Operator of Mortgage Motification Scam Gets 90 Months in Prison

Howard R. Shmuckler, 68, of Virginia, was sentenced yesterday to 90 months in prison, followed by three years of supervised release, for running a fraudulent mortgage-rescue business that received substantial fees but only modified clients' mortgages in a few cases, according to release from the ""Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)"":http://www.sigtarp.gov/Pages/home.aspx.

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""Mr. Shmuckler is a cunning criminal who took advantage of distressed homeowners in desperate need of help,"" said U.S. Attorney Neil H. MacBride. ""Today's sentence should send a clear warning to other fraudsters of the heavy price they will pay for preying on vulnerable people looking for help to save their homes.""

On April 10, Shmuckler pled guilty to six counts of wire fraud. According to court records, Shmuckler, a convicted felon and disbarred attorney, owned and operated a Vienna, Virginia, mortgage-rescue business known as The Shmuckler Group (TSG). From June 2008 through March 2009, TSG took in nearly $2.8 million from approximately 865 clients whose mortgages were in distress and who came to TSG looking for relief. In reality, TSG was able to obtain relief for approximately 4.5 percent of its clients.

""At a time when homeowners across the nation are struggling to keep their homes, Shmuckler actively targeted the most vulnerable of them with his mortgage modification scam,"" Christy Romero, special inspector general of SIGTARP, said. ""Shmuckler exploited homeowners desperately seeking support through federal housing programs such as HAMP by essentially guaranteeing the homeowners mortgage modifications in exchange for an upfront fee.

Court records indicate that Shmuckler instructed clients to terminate contact with their mortgage companies and to stop making payments to their lenders. TSG never facilitated a modification of the mortgages referenced in the statement of facts filed with his plea agreement.

In addition, the court ordered that this sentence be served consecutive to a 75 month federal sentence Shmuckler received on April 5, in Washington, D.C., involving a counterfeit check scheme.

This case was investigated by SIGTARP, the FBI's Washington Field Office, and the FDIC-OIG. SIGTARP investigates fraud, waste, and abuse in connection with the Trouble Assisted Relief Program.