the fastest growing crime here, is as easy as one, two, three. One, criminals steal someone’s name and social security number; two, they use that identity to file a fraudulent tax return on line; and three, they collect the refund check. Repeat thousands of times. Don’t become a victim, learn how you can protect your personal identifying information from these thieves at FBI.GOV or FTC.GOV.”

2.   United States v. Marlon Maikel Palacios, Case No. 14-20121-Cr-Cooke

On February 28, 2014, Marlon Maikel Palacios, 38, of North Miami, was charged in a twelve count indictment for his participation in a conspiracy to defraud the government and mail theft.

According to the indictment, the defendant, a former mail carrier for the U.S. Postal Service, provided to his co-conspirators addresses on his mail routes used with filing false tax returns with the IRS, receiving IRS correspondence, and tax refund checks. The defendant would then identify and pull the IRS correspondence and refund checks, for which the defendant would be paid. With the IRS correspondence, the defendant’s co-conspirators would file false, fictitious, and fraudulent federal income tax returns and thereafter claim refunds to which they were not entitled from the IRS.

The indictment charges the defendant with conspiracy to defraud the government with respect to federal income tax refunds and theft of mail by a postal employee.

Ferrer commended the investigative efforts of the USPS-OIG, USPIS, ICE-HSI, and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Andy R. Camacho.

“U.S. Postal Service employees are honest, hardworking, and trustworthy, but when a Postal Service employee engages in criminal activity, our Special Agents will investigate those matters vigorously, as we did in this case,” says Max Eamiguel, Special Agent in Charge, U.S. Postal Service, Office of Inspector General.

3.   United States v. Rodelyn Lamour and Nestor Armando Herrera, Case No. 14-20169-Cr-Martinez

On March 14, 2014, Rodelyn Lamour, 26, and Nestor Armando Ficquire Herrera, 22, of Miami, were charged in a seven count indictment for their participation in a conspiracy to steal mail and a stolen identity tax refund scheme.

According to the indictment, the defendants used a stolen postal service key to open various apartment complex mailboxes and steal mail containing debit cards. The debit cards contained refunds from fraudulent federal income tax returns filed using stolen identities. The defendants then used the stolen debit cards to obtain cash, without the knowledge or authorization of the identity theft victims. The intended loss to the IRS was approximately $39,000.

The indictment charges the defendants with conspiracy, theft of mail, use of a postal service key, unauthorized use of personal identification information, and aggravated identity theft.

Ferrer commended the investigative efforts of USPIS. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.

Ronald Verrochio, Inspector in Charge for Postal Inspection Service stated, “Tax return fraud directly affects millions of Americans each year and indirectly affects every tax payer throughout the country, we are committed to working with our law enforcement partners to combat this problem.”

4.   United States v. Paul Evans Auguste, Case No. 14-80087-Cr-Scola

On February 12, 2014, Paul Evans Auguste, 30, of Miami, was charged in a seven-count indictment for his participation in a stolen identity tax refund scheme.

According to the criminal complaint, Auguste sold approximately 260 stolen identities to an undercover law enforcement officer and stated that he could provide the undercover law enforcement officer any types of identities he would want, including those of children and the elderly.  Auguste also stated his intention to conduct tax fraud with the multitude of stolen identities he maintained at his residence. Law enforcement obtained a federal search warrant for Auguste’s residence which revealed an additional 1,200 stolen identities in his possession.

The defendant was charged with access device fraud and aggravated identity theft.

Ferrer commended the investigative efforts of ICE-HSI and IRS-CI.  The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.

5.   United States v. Freddie Howard, Case No. 14-60068-Cr-Rosenbaum

On April 1, 2014, Freddie Howard, 56, of Davie, was charged in a one-count information in a stolen identity refund fraud scheme that involved the submission of approximately $22 million in fraudulent refund claims.

According to the information, Howard operated a tax preparation business called QTS1, Inc. (Quality Tax Service) in Broward County. Howard prepared false and fraudulent tax returns using the identity information of willing participants and stolen identity information. Howard used false and fictitious income and withholding tax information on the returns submitted to the IRS to justify fraudulent large-dollar refund requests. The requested refund amounts generally ranged from $60,000 to $1,400,000, and Howard typically requested payment of these refunds via U.S. Treasury tax refund check. To conceal his identity, Howard submitted the tax returns to the IRS by mail and did not include preparer information. Howard also blocked out the tax preparer software information, and used other people to contact the IRS to inquire about the status of the fraudulent returns.

According to the information, Freddie Howard submitted over $22 million in false and fraudulent tax refund claims to the IRS. The IRS paid approximately $4.5 million on these refund requests.

The defendant was charged with access device fraud and identity theft.

Ferrer commended the investigative efforts of the Strike Force, with special commendation to the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

IRS Special Agent in Charge José A. Gonzalez stated, “Today’s announcement should send a message to those who might consider disguising themselves as legitimate tax return preparers or Electronic Filing Identification Number (EFIN) holders for the purpose of submitting false claims with the IRS. Protecting the integrity of our U.S. tax system is essential, therefore, those who chose to corrupt this system will be investigated and brought to justice, regardless of their level of participation in the fraud.”

6.   United States v. Anthony A. PaceJr., et al., Case No. 14-20101-Cr-Moore/Torres

On February 18, 2014, Anthony A. PaceJr., 29, Brandon A. Terry, 29, Derel L. Henry, 39, and Rosa Johnson, 26, all of Miami, were charged in a twenty-three count indictment for their participation in a $3.3 million stolen identity tax refund scheme.

