California Attorney General Jerry Brown today announced a $1.1 million judgment against a Los Angeles-based lawyer who collected thousands of dollars from filing frivolous lawsuits on behalf of desperate homeowners facing foreclosure.
Investigators accused attorney Mitchell Roth and Paul Noe, the owner of Nevada-based United First, Inc., of scamming over 2,000 homeowners with fraudulent mortgage services.
Struggling homeowners were told that if they hired Roth to argue their cases in court, they could lower or eliminate their mortgage debt and save their homes, investigators said.
Noe, who was previously convicted of wire fraud, operated the company and handled client solicitations, while Roth provided legal services, the Attorney General's office reported.
"Roth promised foreclosure relief through aggressive litigation, but the frivolous and phony lawsuits he filed instead left 2,000 desperate homeowners in even greater debt," Brown said. "This settlement forces Roth to pay $1.1 million and prohibits him from ever again preying on new victims."
Homeowners were charged about $1,800 in up-front fees, up to $1,250 each following month, and 50 percent of the cash value of any settlement, authorities said.
Authorities alleged Roth filed lawsuits on behalf of homeowners, and afterward would often fail to make required court filings, respond to legal motions, comply with court deadlines or appear at court hearings. Investigators said Roth simply tried to extend the lawsuits as long as possible to collect additional monthly fees from clients.
Not a single homeowner who had hired Roth won a court case or had their mortgage debt lowered or eliminated, Brown said.
The attorney general's lawsuit alleged that Roth, Noe and United First engaged in unfair competition, made untrue and misleading statements and violated California's credit counseling and foreclosure consultant laws.
The settlement announced today requires Roth to pay defrauded homeowners $1 million in restitution plus $125,000 in penalties. Brown's office continues to pursue the case against Noe and United First.
Homeowners who were defrauded or victimized by any foreclosure rescue scam, should contact Brown's office at 1-800-952-5225 or file a complaint online at: http://www.ag.ca.gov/consumers/general.php.