Law Enforcement

SAN FRANCISCO -- Attorney General Kamala D. Harris and Sonoma County District Attorney Jill Ravitch today announced the arrest of a Petaluma man who stole more than $20 million from dozens of investors in a Ponzi scheme.

Aldo Joseph Baccala, 71, was charged with 167 felony counts of grand theft, securities fraud and elder abuse. He has also been charged with a number of enhancements, which indicate that he engaged in a pattern of theft and fraud related crimes which resulted in a loss of over $3.2 million. Baccala’s bail has been set at $2 million and he is being held at the Sonoma County Adult Detention Facility.

“This Ponzi scheme caused dozens of investors to lose their money through false promises and sham investments,” Attorney General Harris said. “It is important to protect Californians from criminals who use deceptive tactics for personal gain.”

“Through this joint prosecution effort, we intend to seek justice for Sonoma County residents who suffered tragic losses in a fraudulent scheme,” said District Attorney Ravitch.

The arrest declaration alleges Baccala used his Petaluma-based company, Baccala Realty, Inc., to raise millions of dollars from more than 50 investors for ventures in California and other states, such as assisted living facilities, a car wash and other businesses.

Victims of the scheme, many of whom are elderly and who had known Baccala and his family for many years were promised annual returns of 12 percent or more to invest in a specific project which was supposed to be secured by a first or second deed of trust on the property. In fact, none of the promised deeds of trust were ever recorded, and the funds raised were not used as promised.

Baccala also allegedly used money obtained by investors to invest in the stock market and to cover margin calls and stock trading losses. From 2003 to 2008, he lost approximately $8 million in the stock market. As his debts grew, he began promising new investors annual returns of up to 27.5 percent to cover interest payments to earlier investors.

In November 2008, Baccala issued letters to investors saying that he would no longer make promised monthly payments. After receiving numerous complaints, the Sonoma County District Attorney’s Office launched an investigation into Baccala Realty, Inc. in January 2009.

The Sonoma District Attorney’s office was assisted in the investigation by the Attorney General’s office, and the case will be jointly prosecuted.

Victims in this case may obtain more information at http://da.sonoma-county.org/content.aspx?sid=1023&id=2531

LOS ANGELES -- Attorney General Kamala D. Harris today announced that two Los Angeles residents have each been sentenced to 300 days in county jail and 3 years probation for selling counterfeit CDs containing popular music.

Juan Lucas Camacho, 39, and Jose Pablo Almaraz, 38, each pled guilty to one felony count of failure to disclose the origin of a recording that they offered for sale. Camacho had been convicted in 2008 for a similar crime. They were sentenced on May 21 in Los Angeles Superior Court.

“Copyright theft like this infringes upon the rights of writers, musicians, and producers,” said Attorney General Harris. “California’s eCrime Unit is dedicated to prosecuting cases involving the trafficking of intellectual property, whether online or on the street.”

The charges are based on the sale of 800 counterfeit CDs to undercover Department of Justice agents on April 17, 2012 in the parking lot of a Los Angeles Home Depot store for $480, or approximately $.60 per CD. Artists whose counterfeit CDs were sold included Jorge Santa Cruz and Pitbull. Camacho claimed the ability to fabricate 80,000 to 100,000 CDs per week and that 800 CDs was too small of a sale to repeat.

In April, the defendants were arrested and charged with five felony counts, including conspiracy and counterfeit of a registered trademark. Upon admitting guilt, the remaining counts were dismissed as part of a plea agreement. Camacho was given credit for 36 days already served, and Almaraz for 19 days served.

This case was investigated and prosecuted by the Department of Justice’s eCrime Unit, which identifies and prosecutes crimes involving technology and identity theft.

Photos of the pirated CDs are attached to the electronic version of this release at http://oag.ca.gov/

FRESNO -- Attorney General Kamala D. Harris today was joined by Fresno County Sheriff Margaret Mims, Merced County Sheriff Mark Pazin, Tulare County Sheriff Bill Wittman, and Fresno Police Chief Jerry Dyer at a press conference in support of the California Homeowner Bill of Rights, which contains law enforcement tools to help prevent blight and other crimes associated with the foreclosure crisis.
Attorney General Harris also presented Attorney General Awards to distinguished officers from the Visalia Police Department, Fresno Police Department, the California Highway Patrol (Madera area), Kings County District Attorney’s Office and the California Department of Corrections and Rehabilitation.

