State AG's Office Cracking Down on Mortgage Modification Scams - 8 News NOW

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State AG's Office Cracking Down on Mortgage Modification Scams

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William Vargas William Vargas
Michael Sinclair Michael Sinclair
Justin Sabo Justin Sabo
Jack Ferm Jack Ferm
Mario Sanders Mario Sanders

Con artists who promise to help homeowners modify their mortgage loans for a fee but wind up ripping them off have caught the attention of Nevada Attorney General Catherine Cortez Masto and her Mortgage Fraud Strike Force.

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So, too, have criminals who perpetrate other types of mortgage fraud. These are recent examples of individuals who have been convicted of or who have reached plea agreements in Clark County for crimes where homeowners were victims.


William Vargas and Michael Sinclair


Both men were indicted by the grand jury in June 2009 for using their Las Vegas company, Federal Housing Aid, to fraudulently extract loan modification fees from victim homeowners in 2008. One victim was a 75-year-old Bakersfield, Calif., man who was charged $899 on his credit card by the company but didn't receive any help in his bid to resolve a pending foreclosure. Vargas and Sinclair also were charged with taking $799 each from women in Victorville, Calif., and Midlothian, Ill., $899 from a Lake Elsinore, Calif., woman who eventually lost her home to foreclosure, and $949 from a Florida City, Fla., woman who also lost her home. Sinclair pleaded guilty to felony mortgage fraud/pattern of mortgage lending fraud and was sentenced in September 2010 to a maximum five years probation and ordered to pay $30,160 in restitution. Vargas pleaded guilty to felony theft/obtaining more than $250 by material misrepresentation from a person older than 60. He was sentenced in May 2010 to three years probation and ordered to pay $21,000 in restitution.

Justin Sabo, Thomas Gentile and Julio Martinez

Indicted by the grand jury in October 2009, Sabo and Gentile were charged with falsely using the identities of a 73-year-old Las Vegas man and 59-year-old Las Vegas woman in early 2009 to secure a $65,000 loan against their property, causing the victims to lose more than $3,000. Gentile pleaded guilty to felony theft/obtaining more than $2,500 by material misrepresentation
from a person older than 60 and was sentenced in March to five years probation beginning with six months in jail. Sabo pleaded guilty to gross misdemeanor attempted theft/obtaining more than $2,500 by material representation from a person older than 60 and was sentenced in March to a maximum three years probation. Both men were also ordered to pay $65,000 in restitution. Martinez was charged with acting without lawful authority by notarizing a signature purported to be that of the male victim when Martinez knew the signature was false. Martinez pleaded guilty to that misdemeanor.

Jack Ferm and Mario Sanders

Ferm and Sanders, doing business as US Justice Foundation in Las Vegas, were indicted by the grand jury in October 2009 for running a scam in which they used television ads to lure homeowners into believing the company would provide assistance to clients in the preparation of both complaints against predatory lenders and documents to stop foreclosures. Instead, the two men were accused of collecting fees from each of five Southern Nevada homeowners without providing services. Ferm was charged with doing the same to five additional victims, including a 79-year-old woman and 65-year-old man. In September, Ferm pleaded no contest to felony theft/obtaining more than $2,500 by material misrepresentation and agreed to pay $192,168 in restitution. Sanders pleaded guilty to the same charge in September. Sentencing is pending.

Cindy Birkland and Jeffery Tye Brown

Birkland, doing business as Sapphire Mortgage, and Brown, doing business as DB Financial Group, were named in May 2008 in a 34-count criminal complaint in which they were accused of forgery, theft, making false written statements to obtain credit, obtaining signatures under false pretenses and racketeering in connection with Clark County incidents in 2007. In one case Brown and Birkland were accused of wrongfully obtaining a mortgage loan for a Las Vegas home by falsifying the income of a man they recruited into the scheme. To engineer the scheme they were accused of claiming on loan applications that the man, a restaurant worker, was actually a trucking company executive earning nearly $23,000 a month. Brown ultimately pleaded guilty to felony mortgage fraud and was sentenced in June 2010 to a prison term of 12 to 30 months with credit for time served. He was also ordered to pay $23,685 in restitution. Birkland pleaded guilty to gross misdemeanor conspiracy to unlawfully receive a fee of more than $1,000. In January she received three years probation and was ordered to pay $6,000 in restitution.

Doninador Palalay and Marie Tejada Medina

Indicted on 13 counts in August 2010, Palalay and Medina were accused of using the companies PDM Financial Group and Golden Springs Group of Companies to extract up-front fees from Southern Nevadans in exchange for false promises of saving the victims' homes from foreclosure. The alleged victims included five homeowners who paid the fees and a senior citizen who was induced into investing $20,000 into an unlawful mortgage business. Palalay pleaded guilty to felony theft/obtaining more than $2,500 by material misrepresentation and was sentenced in February to nine months in jail, followed by five years probation and $36,332 in restitution. Medina pleaded guilty to felony theft/obtaining more than $250 by material misrepresentation and was sentenced in March to 30 days in jail, followed by a maximum five years probation and $37,332 in restitution.

Christopher Lloyd Brown

Brown was accused in a criminal information of obtaining $115,000 from a Las Vegas woman in October 2010 by falsely claiming he would use the money to buy her a home in Henderson. He was accused of forging a trustee's deed for the property and filing it with the Clark County Recorder while failing to purchase the home, pocketing the money instead. He pleaded guilty to felony theft/obtaining more than $2,500 by material misrepresentation and agreed in June to pay $115,000 in restitution. Sentencing is pending.  

Joseph Lawrence Yorkus and James Robert Bartczak

Yorkus and Bartczak, under the guise of Great Western Business Services, were initially indicted in March on 12 counts related to felony theft and mortgage lending fraud in Clark County. One alleged victim was a 68-year-old woman who wrote a $2,700 check to Great Western in January after receiving a letter from the company falsely claiming that it took over servicing of her mortgage loan from Bank of America. Last spring Yorkus and Bartczak were also accused in a criminal information of committing a related crime through the companies BAC Collections, Fresh Start Consultants and Learn Your Rights. Yorkus ultimately pleaded guilty to felony mortgage lending fraud and felony theft/obtaining between $250 and $2,500 by material misrepresentation. He was sentenced in August to consecutive terms of two to 10 years in prison and one to four years behind bars and ordered to pay $346,155 in restitution. Bartczak pleaded guilty to felony theft/obtaining more than $250 by material misrepresentation. He was placed on three years probation and ordered to pay $37,021 in restitution.         

**This article originally identified the individuals in the story as having been "convicted" in Clark County of crimes where homeowners were victims. As explained in the above story, Jack Ferm was not convicted but instead entered a "no contest" plea agreement with the AG's office, in which he plead no contest to one count of "Theft-obtaining money in excess of $2,500 by a material representation", and agreed to pay restitution to the charged victims. The plea agreement also allows that if Ferm makes full restitution by the end of a probation period, he may request an amended criminal information reducing his charge to "Attempted Theft," a misdemeanor.    

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