According to the indictment, the defendants obtained personal identifying information, including names, dates of birth and Social Security numbers, of hundreds of identity theft victims, for use in this identity theft tax fraud scheme. The defendants used this stolen personal identity information, including personal identity information of former and current inmates of the Miami-Dade Corrections and Rehabilitation Program, to file false and fraudulent federal income tax returns without their victims’ knowledge and authorization. Based on Internet Protocal data and a unique tax filing number issued by the IRS called an EFIN, each of the defendants filed false and fraudulent tax returns using stolen identities and directed the IRS to deposit the funds into bank accounts and onto debit cards accessible to the members of the scheme.

According to disclosures at bond hearings, Anthony A. Pace, Jr. was employed as a correctional officer with the Miami-Dade Corrections and Rehabilitation Program. False and fraudulent tax returns were filed in the names of former and current prisoners using an EFIN associated with defendant Pace. These same tax filings directed payment of the illicit tax refund proceeds into accounts controlled by Pace and Johnson. ATM video reveals that Pace was withdrawing funds from the accounts into which the illicit funds were deposited.

The indictment charges all of the defendants with conspiracy to make false claims, in violation of 18 U.S.C. ‘ 286 and aggravated identity theft, in violation of 18 U.S.C. ‘ 1028A, defendants Brandon Terry and Derel Henry with access device fraud, in violation of 18 U.S.C. ‘ 1029, and defendants Anthony Pace and Rosa Johnson with theft of government property, in violation of 18 U.S.C. ‘ 641.

Ferrer commended the investigative efforts of IRS-CI, FBI and USSS. The case is being prosecuted by Assistant U.S. Attorney Peter A. Forand.

7.   United States v. Judes Stanley Celestin, Case No. 13-60243-Cr-Scola

On September 27, 2013, Judes Stanely Celestin, 36, of Hallandale Beach, was charged in a sixteen-count indictment in a stolen identity refund fraud scheme that resulted in the submission of approximately $1 million in fraudulent refund claims.

According to the indictment, Celestin set up Florida corporations (JC Easy Tax and Taxes on Time) with himself as the president and then opened up bank accounts at numerous different banks from 2010 through 2012 in the name of these corporations. Celestin subsequently caused false and fraudulent tax returns to be filed with the IRS in the names of individuals without these individuals’ knowledge or authority. In total, Celestin caused approximately $1 million dollars in tax refund monies to be direct deposited to these bank accounts and related bank accounts from 2010 through 2012 and then withdrew the money for his own personal use.

The defendant was charged with wire fraud and aggravated identity theft.

Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

8.   United States v. Karl Moltimer, Case No. 14-20117-Cr-Altonaga

On February 27, 2014, Karl Moltimer, 34, of Miami, was charged in a fourteen-count indictment in a stolen identity tax refund fraud scheme that resulted in the submission of over $1 million in fraudulent refund claims.

According to the indictment, Moltimer obtained EFIN numbers that permitted him to file tax returns in the names of other persons. Moltimer opened bank accounts for himself and his business name. Moltimer, through his EFINs, caused false and fraudulent tax returns seeking refunds to be filed with the IRS using stolen individuals’ personal identity information. Moltimer caused the fraudulently obtained tax refunds to be either deposited into bank accounts controlled by him, paid via refund anticipation checks controlled by him, or paid via pre-paid debit cards controlled by him. Moltimer caused over one million dollars in false and fraudulent tax refund claims to be submitted to the IRS from 2009 through 2012 through his EFINs.

The defendant was charged with wire fraud and aggravated identity theft.

Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

9.   United States v. Marlon Hamilton, Case No. 14-20175-Cr-Moreno

On March 18, 2014, Marlon Hamilton, 40, of Hialeah, was charged in a six count indictment for his participation in a stolen identity tax refund scheme.

According to the indictment, the defendant obtained and sold the personal identifying information of numerous identity theft victims, including their names, dates of birth, and social security numbers, to an individual who intended to utilize the information to electronically file false, fictitious, and fraudulent federal income tax returns without the knowledge or authorization of the identity theft victims, and thereafter claim refunds to which they were not entitled from the IRS. The intended loss to the IRS was approximately $190,000. The indictment charges the defendant with unauthorized possession of personal identification information and aggravated identity theft.

Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.

10.               United States v. Marcus Braxton, Case No. 14-20174-Cr-Ungaro

On March 18, 2014, Marcus Braxton, 29, of Plantation, was charged in a six count indictment for his participation in a stolen identity tax refund scheme.

According to the indictment, the defendant obtained and sold the personal identifying information of numerous identity theft victims, including their names, dates of birth, and social security numbers, to an individual who intended to utilize the information to electronically file false, fictitious, and fraudulent federal income tax returns without the knowledge or authorization of the identity theft victims, and thereafter claim refunds to which they were not entitled from the IRS. The intended loss to the IRS was approximately $58,500.

The indictment charges the defendant with unauthorized possession of personal identification information and aggravated identity theft.

Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.

11.               United States v. Richard Anthony Siler, Case No. 14-20116-Cr-Williams

On February 27, 2014, Richard Anthony Siler, 50, of Hollywood, was charged in a nine-count indictment in a stolen identity refund fraud scheme that involved the sale of over 5,000 people’s identities.

According to the indictment and other documents filed in court, Siler discussed selling approximately 10,000 to 15,000 identities to a confidential source who told Siler that the identities would be used to file taxes. Siler indicated to the confidential source that these identities were “never revealed before.” Siler discussed selling the 10,000 to 15,000 identities to the confidential source for approximately $6,200. On February 14, 2014, an FBI controlled e-mail account received an e-mail from Richard Siler containing approximately 5,200 individuals’ personal identifying information that appeared to be patients. On that same date, the confidential source provided Siler with $6,200 in currency and Siler was arrested.

