Guillermina and her husband Darko Radovanovic discuss their experience with Georggin Law to NBC 7 San Diego.
A San Diego couple plans to sue a local law firm after they claim one of its employees made promises that weren't kept.
Guillermina and her husband Darko Radovanovic look back fondly on times spent in their Oceanside home.
“We have very happy memories and those we will keep. No one can take those away from us, but it is sad, sad,” Guillermina told NBC 7.
The couple bought their dream home at the height of the housing market and tried unsuccessfully to refinance.
“I mean, I would walk out of the banks upset, crying, because we didn't want to lose our house,” Guillermina said.
Stress over bills nearly caused the couple to divorce. They decided the only option was to short sale their home and stop making payments.
“For both of us, it was really hard because I consider both of us responsible,” Guillermina said.
Darko and Guillermina wanted to buy another home, but short sellers normally have to wait at least two years to qualify for a mortgage. A lender referred the couple to Georggin Law in Oceanside, a "financial and credit advocacy" law firm. Guillermina says she spoke with a man named Eric Phillips over the phone.
“He told me he was a real estate attorney,” she said.
Guillermina says Eric Phillips told her he could take the short sale off their credit report, so they'd be in a better position to deal with lenders.
“He said that our case was very good it was an easy case that's what he said. He said we have to pay in advance.”
In January, The Radovanovic's paid nearly $3,000 in advance and signed a contract. A few weeks later, they were told by a Georggin office assistant to prepare a letter of hardship. That was the last time they heard from Georggin Law Firm.
“That's when we start calling them, ‘hey we have a few questions on this letter that we have to prepare” and that's when we didn't start hearing back from them,” said Guillermina. "Still I kept calling every day, sending emails every day, no reply.”
NBC 7 went to Georggin Law's office but the building manager said the company had moved out in June.
Their office number was disconnected. NBC 7 sent e-mails and did not hear back.
The Radovanovics are not alone. Several Georggin Law clients emailed NBC 7, saying they had paid the law firm thousands of dollars in upfront fees -- and then heard little or nothing in return.
Former Georggin employee Lindsey Esser says most of the office personnel were trying to help clients.
She started working at the firm on a Monday last April.
“By Wednesday I had 742 emails from angry people saying ‘you are in charge I want my money back,’” Esser said.
Esser said Eric Phillips told her there wasn't enough money in Georggin Law's account to pay the employees.
“My third paycheck I was asked to hold, my fourth paycheck I was asked to hold,” she said.
Esser said money was coming into the firm from clients' upfront retainer fees, but claims Phillips was using them for personal use. Esser said the firm's accountant kept track.
“Anytime that Eric had used the card for personal relief, for personal expenses it automatically documented it and she would go in and highlight it and put it under Eric health insurance, Eric gym membership, Eric truck payment, Eric alimony.”
Esser quit working at the Georggin Law Firm only five weeks after she started, she says most of the other employees went with her.
“I don't think they had any other option but to close the doors, there was no possible way for them to continue.”
NBC 7 called Eric Phillips on his cell phone.
He didn't want to go on-camera and said, "I just don't have any information, I hope everyone gets a resolution."
Phillips said he wasn't an attorney and was working as a paralegal. The Georggin Law website lists him as "Vice President and Senior Case Analyst." He did say that money from Georggin Law covered his car payments, rent and food. He also said employees were not paid on time.
The firm's owner Ernest Georggin, who is a licensed attorney, also declined an interview, only saying he had "initiated an investigation."
Under state and federal regulations, credit repair companies cannot charge up-front fees, but California law exempts licensed attorneys.
Phillips said since Georggin is a law firm, not a credit repair organization, they do not fall under the Federal Trade Commission's Rules.
Some clients believe they qualify for a refund.
“The verbiage in the contract states 100 percent guarantee, but it’s not going to happen because there's always a different avenue of approach,” Lindsey Esser said.
Georggin contracts state that retainer refunds were only to be given under specific circumstances. The contract also states the firm would "not guarantee the removal of a short sale/foreclosure.”
Still some clients say they were promised refunds.
Customer Matthew Solomon provided NBC 7 with an April 2013 voicemail from Ernest Georggin.
It stated: “Hey Matthew, this is Ernie Georggin, leaving you a message, Georggin law. I would like you to know that your payment has been approved. We intend to repay you...call for Lindsey you will be hearing from her every single week until this thing is resolved."
That message was the last time Solomon heard from anyone at Georggin Law.
The Better Business Bureau gives Georggin Law a grade of F due to "concerns regarding FTC-prohibited practices, unethical advertising and business practices."
The Radovanovic's plan on suing the Georggin Law Firm in civil court but say it's not about the money.
“I am hoping that other people kind of learn from this,” Darko Radovanovic said. “It's like shame on us we made a mistake and other people might learn from this and say before you jump into something, just do your research.”
Several clients said the FBI is conducting an investigation into the Georggin Law Firm.
A spokesperson from the agency said they couldn't confirm or deny an investigation, but told NBC 7 "we are aware of the complaints."
Eric Philips and Ernest Georggin told NBC7 they have been interviewed by an FBI agent.
Several clients also say they have filed complaints with the State Bar.