As if the looming avalanche of foreclosures in the United States isn’t bad enough, the Federal Bureau of Investigations (FBI) announced on Wednesday that they have filed charges against an Ohio man, alleging that he was involved in a scheme that defrauded unsuspecting homeowners of hundreds of thousands of dollars with a false promise of saving them from foreclosure.
James A. Warsing of Ashtabula, Ohio, was indicted on eight counts of Mail Fraud. The indictment claims Warsing, operating as WJW Enterprises, bilked $500,000 from people using a promise to use the money to settle their foreclosure cases, but instead converted the money to his personal use. The indictment claims these activities took place between 2001 and 2005.
This is not Warsing’s first brush with the law. In October 2004, Ohio Attorney General Jim Petro charged Warsing with violations of Ohio’s Consumer Protection laws. Warsing was convicted of those charges in June 2006, and was ordered to make restitution to 18 people, as well as to pay fines totally $300,000.
"Homeowners deserve to be protected from unscrupulous business practices," Petro said. "It was unconscionable for Mr. Warsing to take advantage of people already down on their luck, and we're pleased he has been brought to account for it."
Petro said Warsing was running a “Foreclosure Rescue” scam, in which Warsing through his company would offer to settle or stop a foreclosure action, for a fee, but instead pocket the fees that ran from $3,000 to $5,000 and do nothing.
Such “foreclosure rescue” scams have become more commonplace in the past decade according to a report from the National Consumer Law Center, a consumer advocacy agency based in Boston. “This is a uniquely bad collision of the financial stresses on homeowners with a boatload of bad ways for them to be conned into losing their homes or the equity in them,” says NCLC’s Steve Tripoli, principal author of the report.
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