The defendant was charged with access device fraud and identity theft.

Ferrer commended the investigative efforts of the Strike Force, with special commendation to the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

12.               United States v. Giovanni Francois Noel, Case No. 14-20198-Cr-Moore

On March 28, 2014, Giovanni Francois Noel, 24, of North Miami Beach, was charged in an eight count indictment for his participation in an identity theft tax refund scheme.

According to the indictment, the defendant possessed the social security numbers of at least fifteen individuals. The indictment also alleges that the defendant stole the means of identification, specifically, the name and date of birth, of seven individuals.

Ferrer commended the investigative efforts of the Strike Force, with special commendation to the IRS-CI and the NMBPD. The case is being prosecuted by Assistant U.S. Attorney John R. Byrne.

U.S. Secret Service Special Agent in Charge Paula Reid added, “Once again, the U.S. Secret Service is glad to be an integral part of combatting this massive fraudulent scheme that is plaguing South Florida. Together, we will continue to identify and penalize those who misuse our government systems with no regard to the financial and unjust impacts they cause on others.”

13.               United States v. Wallens B. Alcime, Case No. 14-02372-mj-Goodman

On April 1, 2014, Wallens B. Alcime, 26, of Miami, was charged by criminal complaint for his participation in a stolen identity tax refund scheme.

According to the criminal complaint, a confidential source informed law enforcement that Alcime was using the mailing addresses of accomplices to receive stolen identity tax refunds deposited onto pre-paid debit cards. A controlled delivery was arranged where Alcime took possession of a debit card loaded with stolen identity tax refunds while under law enforcement surveillance. Alcime was later captured on surveillance video making cash withdrawals from the debit card.

The defendant was charged with access device fraud and aggravated identity theft.

Ferrer commended the investigative efforts of the FBI and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.

14.               United States v. Steven Toussaintet al., Case No. 14-20161-Cr-Martinez

On March 14, 2014, Steven Toussaint, 32, and Emmanuel Alphonse, 28, both of Miami, were charged by indictment in a scheme to launder money from stolen identity tax refund fraud.

According to the indictment, the defendants conspired to conduct financial transactions the purpose of which was to conceal the proceeds of theft from the government. Each defendant is also charged with ten counts of money laundering connected to individual money orders cashed on various dates alleged in the indictment.

The complaint charges the defendants with conspiracy to commit money laundering and money laundering.

Ferrer commended the investigative efforts of USPIS and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.

15.               United States v. Mark Anthony Dacres, Jr., Case No. 14-20204-Cr-Ungaro

On April 1, 2014, Mark Anthony DacresJr., 30, of Homestead, was charged in a seven-count indictment for identity theft in connection with his unauthorized possession of at least fifteen social security numbers belonging to other individuals. Dacres was found with over 1,700 names, dates of birth and social security numbers of other individuals.

Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI and USSS. The case is being prosecuted by Assistant U.S. Attorney Gera Peoples.

16.               United States v. Providencia Llanos, Case No. 14-20205-Cr-Lenard

On April 1, 2014, Providencia Llanosa/k/a “Providensia Llanos,” a/k/a “Providencia Allison,” 36, of Miami Gardens was charged in a seven-count indictment for identity theft in connection with her unauthorized possession of at least fifteen social security numbers belonging to other individuals. Llanos was found with over 3,000 names, dates of birth and social security numbers of other individuals.

Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI and USSS. The case is being prosecuted by Assistant U.S. Attorney Gera Peoples.

17.               United States v. Stevens Nore, Case No. 14-14016-Cr-Middlebrooks

On March 24, 2014, Stevens Nore, 35, of Port St. Lucie, was charged in a twenty-eight count indictment for his participation in tax fraud and identity theft schemes.

According to the indictment, from June 11, 2009 through April 2012, Nore owned and operated Fraternity Tax and Services, a tax return preparation business located in Fort Pierce. Nore prepared and submitted Individual Tax Returns (Forms 1040), with accompanying schedules, to the IRS on behalf of taxpayers claiming false deductions and credits for tax years 2009 to 2011. Nore also filed false tax returns for 2010 and 2011 by falsely stating the amount of gross receipts and sales on Schedule C forms. The defendant stole three tax refunds totaling $26,349.30 to which he was not entitled, and used the identity of two individuals without their permission.

Nore was charged with twenty-one counts of preparing false tax returns, two counts of filing false tax returns, three counts of theft of public money, and two counts of aggravated identity theft.

Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Shaniek Maynard.

18.               United States v. Rony Maurival, Case No. 14-14014-Cr-Middlebrooks

On March 24, 2014, Rony Maurical, 38, of Port St. Lucie, was charged in fifty-two count indictment for his participation in tax fraud and identity theft schemes.

According to the indictment, from July 3, 2008 through March 23, 2012, Maurival owned and operated RJ’s Tax & Services, a tax return preparation business located in Fort Pierce. Maurival prepared and submitted Individual Tax Returns (Forms 1040), with accompanying schedules, to the IRS on behalf of taxpayers claiming false deductions and credits for tax years 2008 to 2011. Maurival also filed false tax returns for 2009 and 2010 by falsely claiming Head of Household and falsely stating Schedule C income, gross receipts, and sales. The defendant stole three tax refunds totaling $3,292 to which he was not entitled, and used the identity of three individuals without their permission.

Maurival was charged with forty-four counts of preparing false tax returns, two counts of filing false tax returns, three counts of theft of public money, and three counts of aggravated identity theft.

Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Russell R. Killinger.

Alysa D. Erichs, Special Agent in Charge for ICE-HSI stated, “Homeland Security Investigations utilizes its vast authorities to work with their partners to disrupt and dismantle criminal organizations involved in tax refund fraud schemes and other financial violations that affect our citizens and economy.”

If convicted, the defendants face a possible maximum statutory sentence of twenty years in prison for each count of wire fraud; ten years in prison for conspiracy to make false claims against the United States; five to fifteen years in prison for access device fraud; ten years in prison for stealing government funds; and two years in prison consecutive to any other term for aggravated identity theft.

An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.

Don’t waste money on identity theft protection services


Are you one of the 47.5 million Americans who purchased “identity theft protection” last year? If so, you wasted your money.

Credit reporting agencies and identity theft protection services push statistics like “almost 14 million adults were victims of identity theft in 2011” or “over 100 million Americans have had their personal identifying information placed at risk of identity theft as a result of governmental and corporate data breaches.”

These statements are made while prodding you to purchase a service that could cost up to $189 annually. What these companies fail to tell you is that identity theft protection does not cover IRS tax return filings, account takeovers, the misuse of credit or debit cards, prior instances of identity theft or the establishment of personal identification (such as a driver’s license or Social Security card) in your name.

According to recent reports, Americans are spending an estimated $3.5 billion a year on identity theft protection. Most of these services are a waste of money as almost all of the services provided are available at little or no cost to the consumer.

There is no reason to pay a monthly or yearly fee for something you can do yourself for free.

Periodically review your credit report

By keeping close tabs on your consumer credit profile, you can detect signs of identity theft early. If you find an account not opened by you and have positively identified it as fraudulent, enter a dispute directly with the creditor as well as with the credit reporting agencies of Equifax, Experian and TransUnion. You can obtain a free credit report at www.annualcreditreport.com or (877) 322-8228. When you pay for identity theft protection, this free credit report is one of the “benefits” they tout.

Place a 90-day initial fraud alert on your credit report

Contact the credit reporting agencies and request a 90-day initial fraud alert on your credit report. Not only will this trigger a free credit report but will advise potential creditors to investigate any application prior to issuing credit, goods, benefits, services and/or employment. Contact Equifax at (800) 525-6285, Experian at (888) 397-3742 and Trans Union at (800) 916-8800. When you pay for identity theft protection, this fraud alert is one of the “benefits” they tout. Just be sure to renew the alert every three months.

Freeze your credit report

Identity thieves are frozen in their tracks without access to your credit report as potential creditors will not have access to your credit history. In most states, you are entitled to temporarily “freeze” access to your credit profile without cost if you are over 65 years of age or are a verified victim of identity theft. All others may be required to pay a small fee. Without access to your credit report, a responsible lender will not issue credit. When you pay for identity theft protection, a credit report freeze is one of the “benefits” they tout.

Stop unsolicited credit card offers

Are you tired of junk mail filling your mail box? Opting out at www.optoutprescreen.com or (888) 5OPT-OUT will stop most unsolicited pre-approved applications and reduce the incidence of identity theft. Opting out refers to the process of removing your name and address from lists supplied by the Equifax, Experian, Trans Union and Innovis credit reporting agencies to be used for firm (preapproved/ prescreened) offers of credit or insurance. When paying for identity theft protection, opting out is one of the “benefits” they tout.

Purchase a cross-cut shredder

“Dumpster diving” is still a very popular method of obtaining credit card applications and supporting documentation. Purchase a cross-cut shredder that cuts vertically and horizontally, turning sensitive mail into confetti. If you think a torn up credit card application will be rejected by a credit card company, you have not heard the story of how Chase Bank approved a ripped up application.

Victims of identity theft often feel pressured into purchasing additional identity theft monitoring products when contacting the Equifax, Experian and Trans Union consumer reporting agencies to repair their credit. So much so that the Federal Trade Commission has recently reported the conduct in a 73-page report titled: “An FTC Staff Report on a Survey of Identity Theft Victims.”

The FTC report also found that the vast majority of consumers dealing with identity theft issues were unaware of their rights under the Fair Credit Reporting Act. These rights included the ability to request free credit reports when placing a fraud alert, the ability to block fraudulent information from appearing on their credit reports and to receive a notice of these and other important rights directly from creditors and consumer reporting agencies.

While the Credit Card Act of 2009 mandated a number of changes in relation to “free credit reports,” the area of identity theft protection is an area to watch. Reduced fees in one area will only mean enhanced fees in another. There is no reason to pay a monthly or yearly fee for something you can do yourself for free.

Bill Lewis is the principal of William E. Lewis Jr. & Associates and host of The Credit Report with Bill Lewis — a daily forum for business and financial news, politics, economic trends and issues on AM 740 WSBR in south Florida.

Bogus credit repair firm shut down by FTC


 

On Friday, the Federal Trade Commission announced action against a Florida-based credit repair company that allegedly continued to pitch bogus services despite a 2010 court order requiring it to stop. In the most recent action, Latrese and Kevin Hargrave allegedly continued to scam unsuspecting victims through new companies.

Signed by U.S. District Court Judge Marsha Howard, the new order will remain in place while the FTC seeks a contempt ruling against the Hargrave organization for violating its initial cease and desist order. Pending further court action, the Hargraves are banned from all activities involving credit repair and from offering credit-related products, programs, or services.

In 2008, the FTC filed a complaint against the Hargraves and the firms they control, alleging that they advertised bogus credit repair services on the Internet and radio stations. Consumers were charged $250 to $270 per person and $450 per couple. They were also required to pay half or all of the fees in advance of services of being rendered.

