Mortgage Relief Scammers Fined $2.2 Million by FTC

Mortgage relief scammers caught by FTCTwo companies and a trio of related mortgage relief scammers have been fined more than $2 million by the Federal Trade Commission for swindling homeowners facing foreclosure.

Under a settlement with the FTC, David Botton, his sister April Botton Krawiecki, their father Samy Botton, Kirkland Young LLC and Attorney Aid LLC been all been banned from the mortgage relief services business. The defendants have also agreed to surrender $2.2 million in assets to refund consumers defrauded by their mortgage relief scam.The settlement with the Bottons represents the latest action in the FTC's ongoing crackdown against fraudsters who've been taking advantage of financially hobbled homeowners desperately trying to avoid foreclosure.

The Bottons were first targeted by the FTC in November 2009 as part of "Operation Stolen Hope," when the agency accused Kirkland Young and its manager, David Botton, of misrepresenting themselves as consumer mortgage lenders and servicers, as well as falsely promising homeowners to modify their loans and lower their monthly mortgage payments.

Kirkland Young and Botton, the FTC charged, ensnared victims by leaving telephone messages offering to approve them for a loan modification. During follow-up calls, they lied to consumers about about specific interest rates and monthly payments and made empty promises about their ability to prevent foreclosure.

One month later, the FTC added Botton's sister, April, their father, Samy and Attorney Aid as defendants. According to court papers, the Botton family operation charged homeowners up-front fees of $299 to $699 to modify their mortgages.

Although some consumers did receive loan modification offers, the FTC said they weren't actually much more affordable than their existing payments. Incredibly, some of the mortgage modification "relief" offers actually called for even higher monthly payments.

In addition to barring the defendants from selling mortgage relief services, the settlement also prohibits them from misleading consumers about financial-related goods and services such as loan or refund terms, affiliation with any person or government entity, or the ability to improve a consumer's credit history. The settlement also bans them from selling or disclosing customers' personal information, enforcing contracts with mortgage relief clients, and violating the Telemarketing Sales Rule.

The settlement's $6.1 million penalty will be suspended when Samy Botton pays the FTC $300,000, April Botton Krawiecki surrenders a West Hollywood, Calif. condo, David Botton relinquishes a number of "certain assets," and Kirkland Young and Attorney Aid have surrendered all of their assets, worth $2.2 million.

Those "certain assets" David Botton has to hand over to the FTC include a Mastercraft CSX boat, a 2003 BMW M3, a Long Beach, Calif. condo and various investments, bank accounts and cash.

The FTC issued the Mortgage Assistance Relief Services Rule (MARS) last November, which bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners receive an acceptable, written offer from their lender or servicer. Because the FTC's case against the Botton's predates the rule, the FTC didn't charge them with any MARS violations.

Click here for facts and important information from the FTC about avoiding scams and saving your home from foreclosure.

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