Two headed to jail for massive mortgage scam

by Ryan Smith30 Apr 2015
Two California men are headed to prison for their roles in a far-reaching loan modification scheme that defrauded more than 3,000 victims across the country.

Dean Gregory Chandler, 50, was sentenced to 12 years in prison for crimes he committed during his tenure as the head of 1st American Law Center, according to a report in the Seaside (Calif.) Courier. One of his ex-employees, 35-year-old Michael Eccles, was sentenced to five years. Both were convicted last fall of conspiracy and fraud. Chandler was also convicted of money laundering.

Prosecutors said Chandler partnered six years ago with convicted drug trafficker Gary Bobel to create 1st American, according to the Courier. Bobel oversaw a call center that marketed the company’s loan modification scheme. In the scam, telemarketers – including Eccles – falselypromised homeowners that only qualified applicants would be approved as clients of the firm, that an “attorney retainer fee” of about $3,500 would be held in trust until clients were satisfied with their service, and that clients were protected by a money-back guarantee.

When Eccles became manager of the call center in 2009, he wrote scripts containing additional lies for the temlemarketers to tell clients, the Courier reported. 1st American falsely claimed that it had been in business since 1992, that it had helped more than 100,000 homeowners, and that it had successfully modified loans for more than 20 years.

In reality, the firm didn’t modify three out of every four loans it took on, and homeowners payments to the firm were used to enrich Chandler, Eccles and their co-conspirators. Chandler’s real role at the firm was to mislead regulatory and enforcement agencies – a role which earned him more than $275,000 over the course of 14 months, the Courier reported. After FBI and IRS agents served a search warrant on the company’s offices in 2010, Chandler also allegedly siphoned $16,500 from one of the firm’s bank accounts to use for his own benefit.

Thirteen people so far have been convicted for taking part in the fraud.


Should CFPB have more supervision over credit agencies?