Jack Ferm was arrested on felony charges Wednesday morning after a hearing in District Court. He is the head of mortgage rescue company, the U.S. Justice Foundation, which was ordered to close last week.
Instead of a slap on the wrist, Foundation President Jack Ferm left district court in handcuffs. The man whose company filed hundreds of unsuccessful lawsuits to stop foreclosures now faces felony criminal charges.
Just last week Ferm said this day would never come, "My simple question is why hasn't the Attorney General done something for the citizens here?"
If actions speak louder than words, Ferm heard his answer as the handcuffs closed on his wrists. Ferm faces felony criminal charges brought by the Attorney General's Bureau of Consumer Protection.
According to the complaint, Ferm promised he could stop foreclosure by helping homeowners sue their mortgage companies themselves. Instead, at least two victims claim they paid thousands for services Ferm never provided.
"Attorney General Masto is aggressively pursuing any fraud related to the mortgage industry. The current wave of scams happens to be the loan modification scams, and again, this was one of the companies we've received the most complaints about," said Chief Deputy Attorney General John Kelleher.
In previous interviews, Ferm insisted his foundation filed as many as 800 lawsuits using boilerplate legal documents prepared by paralegals.
Prior to his arrest, he stood before Judge Kathleen Delaney, summoned to court for the third time to explain why he shouldn't be held in contempt for practicing law without a license.
His former client Gloria Badgely was sworn as a witness mere moments after losing her own case.
"I feel a little bit that Gloria Badgely's situation has been a little bit lost in a lot of this regarding U.S. Justice Foundation and Jack Ferm," said Kelleher. "This is about Gloria Badgely trying to save her home since January of 2007 for her family."
A point not lost on Judge Delaney, "It may very well be the case that these parties have a legitimate claim to bring forward, but we're never going to know that because an attorney isn't assessing the facts of their case, and an attorney isn't preparing their documents and these documents are form pleadings that are being applied to everyone regardless of their specific circumstances."
The court finds Ferm in contempt and orders both he and his company to stop the unauthorized practice of law. But this time, Ferm exits the courtroom through a different entrance and will have to save his comments for his next court appearance.
Ferm's attorney, Frank Cremen, says cuffing his client in the courtroom was inappropriate and nothing more than a show put on by the AG's office. That office says Ferm lives in Utah, so investigators wanted to make their arrest before he left town in the safest possible location.
The Foundation, and its president Jack Ferm, have to answer for the hundreds of lawsuits moving through both the state and federal courts.
