Is This the Next Big Focus for Mortgage Fraud Investigations?

In one of the largest mortgage scams in California, the operators of a boiler-room telemarketing company, US Homeowners Assistance, were ordered to pay more than $4 million in penalties yesterday for false mortgage modification loan promises made to more than 1,000 customers.

California Attorney General Kamala Harris said the Orange County Superior Court-ordered judgment includes $2 million in restitution for the money customers paid for services they did not receive to Statewide Financial Group of Orange County.

Statewide Financial did business under the names US Homeowners Assistance, US Homeowners Preservation Center and Webeatallrates.com, Harris said.

Orange County Superior Court ordered that every US Homeowners Assistance loan modification customer collect a full refund upon request.

“The significant financial penalties imposed by the court let scammers know that severe consequences will flow to those who defraud California consumers,” Harris added.

More than 1,200 clients were the focus of this prosecution that took nearly three years.

Harris’ office shut down the Orange County-based business in 2009.

In March 2012, business owners Zulmai Nazarzai, Hakimullah Sarpas and Fasela Sheren, who went by the name of Sharon Fasela, were found liable for violating California’s unfair competition and false advertising laws.

The defendants, who were permanently banned from repeating similar conduct, were ordered to pay $2 million in civil penalties. It was not clear how the money would be recovered or how much money would be available to pay refunds or penalties.

Nazarzai has been incarcerated in the Orange County jail on a contempt of court charge since December 2010 for refusing to heed a court order to turn over $360,000 unlawfully taken by defendants.