The press conference occurred after at a regional “zone” meeting, where law enforcement leaders discussed common challenges and collaboration. Zone 5 includes law enforcement agencies from Fresno, Kern, Kings, Madera, Mariposa, Merced and Tulare counties.

“As I meet with law enforcement leaders around the state, I repeatedly hear of their frustrations dealing with the aftermath of our foreclosure crisis and crime that is associated with it,” said Attorney General Harris. “I am gratified by the support of these Central Valley law enforcement leaders for the California Homeowner Bill of Rights, and look forward to the public safety enhancements it will bring.”

“Attorney General Harris’ proposed legislation provides increased enforcement capabilities, due process for homeowners, and gives local law enforcement additional tools to avoid blight as a result of empty homes left vacant as a result of foreclosures. I am pleased to be able to join her and support the California Homeowner Bill of Rights,” said Sheriff Margaret Mims of Fresno County.

“All Californian’s should be appreciative of these bills the Attorney General is trying to pass as they will help prevent foreclosure abuses, especially here in Merced where we ranked among some of the nation’s highest foreclosed homes,” Merced Sheriff Mark N. Pazin said.

“As the Sheriff of Tulare County, I have seen firsthand the devastating effects of the mortgage crisis, not only in Tulare County but across the State of California. In Tulare County alone, between 2008 and 2011 there were over 11,000 foreclosures. The California Homeowner Bill of Rights will assist homeowners and law enforcement agencies by providing additional resources and tools to identify and fight a multitude of crimes related to mortgage fraud, real estate fraud, and loan scams. I fully support the California Homeowner Bill of Rights,” Tulare County Sheriff Bill Wittman said.

The California Homeowner Bill of Rights, which would bring transparency and fairness to California’s broken mortgage process, is under consideration in the Legislature and includes proposals to help law enforcement respond to mortgage fraud and to crime associated with the foreclosure crisis.

These bills would empower communities to crack down on blight and the resulting crime, would support law enforcement responses to mortgage fraud by extending the statute of limitations, and would empower the Attorney General to empanel a special grand jury to target multi-jurisdictional financial crimes.

The California Homeowner Bill of Rights will also extend to all borrowers many of the same reforms negotiated for in the recent national mortgage settlement. The legislation includes protections against the dysfunctional “dual-track” foreclosures process, guarantees of a single point of contact for distressed homeowners, and an increase in penalties for robo-signing. The multistate mortgage settlement brought a commitment of up to $18 billion for California homeowners and foreclosure victims from banks.

Foreclosure-related estimates for each county in the zone are:

Fresno County:
Number of foreclosures 2008-2011: 27,837
Estimated amount of California commitment: $311,015,043

Kern County:
Number of foreclosures 2008-2011: 35,893
Estimated amount of California commitment: $374,504,344

Kings County
Number of foreclosures 2008-2011: 2,139
Estimated amount of California commitment: $24,288,347

Madera County
Number of foreclosures 2008-2011: 7,005
Estimated amount of California commitment: $84,307,143

Mariposa County
Number of foreclosures 2008-2011: 238
Estimated amount of California commitment: $6,761,727

Merced County
Number of foreclosures 2008-2011: 18,229
Estimated amount of California commitment: $215,723,069

Tulare County
Number of foreclosures 2008-2011: 11,269
Estimated amount of California commitment: $119,124,870

NEVADA COUNTY – The Department of Justice-led Mountain and Valley Marijuana Investigation Team (MAVMIT) served four state search warrants which resulted in the seizure of more than 500 marijuana plants and 50 pounds of processed marijuana, and the arrest of five individuals involved in a large scale indoor marijuana growing operation.

The investigation targeted a drug trafficking organization (DTO) involved in a large-scale, illegal indoor marijuana growing operation in Nevada County which was cultivating marijuana inside large green houses and supplying processed marijuana to dispensaries in the Los Angeles area and Arizona.

