NL businessman receives probation for false advertising

An East Lyme man was sentenced to two years of probation on Thursday after using his New London-based media agency to produce and disseminate false advertisements, according to the U.S. attorney’s office.

Forty-six-year-old Matthew Goldreich’s sentence includes three months of home confinement as well as a $100,000 fine and $75,794 in restitution.

The federal misdemeanor to which he pleaded guilty, false advertising or misuse of names to indicate federal agency, makes it illegal to use the word “national” in the name of a business or firm that deals with loans.

According to court documents, Goldreich, owner of advertising production firm National Media Connection, used his company to produce commercials for National Mortgage Help Center, a shell company Goldreich created that existed only on paper.

The commercials in question aired between May 2009 and February 2013.

Those commercials, the U.S. attorneys’ sentencing memorandum alleges, misled viewers to believe NMHC was affiliated with the federal government in an effort to “to capitalize on the Home Affordable Modification Program ... announced by

the United States Department of the Treasury on or about March 4, 2009.”

That program encourages people and businesses to modify their mortgages in order to keep their properties out of foreclosure.

As a result of the commercials — which included tollfree numbers, boasted being able to create big cuts in interest rates and often used video clips of President Barack Obama in the background — some homeowners lost their savings and/or could lose their houses, the U.S. attorneys wrote.

In a statement emailed Thursday night, Goldreich said those homeowners’ situations likely did not occur because the homeowners incorrectly thought NMHC was affiliated with the government.

Instead, he wrote, the situations occurred because NMHC wasn’t handling people’s calls — client companies paying Goldreich’s company per call were.

“There were other statements in the commercials that, in retrospect, were deceiving because they suggested that we, not our clients, were the ones performing the actual (mortgage) modifications,” Goldreich wrote. “I thought the disclaimers in the commercials were adequate but I regret that they were not.”

Goldreich wrote that one of the clients — identified as now-defunct, California-based First One Lending Corp. in his attorney William Dow III’s sentencing memorandum — “took money from people who responded to our commercials and did not provide the services advertised.”

Court documents also identify East Coast Fidelity LLC and NPV Test LLC as clients of National Media Connection that charged fees but did not provide services.

National Media Connection’s clients allegedly stole almost $103,000 from at least 70 homeowners in increments of $175 to $5,975, according to the documents.

“National Media Connection did no (or minimal) due diligence on its clients,” the U.S. attorneys wrote. “In fact, in some instances, National Media Connection did not even know who their clients were; the clients were brought in by brokers on an anonymous basis.”

Goldreich said he “was very upset” when he learned First One, a company he said National Media Connection thought was legitimate, had scammed customers.

“This is why I voluntarily made restitution to these homeowners,” he wrote. “The last thing that I, or my company, wants is for anyone responding to our commercials to be mistreated by our clients.”

Now, Goldreich said, his company’s advertisements clearly explain that other companies handle customers’ calls. He said National Media Connection now works harder to ensure its clients “properly perform the services we promote” too.

Goldreich said his company has been in business for more than 13 years and has produced and aired hundreds of television campaigns that have generated millions of calls.

“Until this incident, we’ve never had one government censure or consumer complaint filed against us,” he wrote.

In part because of National Media Connection’s clean history and the changes it has made, Dow wrote in his memorandum that a non-incarceration sentence would be appropriate for Goldreich. The U.S. attorneys agreed with not incarcerating Goldreich because it is his first offense.

The offense carries a maximum sentence of one year in prison.