Two men were sentenced for five and twelve years for their roles in running a sham law firm out of Oceanside that ultimately robbed more than 3,000 of its clients out of more than $13 million.
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, were sentenced to 144 months and 60 months respectively. The men were convicted of defrauding 3,261 homeowners across the nation in a loan modification scheme.
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.
“The real tragedy of this case is that the defendants chose to profit from the suffering of others. In difficult economic times, they exploited a particularly vulnerable segment of our population—homeowners who were desperately trying to make ends meet and stay in their homes,” United States Attorney Laura E. Duffy said in a statement.
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.
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.