During the operation, which began in January 2012, agents served four state search warrants at four locations in the Penn Valley and Smartsville areas. The investigation has resulted in five arrests, and the seizure of more than 500 mature marijuana plants, 50 pounds of processed marijuana, two loaded firearms (one semi-automatic handgun and one revolver), more than 870 rounds of ammunition, and small amounts of cocaine and methamphetamine. Agents also froze 10 bank accounts belonging to the individuals arrested and seized approximately $15,000 in U.S. currency. Those arrested during Tuesday’s operation have been booked into the Nevada County Jail and currently face state charges ranging from possession of marijuana for sale, cultivation of marijuana, and a felon in possession of a firearm. Joseph Axtell and Eric Moffatt are convicted felons. Those arrested include:

Joseph William Axtell of Penn Valley ($1 million bail), DOB: 1/16/57; Eric Steven Moffatt of Smartsville, DOB: 6/16/63; Lesley Nemeth of Penn Valley ($500,000 bail), DOB: 5/4/61; Jinny Janow of Smartsville, DOB: 4/15/71; and Jeff Santos of Penn Valley, DOB: 3/20/80.

Photos of items seized during Tuesday’s operation are attached to the electronic form of this press release at www.oag.ca.gov.

The investigation is a collaborative effort led by California Department of Justice Mountain and Valley Marijuana Investigation Team, and assisted by the California Department of Corrections and Rehabilitation, Nevada County Sheriff’s Department, Placer Special Investigations Unit and Yolo Narcotic Enforcement Team.

SAN JOSE -- Attorney General Kamala D. Harris announced the arrest of 12 individuals involved in a Bay Area heroin trafficking ring by the Department of Justice-led South Bay Metro Task Force and U.S. Immigration and Customs Enforcement's Homeland Security Investigations (ICE HSI).

State and federal investigators arrested 12 suspects and seized 9 guns and small amounts of marijuana and methamphetamine today, as a result of a long-term investigation called “Operation Middle Man.”

The execution of the search and arrest warrants today marks the culmination of a two and half year investigation dubbed “Operation Middle Man” because the initial targets identified during the case were found to be mid-level operatives. Those suspects ultimately led authorities to Carlos Jose Moreno, the suspected head of a transnational criminal drug trafficking organization.

“Transnational gangs have become a top public safety threat as they increasingly traffic guns, drugs and human beings into California,” said Attorney General Harris. “I commend the members of the South Bay Metro Task Force and Homeland Security Investigations for their work in identifying and arresting these gang-affiliated suspects”

The operation is part of an ongoing effort by Attorney General Harris designed to attack gang violence and transnational gangs. The South Bay Metro Task Force is one of 28 California Department of Justice led task forces that coordinate the response to our state’s growing gang and drug trafficking problems. Operation Middle Man was initiated to disrupt and dismantle the Santa Clara County-based Carlos Jose Moreno drug trafficking organization (DTO), and to arrest and prosecute its members.

“By combining our resources, authorities and expertise, we’ve succeeded in dismantling a drug ring suspected of funneling significant quantities of heroin into the Bay Area and onto our streets,” said Clark Settles, special agent in charge for ICE HSI San Francisco. “This case shows yet again why federal and state collaboration is crucial to promoting public safety and protecting the welfare of our communities.”

“This multi-jurisdictional investigation is one example of our successful efforts to dismantle violent drug trafficking organizations that threaten our community,” said Santa Clara County District Attorney Jeffrey F. Rosen.

Utilizing undercover officers and other investigative techniques, agents purchased more than three pounds of heroin. The investigations targeted Carlos Jose Moreno, a large-scale heroin and methamphetamine distributor in the San Jose, East Palo Alto, Palo Alto and Redwood City areas. Moreno’s DTO imported narcotics through international and national drug trafficking sources for the purpose of redistributing the drugs through California and the United States. The heroin was imported from sources in Mexico, while the crystal methamphetamine was manufactured in the Central Valley area of California. The Moreno DTO is comprised of Norteño gang members with connections to Mexico.

During the operation, which began in December 2009, agents served 12 state arrest warrants and six state search warrants in the East Palo Alto, Hayward and Oakland areas. To date, the investigation has resulted in 12 arrests, and seizure of 9 guns (three shotguns, three rifles and three handguns), and small amounts of marijuana and methamphetamine. Those arrested during Tuesday’s operation will be booked into the Santa Clara County Jail and face state charges ranging from conspiracy, residential burglary, firearms sales, sale of methamphetamine and heroin and gang enhancements. They include:

Jose Izabel Moreno of Palo Alto, DOB: 4/2/1986; Pearl Moreno of Palo Alto, DOB: 3/17/85; Johnny Chavez of Palo Alto, DOB: 3/5/1991; Pedro Chavez Chavez of Mexico, DOB: 6/17/1975; Jose Arreguin of Palo Alto, DOB: 4/5/1991; Daniel Macias of Mexico, DOB: 2/4/1989; Jose Macias of Palo Alto, DOB: 3/28/1987; Carlos Moreno, DOB: 8/3/1983: Elizabeth Kovac of Palo Alto, DOB: 5/25/1988; Joventino Lopez-Ortiz of Palo Alto, DOB: 9/5/1993; Victor Hernandez of Palo Alto, DOB: 1/8/1989; and Edgar Enrique Bustos of Palo Alto, DOB: 3/4/1994.