In a radio script, the Hargrave’s stated, “They specialize in erasing bad credit! Hargrave & Associates covers all three major credit bureaus, slow pays, charge-offs, repossessions can be erased for $250.”

In early 2010, the court ruled in favor of the FTC and barred the Hargraves from engaging in deceptive conduct, including making or using untrue or misleading statements to induce consumers to buy their credit repair services. It also barred them from charging or receiving an up-front payment for any such services before they are performed.

In mid-May, at the FTC’s request the U.S. District Court in Jacksonville, Fla., issued a temporary restraining order against the Hargraves, appointed a receiver, and froze the Hargrave’s assets, stating that “there is good cause to believe that they had violated and continued to violate the provisions of the permanent injunction” against them, the order states.

The FTC alleges the Hargraves continued to violate the FTC Act and the Credit Repair Organizations Act through their false credit repair claims. Following a hearing in late May, the court entered a preliminary injunction order, barring the Hargraves from engaging in deceptive credit repair offers and freezing their assets.

The Hargrave defendants include: Latrese & Kevin Enterprises Inc., doing business as Hargrave & Associates Financial Solutions; Latrese Hargrave, also known as Latrese V. Williams, individually and as an officer of Latrese & Kevin Enterprises Inc.; and Kevin Hargrave, Sr., individually and as an officer of Latrese & Kevin Enterprises Inc.

In addition to the defendants charged in the original complaint, the contempt action named three other companies the Hargraves started in an effort to allegedly circumvent the original cease and desist order: BFS Empowerment Financial Services Inc., Help My Credit Now Services Inc., and Kevtrese Enterprises Inc.

The FTC received invaluable assistance in the prosecution of this matter from the Arkansas Attorney General, the Florida Attorney General, the Louisiana Attorney General, the Tennessee Attorney General, and the Better Business Bureau of Northeast Florida.

As the nation’s consumer watchdog, the FTC works to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop and avoid them. To file a complaint in English or Spanish, visit the FTC’s online complaint assistant or call 1-877-382-4357.

The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The Federal Trade Commission’s website provides free information on a variety of consumer topics.

“Like” the Federal Trade Commission on Facebook, follow them on Twitter, and subscribe to press releases for the latest in consumer news, scam alerts and additional resources. 

Bill Lewis is the principal of William E. Lewis Jr. & Associates and host of the Credit Report with Bill Lewis — a daily forum for business and financial news, politics, economic trends and issues on AM 740 WSBR in south Florida.

Two Memorial Healthcare System employees suspected in identity theft scheme


 

Two employees of the Memorial Healthcare System have been fired and may face criminal charges in relation to an identity theft scheme involving the intended filing of fraudulent IRS tax returns.

The system – which controls the public hospitals of South Broward – began notifying Thursday approximately 9,500 patients that their personal information may have been stolen by the former employees. 

The illegal access allegedly occurred during 2011 and early 2012.

The unnamed former employees are suspected of taking patients’ names, dates of birth and Social Security numbers.  According to the Memorial Healthcare System, no medical records were stolen. 

Patients affected by the information breach are being offered one year of free credit monitoring services as well as call center support.

While awaiting notification, former patients of the Memorial Healthcare System should contact the credit reporting agencies to initiate a 90-day “fraud alert” in an effort to protect their personal information.

Equifax can be contacted at (800) 685-1111 or www.Equifax.com; Experian can be contacted at (888) 397-3742 or www.Experian.com; and Trans Union can be contacted at (800) 916-8800 or www.TransUnion.com.  Be sure to prompt that you are a potential identity theft victim when requested to do so.

For your free annual credit report, contact the central source at 877-FACT-ACT (877-322-8228) or www.AnnualCreditReport.com.  Follow the voice prompts and obtain your credit report for review.

Under the Fair Credit Reporting Act, consumers are entitled to a free copy of their credit report under a narrow set of circumstances.  If you have been denied credit, goods, benefits, services, insurance, and/or employment, or are a potential victim of fraud, the credit reporting agencies of Equifax, Experian and Trans Union are statutorily mandated to provide a copy free of charge.

Fake debt-collector calls from India halted by Court


A federal judge in the U.S. District Court for the Northern District of Illinois has halted an operation that the Federal Trade Commission alleged collected phantom payday loan “debts” that consumers did not owe.

The FTC charged Villa Park, Calif.-based American Credit Crunchers LLC, an affiliated company known as Ebeeze LLC, and the companies’ owner, Varang K. Thaker, with violating the FTC Act and the Fair Debt Collection Practices Act.

In the last two years, consumers in the United States have received millions of collection calls from India by Thaker and his related companies.

According to the FTC’s complaint, American Credit Crunchers and Thaker obtained information, including Social Security or bank account numbers, about consumers who had inquired about, applied for or obtained online payday loans. Thereafter, Thaker worked with telephone “debt collectors” in India who called consumers using deceptive statements and threats to convince them to pay debts that were not owed or that he was not authorized to collect.

According to the FTC, Thaker and his companies falsely told consumers they were delinquent on a loan, they must pay it and they had the authority to collect it. They also falsely claimed to be law enforcement authorities or attorneys and made false threats against consumers who refused to pay the alleged debts, including threats of arrest or imprisonment. Many consumers often felt so harassed and threatened that they paid the alleged debts out of fear of being arrested or sued.

The FTC alleged that information submitted by consumers who applied online for the fake payday loans found its way into the hands of the American Credit Crunchers and Thaker. Since January 2010, the operation took in more than $5 million from victims across the United States.

