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Florida Man Pleads Guilty to Mortgage Loan Mod Scam

SIGTARP Mortgage Loan Modification FraudA Florida man pleaded guilty to fraud charges in connection with a home loan modification scam that targeted distressed borrowers, according to an announcement from Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and Stephen R. Wigginton, U.S. Attorney for the Southern District of Illinois.

Jonathan L. Herbert, 36, of Lighthouse Point, Florida, was charged in a criminal information with wire fraud, and is scheduled to be sentenced on March 27, 2015.

The information charges that Herbert operated his business from a strip mall in Fort Lauderdale, Florida, and recruited victims by way of unsolicited telephone calls in which he portrayed himself as a "federal loan officer" and his fraudulent program as being operated and approved by the federal government. Herbert told the victims that they qualified for a loan modification under his program due to either financial hardship or illegal activities on the part of their servicer or lender. Herbert then mailed information to those who expressed interest, congratulating them on qualifying for the program, quoting them a new monthly mortgage rate, and instructing them where to begin sending the payment.

The two addresses to which Herbert instructed victims to send money was located in Washington, D.C., where it was delivered to UPS mailboxes rented by Herbert and re-routed to him in Florida, according to the criminal information. None of the money went toward helping victims reduce their home loan debt; instead, Herbert put the money toward his own personal expenses and toward perpetuating the scam. The information estimates that the fraud scheme resulted in approximately $750,000 in losses for the victims.

Herbert was convicted today of operating a nationwide mortgage modification fraud scheme that he falsely claimed was affiliated with federal housing aid programs, including the Home Affordable Modification Program (HAMP)," Romero said. "Fraud perpetrated at the expense of struggling homeowners and under the guise of HAMP or other TARP program is reprehensible, and SIGTARP and our law enforcement partners will ensure that justice is served for perpetrators of these crimes."

Since Herbert's wire fraud scam involved telemarketing and many of the victims were over the age of 55, he could receive up to 30 years' imprisonment and/or a fine of $250,000 with up to five years of supervised release. He is being held without bond until his sentencing in March, according to SIGTARP.

"The criminal conduct involved in this case is truly despicable," Wigginton said. "Herbert preyed upon people who were already vulnerable due to financial hardship. By pretending that he was acting on behalf of the government and calling to help them, he stole their money and made their situations worse. The United States Attorney’s Office for Southern Illinois will aggressively prosecute individuals who commit these types of frauds."

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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