Phony mortgage relief scam defendants banned from business, ordered to pay $3.8 million

The South Florida-based defendants in an alleged mortgage relief scam will surrender their assets and be banned from providing mortgage relief and debt relief services to consumers under a settlement with the Federal Trade Commission. 

The settlement is the FTC’s largest judgment against a mortgage assistance relief provider.

In 2012, the FTC and other agencies charged 11 companies and five individuals with running an illegal mortgage relief scheme that operated under various names, including Prime Legal Plans. 

The scheme

Using Reaching U Network, a non-profit front, and a maze of other companies, the scheme reeled in consumers with false promises that enrollment would save their homes from foreclosure or result in lower mortgage payments, said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. A court order shut down the operation and froze the defendants’ corporate and personal assets until the case was settled.

“Rather than make good on their promise to offer people relief from mortgage trouble, these schemers put their targets even further behind financially,” Rich said. “They broke the law by taking money upfront and making false promises.”

The settlements

Under the settlements announced Tuesday, the defendants are banned from providing mortgage and debt relief, and are prohibited from misrepresenting any product or service. They’re also are banned from placing calls to numbers listed on the Do Not Call Registry.   

The settlements require the defendants to pay nearly $3.6 million in refunds to consumers. Under the terms of the settlements:

• $25.1 million judgment, the total amount of fees taken in by the scheme, for Derek Radzikowski, Jason Desmond, Prime Legal Plans LLC, and five other corporate defendants. The judgment will be suspended when they surrender their assets – an estimated $3.5 million. 
  

• $1.42 judgment for Andrew Primavera and Lazaro Dinh and four corporate defendants. 

• $392,215 judgment for Christopher N. Edwards and Reaching U Network Inc., and a $102,417 judgment for Kim E. Landolfi. 

Under federal law, foreclosure rescue and loan modification service providers are banned from collecting fees until homeowners have a written offer from their lender or servicer that they think is acceptable. 

For consumer information about avoiding mortgage and foreclosure rescue scams, see this FTC webpage.