Often pretending to be law enforcement officers or other governmental authorities, the telephone “debt collectors” would falsely threaten to immediately arrest and jail consumers if they did not agree to make a payment on a delinquent payday loan, the FTC’s court papers stated.

Claiming to be from a local police department, or simply a “federal investigator” from the “Federal Department of Crime and Prevention,” “Affidavit Consolidation Services,” Criminal Bureau of Identity,” “U.S. National Bank,” “US Justice Department/Payday Loan Division,” “Federal Investigation Bureau,” “United Legal Processing” and other phony names, the telephone callers often demanded more than $300 and sometimes as much as $2,000.

At other times, according to the FTC, the telephone “debt collectors” said they would file a lawsuit against the consumer because of the delinquent payday loan or would have them fired from their job.

But the consumers did not owe money to American Credit Crunchers or Thaker. Either the payday loan debts did not exist or the phony telephone “debt collectors” had no authority to collect them because they were owed to someone else.

The court order halts the illegal conduct and freezes the assets of American Credit Crunchers and Thaker while the FTC continues to prosecute its case.

“This is a brazen operation based on pure fraud, and the FTC is committed to shutting it down,” stated David Vladeck, director of the FTC’s Bureau of Consumer Protection. “Consumers should not be pressured into paying debt they don’t remember owing. Legitimate debt collectors must provide consumers with both written information about the debt, and instructions for protecting themselves if they don’t think they owe the debt.”

If contacted by a debt collector, always remember that:

1. A debt collector may contact you in person, by mail, e-mail, telephone, telegram or fax. A collector may not contact you with such frequency that can be considered harassing. A debt collector may not contact you at work if they know your employer does not disapprove, nor may they contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m.

2. A debt collector is required to send written notice within five days of first contact advising the amount due. The notice must also specify the name of the creditor and what action to take if you wish to dispute the debt.

3. You may stop a debt collector from contacting you by writing a letter ceasing them from communication. Once the agency receives it, they may not make further contact except to advise there will be no further contact or to notify you of a specific action contemplated by the creditor.

4. A debt collector may not harass or abuse a consumer. A collector may not use threats of violence against a person, property or reputation; use obscene or profane language; advertise the debt; or repeatedly make calls with the intent to harass or abuse the person at the called number.

5. Debt collectors may not use false statements, such as implying they are attorneys; that you have committed a crime; that they operate or work for a credit reporting agency; misrepresent the amount of a debt; or indicate that papers mailed are legal forms when they are not.

6.) Debt collectors may not threaten arrest or that they will seize property or garnish wages unless the collection agency or creditor intends to do so; or that a lawsuit will be filed when they have no legal right to file or do not intend to file such a suit.

If you are being harassed by a debt collector — real or fake — file a complaint with the Attorney General’s office or with the Federal Trade Commission at www.ftc.gov.

Tax Masters and JK Harris Face AG Inquiry


While the Federal Trade Commission has cracked down on debt settlement and loan modification firms that charge upfront fees, little has been done to rein in tax resolution companies that promise to reduce IRS liabilities.  The FTC has allowed a number of these operations to continue while making a determination whether the agency has authority over them.

With the April 18th tax deadline three weeks away, tax relief companies have increased late night advertising and Internet promotions promising to settle delinquent IRS debt for pennies on the dollar.  Several of these companies are under investigation for deceptive practices.

Florida Attorney General Pam Bondi has initiated a civil inquiry into Texas based Tax Masters and South Carolina based JK Harris and Company following the receipt of 26 and 92 complaints respectively.  These companies solicit clients nationwide promising to reduce anxiety and debt to the IRS.

Tax Masters is being investigated for allegations of unfair competition and deceptive trade.  Consumer complaints allege violations consisting of: failing to provide service as initially contracted, misrepresentation of the breath of services to clients, charging for unnecessary services, unauthorized credit card transactions, as well as failing to provide refunds. 

The Texas and Minnesota attorneys general also filed civil charges of deceptive and unfair trade practices against Tax Masters in 2010.

JK Harris and Company is under investigation for allegedly violating a 2008 settlement with Florida and 17 other states over what regulators said were misleading sales tactics.  Among the allegations were false claims that case processors were former IRS agents or tax experts and that the company failed to provide refunds for clients it was unable to help. 

The Attorney General’s Office is continuing to work on the multi-state investigation regarding JK Harris. North Carolina is the lead state. JK Harris has been responsive to a list of Florida consumer complaints forwarded to their attention.  However, they have not been responsive to the multi-state requests for additional information and documents as part of the continuing investigation.

Some tax relief operations are the target of legal inquiries and lawsuits by regulators in multiple states.  Thousands of consumers nationwide have complained they demanded advance fees of up to $25,000, while promising relief from back taxes and penalties, then did nothing.

Tax-relief companies have flourished as the Internal Revenue Service has more aggressively pursued delinquent taxpayers.  According to the IRS Data Book, the agency filed nearly 1.1 million liens nationwide in fiscal year 2010, an increase of over 60 percent from 2007.

In a seemingly unregulated industry, tax resolution firms have gone largely unnoticed.  A lack of determination of authority from the FTC, tough economic times, and a taxpayers desire to reduce anxiety and IRS debt, have allowed them to exist.  Good common sense in choosing a credentialed tax expert and paying huge upfront fees has been ignored.

According to the Internal Revenue Service, three professionals are authorized to represent taxpayers before them – attorneys, certified public accountants and enrolled agents, all whom must pass an IRS test and take refresher courses.  

In the absence of representation, consumers can negotiate back taxes and penalties directly with the Internal Revenue Service.

