Judgment issued in home loan scam
The Hoffman Law Group, 4 affiliates held culpable for $27.7M in bogus foreclosure relief operation.
Ten months after state and federal law enforcement officials raided and shut The Hoffman Law Group on U.S. 1 in North Palm Beach, a federal judge has entered a $27.7 million judgment against the firm and four affiliated companies that operated a foreclosure relief scam.
Hoffman and the affiliates are accused of using deceptive marketing practices and scamming approximately 2,000 consumers who paid at least $12.6 million in a loan-modification fraud, the judgment states. The firm took upfront fees of $6,000 and monthly payments of $495 to add financially strapped homeowners to so-called “mass joinder” lawsuits.
In July 2014, the Florida Attorney General’s Office and the Consumer Financial Protection Bureau filed a federal complaint against the law firm, as well as Nationwide Management Solutions LLC, Legal Intake Solutions LLC, File Intake Solutions LLC and BM Marketing Group. Also named in the complaint were the firm’s lead attorneys, Marc Hoffman, Michael Harper and Benn Willcox.
“Scamming homeowners worried about losing their homes is not only illegal, it is despicable, and thanks to the great work of my consumer protection division and the Consumer Financial Protection Bureau, these defendants will pay for preying on Florida homeowners facing foreclosure,” Florida Attorney General Pam Bondi said in a statement Friday.
The final judgment U.S. District Judge James Cohn issued found the corporate defendants liable for more than $11.7 million.
A receiver who took over the defendants’ operations and froze the companies and individuals’ assets will pay $655,737 to the Consumer Financial Protection Bureau to compensate victims. However, the balance of the $11.7 million was suspended because it is deemed uncollectable.
The defendants also must pay a $10 million civil penalt y for violating Regulation O, formerly known as the Mortgage Assistance Relief Services rule, and a $6 million penalt y for violation of the Florida Deceptive and Unfair Trade Practices Act. The receivership does not currently have enough money to pay those penalties.
The companies have been permanently dissolved and can no longer operate. The individual defendants are permanently banned from, among other things, advertising or selling any mortgage assistance relief product or service or any debt relief product or service.