Photos of weapons seized during today’s operation are attached to the electronic form of this press release at www.oag.ca.gov.

The investigation is a collaborative effort led by California Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and assisted by, Santa Clara District Attorney’s Office, and San Mateo County Narcotics Task Force.

SAN DIEGO -- Attorney General Kamala D. Harris and San Diego County District Attorney Bonnie Dumanis today announced the arrest of an individual who ran a sophisticated scheme at San Diego area Lowe’s and Home Depot stores in which he replaced the bar codes on expensive merchandise with bar codes that scanned at lower prices.

Steve Allen Koski, 42, of San Diego, was arraigned yesterday in San Diego Superior Court on 11 felony counts, including grand theft and 10 counts of burglary. His bail has been set at $250,000. He is being held in San Diego County Jail.

Koski stole or attempted to steal more than $30,000 in copper wire and other merchandise from Lowe’s and Home Depot stores. He then re-sold that merchandise to California recycling centers for over $180,000.

“For all the efficiency and conveniences that modern technologies provide, we are continuing to see criminals use these same technologies to defraud California businesses and consumers,” Attorney General Harris said. “The eCrime Unit is devoted to aggressively pursuing criminals who misappropriate modern technologies for their own benefit.”

Surveillance video showed Koski entering various home improvement stores and replacing legitimate bar codes on copper wire and other expensive merchandise with counterfeit bar codes that scanned at lower prices. Through this scheme, Koski fraudulently purchased copper wire for $60 to $90 and then re-sold it at California recycling centers for $200 to $300. To appear legitimate and sidestep the State’s efforts to crack down on recycling fraud, Koski created a phony business called “iRecycle”. The evidence suggests Koski may have netted over $180,000 through this scheme.

In February, the Attorney General’s eCrime Unit launched an investigation after Lowe’s reported to the offices of the Attorney General and the San Diego District Attorney that Koski ran this scheme at multiple stores throughout San Diego.

“Our office is holding Steve Allen Koski responsible for his actions,” said San Diego County District Attorney Bonnie Dumanis. “We do not tolerate scams and we are aggressive about prosecuting perpetrators who think they can get away with bilking businesses and consumers.”

California is among the top five states with the highest reported incidences of copper theft. The National Insurance Crime Bureau reports 1,342 metal theft claims in California from January 2009 to December 2011, with approximately 96% of these claims pertaining to the theft of copper.

Last year, Attorney General Harris created the eCrime Unit to identify and prosecute identity theft crimes, cyber crimes and other crimes involving the use of technology. More information available here: http://oag.ca.gov/cybersafety.

A copy of the complaint is attached to the online version of this release at www.oag.ca.gov

RIVERSIDE -- Attorney General Kamala D. Harris announced today that two men were sentenced to more than 30 years in state prison for stealing millions of dollars through an illegal pyramid scheme and phony stock sales.

In April 2011, James A. Sweeney, II, 64, of Afton, Tennessee, and Patrick M. Ryan, 35, of Canyon Lake, California, were found guilty on 65 counts of grand theft and securities fraud. Sweeney was sentenced to 33 years in state prison and Ryan to 31 years in state prison today in Riverside County Superior Court. Each was ordered to pay restitution of approximately $8.2 million.

Sweeney and Ryan, co-founders of Riverside-based Big Co-op, Inc., stole approximately $8.2 million from more than 1,000 Californians through an illegal pyramid scheme and phony stock sales.

Big Co-op, also operating as Ez2Win.biz, purported to be an online shopping hub where consumers could go to purchase goods and services at discounted prices from big-name retailers including, Sears, Target and Macy’s.

From 2005 to 2006, Big Co-op generated $1.2 million in revenues through an illegal pyramid scheme. Consumers were informed that if they purchased a Big Co-op membership, they could save money on their own purchases plus earn commissions and rewards by convincing others to shop at the site. In reality, consumers never received rebates or rewards. Instead, their monetary gains were based on recruiting others to purchase memberships, and having those purchasers recruit others to purchase memberships (and so on).

