Man admits fleecing struggling homeowners

A Columbus man who told homeowners reeling from the Great Recession he could have their mortgages reduced or eliminated pleaded guilty Monday to wire fraud, money laundering and tax evasion.

Federal prosecutors said Gary Jones, 54, stole $2.2 million from about 100 clients and failed to pay about $480,000 in income taxes from 2009 to 2012. Jones’ defense said the amount was much less.

The case had been scheduled for trial this week, but Jones decided to plead guilty.

According to a complaint filed in U.S. District Court in Columbus, Jones, a managing member of 3Arck Capital, charged homeowners $4,000 to $8,000 to represent them. In exchange for what he said was a refundable fee, he would force financial institutions to acknowledge that the mortgage or foreclosure was invalid.

The mortgage would be eliminated or reduced, Jones told the homeowners, and those who lost their homes would be eligible for compensation. But no mortgages were successfully eliminated or reduced through the program, according to the complaint.

Prosecutors said Jones used the money for personal expenses and to keep the scheme going.

The complaint said Jones ran the scheme between May 2009 and September 2012, when many owners were struggling to keep their homes or lost them in foreclosures.

The maximum penalty that Jones faces is 20 years in prison and a $250,000 fine for the mail-fraud conviction. Money laundering carries a maximum of a 10-year prison term and a $250,000 fine.

The tax- evasion conviction is punishable by as long as a year in prison and a $ 100,000 fine. The Internal Revenue Service says Jones did not pay income taxes on annual income ranging from about $147,000 to more than $1 million between 2009 and 2012.

A sentencing date will be set after a pre-sentencing report is filed.