Florida Man Pleads Guilty to Defrauding Homeowners in Home Loan Modification Scam

United States Department of Justice Release

BOSTON – A Florida man has pleaded guilty to charges stemming from his participation in a scheme to defraud homeowners who were looking to modify their home loans.

Vernell Burris, Jr., 52, of Boynton Beach, Fla., pleaded guilty today before U.S. District Court Judge Rya W. Zobel to conspiracy and wire fraud.

According to the charges to which Burris pleaded guilty, he and other co-conspirators operated an organization called Home Owners Protection Economics Inc. (HOPE) from January 2009 through May 2011.

They instructed HOPE employees to make a series of misrepresentations to induce financially-distressed homeowners looking for a federally-funded home loan modification to pay HOPE a $400-$900 up-front fee in exchange for HOPE’s home loan modifications, modification services and “software licenses.”

Among these misrepresentations detailed in the conspiracy and wire fraud charges were the claims that, with HOPE’s assistance, the homeowner was virtually guaranteed to receive a loan modification under the Home Affordable Modification Program, which is part of the Troubled Asset Relief Program (TARP) and is a federally-funded mortgage assistance program.

HOPE also claimed that it operated as a non-profit. In exchange for these up-front fees, HOPE sent its customers, including homeowners in Massachusetts, only a do-it-yourself application package, which was virtually identical to the application that the government provides free of charge, and instructed customers to fill out the application and submit it to their mortgage lender.

The HOPE customers who did use these forms to apply on their own for loan modifications had no advantage in the application process, and, in fact, most of their applications were denied. Through these misrepresentations, HOPE was able to persuade thousands of homeowners to pay more than $3 million in fees to HOPE.

Judge Zobel scheduled sentencing for July 11, 2012. Burris faces up to 20 years in prison on each wire fraud count, to be followed by three years of supervised release, a $250,000 fine, and restitution. He also faces up to five years in prison on the conspiracy count.

U.S. Attorney for the District of Massachusetts Carmen M. Ortiz; Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; and Christy Romero, Acting Special Inspector General for the Troubled Asset Relief Program (SIGTARP) in Washington, D.C. made the announcement today.

The case was investigated by SIGTARP and is being prosecuted by Assistant U.S. Attorney Adam Bookbinder of the U.S. Attorney’s Office for the District of Massachusetts Computer Crimes Unit and Mona Sedky of the Justice Department Criminal Division’s Computer Crime and Intellectual Property Section.

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