Regulators and consumer advocates warn against using companies guaranteeing what the Internal Revenue Service calls an “offer in compromise” — a settlement for reduced tax payment.  Although increasing, IRS statistics show that only 25 percent of compromise applications are granted.

Taxpayers seeking relief from IRS debt should also be aware that companies claiming to be tax specialists may simply be advertising the services of a third-party.

Unlike the debt settlement and loan modification industry, tax resolution services are unregulated in Florida.  Despite the huge volume of complaints regarding advance payments and deceptive advertisements, lawmakers have taken little notice.  No regulation seems on the agenda of the 2011 Florida legislature.

To file a complaint with the Federal Trade Commission, visit www.ftc.gov or call (877) FTC-HELP (877-382-4357).

To file a complaint with the Florida Attorney General, please visit www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226).

To review Bill Lewis’ entire consumer protection series, visit http://www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into The Credit Report with Bill Lewis, weekdays at 9 o’clock on AM 1470 WWNN.

Tax Relief Firms Being Investigated


While the Federal Trade Commission has cracked down on debt settlement and loan modification firms that charge upfront fees, little has been done to rein in tax resolution companies that promise to reduce IRS liabilities.  The FTC has allowed a number of these operations to continue while making a determination whether the agency has authority over them.

With the April 18th tax deadline a month away, tax relief companies have increased late night advertising and Internet promotions promising to settle delinquent IRS debt for pennies on the dollar.  Several of these companies are under investigation for deceptive practices.

Florida Attorney General Pam Bondi’s office has initiated a civil inquiry into Texas based Tax Masters and South Carolina based JK Harris and Company following the receipt of 26 and 92 complaints respectively.  These companies solicit clients nationwide promising to reduce anxiety and debt to the IRS.

Tax Masters is being investigated for allegations of unfair competition and deceptive trade.  The Texas and Minnesota attorneys general also filed civil charges of deceptive and unfair trade practices against them in 2010.

JK Harris and Company is under investigation for allegedly violating a 2008 settlement with Florida and 17 other states over what regulators said were misleading sales tactics.  Among the allegations were false claims that case processors were former IRS agents or tax experts and that the company failed to provide refunds for clients it was unable to help.  State officials say JK Harris is cooperating with the investigation.

Some tax relief operations are the target of legal inquiries and lawsuits by regulators in multiple states.  Thousands of consumers nationwide have complained they demanded advance fees of up to $25,000, while promising relief from back taxes and penalties, then did nothing.

Tax-relief companies have flourished as the Internal Revenue Service has more aggressively pursued delinquent taxpayers.  According to the IRS Data Book, the agency filed nearly 1.1 million liens nationwide in fiscal year 2010, an increase of over 60 percent from 2007.

In a seemingly unregulated industry, tax resolution firms have gone largely unnoticed.  A lack of determination of authority from the FTC, tough economic times, and a taxpayers desire to reduce anxiety and IRS debt, have allowed them to exist.  Good common sense in choosing a credentialed tax expert and paying huge upfront fees has been ignored.

According to the Internal Revenue Service, three professionals are authorized to represent taxpayers before them – attorneys, certified public accountants and enrolled agents, all whom must pass an IRS test and take refresher courses.  

In the absence of representation, consumers can negotiate back taxes and penalties directly with the Internal Revenue Service.

Following the 2008 settlement, JK Harris changed its business model and claims to charge only in advance for a report that analyzes what program a taxpayer would be qualified to participate.  Taxpayers could then use the report to negotiate directly with the IRS or retain JK Harris to represent them.

Tax Masters said the company adopted a similar model last year and is charging fewer upfront fees.  Following an analysis, clients can decide if they want Tax Masters to pursue a resolution and will be charged only if the company is successful.  The average Tax Masters client pays $4,500.

Regulators and consumer advocates warn against using companies guaranteeing what the Internal Revenue Service calls an “offer in compromise” — a settlement for reduced tax payment.  Although increasing, IRS statistics show that only 25 percent of compromise applications are granted.

Taxpayers seeking relief from IRS debt should also be aware that companies claiming to be tax specialists may simply be advertising the services of a third-party.

Unlike the debt settlement and loan modification industry, tax resolution services are unregulated in Florida.  Despite the huge volume of complaints regarding advance payments and deceptive advertisements, lawmakers have taken little notice.  No regulation seems on the agenda of the 2011 Florida legislature.

To file a complaint with the Federal Trade Commission, visit www.ftc.gov or call (877) FTC-HELP (877-382-4357).

To file a complaint with the Attorney General’s Office, visit www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226).

To review Bill Lewis’ entire consumer protection series, visit http://www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into The Credit Report with Bill Lewis, weekdays at 9 o’clock on AM 1470 WWNN.

FTC Sues Florida Loan Modification Firm


Continuing their crackdown on scam artists that prey upon delinquent homeowners facing foreclosure, the Federal Trade Commission has charged a national operation with marketing bogus loan modification services. The FTC has sought to stop their illegal practices and force payment of restitution to victims.

Based in Palm Beach County, U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., LowerMyDebts.com LLC, David Mahler, Jamen Lachs, and John Incandela, Jr., also known as Jonathan Incandela, Jr., allegedly violated the FTC Act and the FTC’s Telemarketing Sales Rule by falsely claiming they could obtain loan modifications that would drastically reduce mortgage payments for distressed homeowners.  

They also allegedly misrepresented approval and affiliation with mortgage lenders and falsely claimed they would fully refund homeowners money if they failed to receive a loan modification.