Individuals who were recruited paid Big Co-op between $19.95 and $99.95 in monthly membership fees to be part of the Ez2Win.biz pyramid scheme.

In addition to the pyramid scheme, the two men sold phony stock in Big Co-op as a stand-alone investment.
At seminars and meetings across California, Sweeney and Ryan pitched Big Co-op as the future of online commerce, compared it to Google and EBay, and falsely informed investors the company was turning huge profits. Investors were also told that an initial public offering (IPO) was imminent and that when the company went public, the stock would double or triple and their investment could climb to well over $100 per share.

In reality, Big Co-op was never profitable, there was not an impending IPO, and the only significant revenue generated was as a result of the sale of phony stock and the payment of membership fees for the pyramid scheme.

Sweeney and Ryan sold shares for $0.50 to $5 and offered two-for-one deals to investors willing to pay cash. From 2005 to 2006, they took in more than $7 million from this scheme.

With investor cash, Sweeney and Ryan bought homes, country club memberships, several luxury cars, and ran up $30,000 to $50,000 in monthly credit card bills. Investor funds were also used to pay for an elaborate bachelor party in Las Vegas, a $23,000 wedding ring and a $100,000 wedding.

In October 2006, after receiving numerous complaints, the California Department of Corporations issued a desist and refrain orders against Sweeney, Ryan and other associates directing them to cease selling stock in the company. In May 2007, a second order directed them to cease selling memberships in the company. At that time, the case was referred to the Attorney General’s office for prosecution.

The case was prosecuted by Deputy Attorney General Patricia M. Fusco, with assistance from lead investigator Andy Thomas, both of the Special Crimes Unit.

SAN FRANCISCO -- Attorney General Kamala D. Harris today announced that Gervork Aroutiounyan, 48, was sentenced for an ATM identity theft scam that spanned seven counties.

Aroutiounyan and Gnel Snapyan, 35, were charged for “skimming” debit card information of Chase Bank customers and stealing $320,728. The Department of Justice eCrime Unit was able to charge the entirety of the scheme across seven counties, including the counties of Santa Clara, Marin, Fresno, San Bernardino, San Diego and Los Angeles.

Aroutiounyan was sentenced today in San Luis Obispo County Superior Court to three years and eight months in state prison, and ordered to pay restitution to Chase Bank of $320,728. The sentencing of Snapyan was delayed until June 15.

“These criminals stole not just money, but people’s identity,” said Attorney General Harris. “While modern technology provides many advantages, it is also increasingly being used by criminals, which is why I created the eCrime unit within the Department of Justice.”

In September 2011, the Attorney General’s office charged the defendants with 28 counts of felony fraud. On March 1, the defendants entered a plea of guilty to one count of conspiracy to commit grand theft, computer access fraud, identity theft, second degree burglary and forgery of access cards. Additionally, each plead guilty to three counts of second degree burglary.

Between July 2010 and February 2011, Aroutiounyan and his co-conspirator replaced the card readers at Chase Bank ATM vestibules. The readers they installed allowed them to retrieve the card information of customers using the ATM. Additionally, the crew installed micro cameras to capture the card holders’ PIN entry. With both the card information and the PIN information, they created bogus ATM access cards. These cards were used to fraudulently withdraw $320,728. This type of crime is frequently referred to as a “skimmer operation.”

Chase Bank has reimbursed customers for their losses. The case was investigated by the San Luis Obispo County Police Department.

The California Department of Justice eCrime unit was created last year to identify and prosecute identity theft crimes, cyber crimes and other crimes involving the use of technology.

SACRAMENTO – Attorney General Kamala D. Harris and El Dorado County District Attorney Vern Pierson today announced the arrest of a retired El Dorado County Deputy Sheriff who over six years embezzled more than $300,000 from the El Dorado County Deputy Sheriff’s Association.

Donald Philip Atkinson, the former El Dorado County Deputy Sheriff's Association (DSA) president, was arrested today on 44 felony counts, including embezzlement by public or private officer, grand theft, forgery and perjury.

An investigation by the El Dorado County District Attorney’s Office with assistance from the Attorney General’s Office showed that Atkinson falsified official documents, including Fair Political Practice Commission forms, submitted forged documents to DSA and claimed checks were written for charitable purposes but pocketed the money. The investigation was conducted after a request from the El Dorado County Sheriff’s Office.

