A San Diego businessman will spend nine months in prison for his part in a fake mortgage loan modification scheme that tricked more than 1,000 struggling homeowners.
Michael Nazarinia, 41, pleaded guilty to mail fraud and subscribing to a false tax return for his actions while working for Haffar & Associates, according to the U.S. Attorney’s office.
Nazarinia and co-conspirators used telemarketing to convince customers they could help them avoid foreclosure. They tricked more than 1,000 people into signing up to pay more than $3.5 million in all, federal prosecutors said.
The business was owned by attorney Mohamed Haffar, who allowed those under him to use his bar license and law firm to pull off the scheme.
The U.S. Attorney’s office said Charles Rose, another defendant, managed a call center with about 30 telemarketers. Each would read from a script written by Rose to recruit new clients.
The telemarketers were told to make blatantly false claims, like “Haffar & Associates has a 98 percent success rate,” “we have never lost a home to foreclosure” and “we have a 100 percent money-back guarantee,” according to prosecutors.
However, Nazarinia admitted in his guilty plea that the business did not have anything close to a 98 percent success rate getting loan modifications. According to the U.S. Attorney’s office, Haffar & Associates did not have staff experienced enough to even complete the loan modifications.
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Many of their customers, learning that the company was not doing its job, never received their requested refunds. Even as employees failed to get the loan modifications, the telemarketers were still on the phones, trying to get new clients, prosecutors said.
Nazarinia admitted to creating a fake lease agreement which was used to delay eviction for clients after Haffar & Associates failed to negotiate a modification. The defendant also said he filed a false 2010 income tax return, leaving out almost $41,486 in illegal income from the business.
Nazarinia was in charge of the “case managers,” who worked with the banks to submit and approve loan modifications. Investigators later discovered that although they were using Haffar’s legal authority, Haffar rarely gave input or direction on the managers’ legal services.
When Haffar & Associates stopped doing business, Rose and Nazarinia started another company that sold a product they said would “facilitate mortgage lenders’ review of homeowners applications for loan modifications,” said the U.S. Attorney’s office.
Rose admitted to making false statements to get clients to sign up and pay fees.
“Using the guise of a law office and a legal team, the defendants preyed upon financially desperate homeowners struggling to keep a roof over their head,” said Erick Martinez, Special Agent in Charge of IRS Criminal, in a statement. “As today’s sentencing shows, those who find ways to profit by taking advantage of distressed homeowners and fail to report the income will be brought to justice.”
Along with Nazarinia, Rose and Haffar have both pleaded guilty in their scheme. Rose will be sentenced in April. Haffar was disbarred in 2012, was ordered to reimburse $192,000 to former clients and was sentenced to three months in prison in January 2015.
A fourth defendant, Stacy Tuers, admitted he knew the telemarketers were lying to potential customers but continued to sell Haffar’s loan modification services. Tuers pleaded guilty to tax charges in May 2015 and will be sentenced in March.
Ed. Note: A previous version of this article incorrectly stated Mr. Nazarinia failed to report $100,000 to the IRS as initially described by federal prosecutors. The amount underreported was $41,486 according to the U.S. Attorney’s Office. The article has been updated and we regret the error.