According to the FTC’s complaint, distressed homeowners were targeted using direct mail, the Internet, and telemarketing.  Homeowners were falsely promised a loan modification that would reduce their monthly mortgage payments, while being promised a full refund if they failed.  Promises were also made to homeowners whose lenders had previously denied them loan modifications or who had been sent foreclosure notices.  Claiming a success rate of almost 100%, homeowners were charged up to $2,600 and typically requested for half of the fee upfront.

The defendants claimed expertise that enabled them to prevent foreclosure and often mislead homeowners that they were affiliated with or approved by lenders.  They advised homeowners not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments would demonstrate a hardship to lenders.

In addition, the defendants allegedly violated the FTC Rule by calling numbers listed on the National Do Not Call Registry, and for not paying the required annual fee for accessing numbers within the Registry.

In 2009, the Florida legislature passed Senate Bill SB 2226, making significant changes to Florida’s mortgage brokerage law.  The law – Chapter 494, Florida Statutes – specifically covered negotiation of existing loans as being the duty of a licensed mortgage broker.  As of January 1, 2010, any individual or business attempting to negotiate a loan or mortgage modification must be licensed through the Florida Office of Financial Regulation.  Additionally, new disclosures are required such as large-type print on contracts and a three-day rescission period.

“The days of simply opening up shop and starting a loan modification business have come to an end in Florida,” says Carlos J. Reyes, a foreclosure defense attorney with the Reyes Law Group in Fort Lauderdale.  “Individuals or businesses providing loan modification services must be licensed as a mortgage broker by the OFR in order to conduct business and cannot charge advance fees.”

The FTC recently issued the Mortgage Assistance Relief Services Rule, that prohibits mortgage foreclosure and loan modification services from collecting fees until homeowners have a written offer from their lender that they personally find acceptable. As the defendants’ advertisements predated this new Rule, the FTC did not allege violations in this case.

To learn more about the action taken against U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, or to file a complaint with the Federal Trade Commission, visit www.ftc.gov or call (877) FTC-HELP (877-382-4357).

To learn more about mortgage fraud or the loan modification process in Florida or to file a complaint with the Attorney General’s Office, visit www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226). 

To review Bill Lewis’ entire consumer protection series, visit www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity.  To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.

Original Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group:  http://www2.highlandstoday.com/content/2011/mar/13/ftc-sues-florida-loan-modification-firm/columns-welewisjr/

Walking Away from a Successful Business


While 2010 has been challenging with baby Rebecca and William III joining their older sister Katherine in the Lewis household, decisions and choices for change in 2011 are proving an equal challenge.

Between a growing family and commitment to several businesses and charitable causes, there is simply not enough time in the day.

Struggling through tough economic times and an industry that is heavily scrutinized and frowned upon – the credit repair industry – decisions must be made. Does one continue working in an industry they have grown to hate?

Does one sell the business with its perfect record and reputation within the community? Or do they simply shut down and walk away from a profitable business after a decade in existence?

When you hear about credit repair companies from “reputable” sources, such as the Attorney General’s Office or Federal Trade Commission (FTC), you are usually warned about the disreputable nature of the industry. You are warned about hiring credit repair companies and advised that you are better off repairing your own credit through a do-it-yourself approach.

Why have credit repair companies been made into villains? Answer – because most of them are, in fact, nothing more than scams or fly-by-night outfits. Most of these companies promise unsuspecting customers that they can magically erase all of their debt for a small fee. Others advise they can legally create a new identity through use of a Taxpayer Identification Number (TIN) or Credit Profile Number (CPN), thus segregating one credit identity from another.

Use of a Taxpayer Identification Number or Credit Profile Number, also referred to as a Credit Privacy Number, is highly illegal and could result in criminal charges of mail or wire fraud, identity theft, or misuse of personal information. File segregation is something that is not advised if you value your freedom.

Started on Sept. 10, 2001 approximately 100 yards from the downtown Hollywood home of 9-11 hijacker Mohamed Atta, Credit Restoration Consultants attempted to present a new approach in the “credit restoration” industry. Hesitant to utilize the forbidden term “credit repair,” Credit Restoration Consultants branded itself as a credit service organization specializing in the restoration of consumer credit worthiness as well as identity theft.

Among the clients of Credit Restoration Consultants were a variety of sorts. Whether the “average Joe,” attorneys, doctors, multi-millionaire developers, celebrities, pro-sports players, or politicians; including, a sitting governor, U.S. senator, and several congressmen, each had varying expectations bordering on the unreasonable, unrealistic or downright ridiculous. Each expected an 800 FICO score despite late payments, collections, repossessions or foreclosures, in addition to federal tax liens and bankruptcies.

One would not be surprised on just how many politicians have had federal tax liens filed against them.

While the FTC shutdown 33 credit repair companies in 2008 and 36 in 2009 for violations of the Credit Repair Organizations Act, Credit Restoration Consultants has never had a complaint to any state, federal, or local regulatory authority. In fact, Credit Restoration Consultants maintains an A+ rating with the Better Business Bureau and a complaint free history.

According to a recent Small Business Administration study, seven out of 10 new businesses survive at least two years, half at least five years, a third at least 10 years, and a quarter 15 years or more. Credit Restoration Consultants lasted just under 10 years.

Tired of the bad actors and scam artists in an already heavily scrutinized credit repair industry, I have decided to simply shut down, throw in the towel, and walk away.

Rather than sell the successful business that Credit Restoration Consultants became and have another destroy it and my personal reputation, walking away seems the best course of action. With that – I quit.

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group http://www2.highlandstoday.com/content/2011/jan/02/walking-away-from-a-successful-business/

To review Bill Lewis’ entire consumer protection series at the Highlands Today, visit www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.