Atkinson used DSA funds to open bank accounts in his name and submitted forged documents to the DSA to justify payments made to him and his companies.

Atkinson also provided falsified records indicating that checks for more than $20,000 were written for charitable purposes, including a donation for the families of four murdered Oakland police officers. None of the named organizations and individuals received donations from either Atkinson or the DSA.

Several checks drawn from the DSA general fund and signed by Atkinson were used to pay rent for an apartment occupied by a woman with whom he was in a relationship.

Atkinson was also charged with theft from an elder or dependent adult. The victim loaned $100,000 to Atkinson to purchase a photography business from a man with cancer. Atkinson had falsified information in the contract he signed, and bank records indicate that none of the victim’s funds were spent for the purpose Atkinson had claimed.

The case was investigated by the El Dorado County District Attorney’s Office with support from the Attorney General’s Office.

A copy of the complaint is attached to the online version of this release at www.oag.ca.gov.

SACRAMENTO -- Attorney General Kamala D. Harris today announced the arrests of the owners and managing attorney of a law firm that took thousands of dollars in up-front loan modification fees for services that were never performed for homeowners, many of whom ended up losing their homes.

Gregory Flahive of El Dorado Hills, 39, Cynthia Flahive of Folsom, 41, and Mike Johnson of Elk Grove, 42, were arrested today on 19 felony counts, including grand theft by false pretense, conspiracy and false advertising. They were booked at the Sacramento County Jail with bail set at $50,000 bail each.

“Homeowners facing foreclosure are being targeted by predators, including those who use their law license to gain credibility and scam innocent Californians,” Attorney General Harris said. “My office’s Mortgage Fraud Strike Force is dedicated full-time to cracking down on these deceptive practices and protecting homeowners from fraud like this.”

Gregory and Cynthia Flahive, ex-spouses and owners of Flahive Law Corporation, and Johnson, the firm’s managing attorney, took up-front fees of up to $2,500 from homeowners in Placer, Sacramento, Butte and Yuba counties for loan modification services that were never performed. In California, it is illegal for foreclosure consultants to collect money for services before they are performed.

The Folsom-based law firm advertised their services on flyers, radio and televised infomercials, offering to provide loan modification services and help clients with bankruptcy, IRS tax relief and credit card modification.

In a 2010 infomercial, the Flahives said that, as a law firm, they had “extra leverage” with the banks. They described one of their unique services as a “mortgage violation audit” in which they reviewed a client’s loan documents to find bank violations that could be used as leverage to modify a client’s home loan.

In fact, the investigation revealed that, in some instances, the client’s lender had no record of contact with the Flahive Law Corporation.

Former clients of the Flahive Law Corporation filed complaints with the Attorney General’s office, as well as with the Better Business Bureau and the State Bar of California.

The State Bar of California launched an investigation, which was turned over to the Attorney General’s Mortgage Fraud Strike Force in summer 2011.

In one example of the firm’s deceptive practices, a victim who sought to lower his mortgage payments was told by Gregory Flahive to reject his lender’s offer of modification. The homeowner was told the Flahive Law Corporation could secure a better interest rate, reduce his principal, and possibly get his second mortgage eliminated. Four months later, the victim lost his home to foreclosure.

Agencies that assisted in serving today’s search and arrest warrants include the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Folsom Police Department, the Rancho Cordova Police Department and the El Dorado Sheriff’s Department.

“SIGTARP and its law enforcement partners are shutting down mortgage modification fraud, and holding a degree in law will not be a sufficient defense against prosecution,” said Christy Romero, Deputy Special Inspector General for SIGTARP.

Attorney General Harris formed a Mortgage Fraud Strike Force in May 2011 to investigate and prosecute mortgage fraud. In August, the Strike Force filed its first suit against a law firm that took millions from desperate homeowners: http://oag.ca.gov/news/press_release?id=2552&y=&m=. In December, a Strike Force investigation led to the arrests of three officers of a Stockton real estate company who ran a scam similar to that of Flahive Law Corporation. http://oag.ca.gov/news/press_release?id=2586&y=2011&m=

The investigation showed that the Flahive Law Corporation processed loan modifications for hundreds of Californians – and investigators believe there may be more victims in this case. If you are a former client of the Flahive Law Corporation, or if you want to report fraud or file a complaint, visit http://oag.ca.gov/consumers/loan-modification.

Photos are available from the Press Office. Please contact (415) 703-5837.