Two Oceanside men were convicted of defrauding 3,261 homeowners across the nation in a $13 million loan modification scheme through a sham law firm in Oceanside, the United States Attorney’s office said Thursday.
Dean Gregory Chandler, the former president, chief executive and attorney of 1st American Law Center, and Michael Eccles, a former manager in the firm’s telemarketing call center, received their guilty verdicts after a three-week trial and a day of deliberation.
Chandler was convicted of eight felony counts, including three counts of mail fraud, three counts of wire fraud and one count each of conspiracy and money laundering. Eccles was convicted of five counts, including conspiracy and two counts each of mail fraud and wire fraud.
“Mr. Chandler and Mr. Eccles misused and abused their positions of trust to prey upon those who were financially vulnerable and desperate to save their homes,” FBI Special Agent in Charge Eric S. Birnbaum said in a press release. “Today's convictions reaffirm our commitment to hold accountable the guilty who profit by taking advantage of vulnerable people.
Chandler created the firm in partnership with convicted drug trafficker Gary Bobel, who was separately convicted and sentenced for his role in 2009, according to evidence presented at trial. Bobel oversaw the call center and the team of telemarketers, who pitched loan modification services on behalf of the law center.
The team of attorneys would negotiate on behalf of their clients with the mortgage lenders and draft all documents to be sent to the mortgage lenders, the prosecutors say. The firm promised “attorney retainer fee” averaging $3,495 would be preserved in an attorney-client trust account until the client was satisfied, according to evidence presented at trial. If they were not satisfied, the clients were protected by a money-back guarantee.
The U.S. Attorney says the firm proceeded to funnel client’s money into other account to pay co-schemers, sales commissions and company expenses, and they failed to provide refunds to many clients who requested them.
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Eccles was later promoted to the manager of the call center in December 2009, where he fabricated more lies to suggest to clients that they could take comfort in the established success of the firm they would hire, according to trial evidence. Evidence at trial determined Chandler’s primary role was to mislead regulatory and enforcement agencies that threatened the law firm’s operations.
The defendants will next appear before United States District Judge Roger T. Benitez on February 23, 2015 for sentencing. A restitution hearing for the victims of 1st American Law Center is set for April 21, 2015.
