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Financial Crime: Multi-level marketing scheme ensnared nearly 800 ‘desperate homeowners’ facing foreclosure, prosecutors say

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It was an alluring offer for homeowners facing foreclosure — in exchange for a fee, they would be able to keep their homes and have their mortgage payments reduced or even eliminated altogether.

But the pitch — which would curiously arrive in the mail just after a bank had sent its first foreclosure warning — was a scam, prosecutors said. It was all part of a nationwide, multi-level marketing scheme that preyed on “vulnerable, financially-distressed and desperate homeowners.” 

Last week, 66-year-old Lorin Kal Buckner, of Hamilton, Ohio, and 59-year-old Dessalines Sealy, of Brooklyn, New York, two key members of the group running the scam, were found guilty by a federal jury in Cincinnati of suckering nearly 800 people around the country out of their money and seriously damaging their future efforts to seek bankruptcy protection. 

Two others, Joel Harvey, 40, and Garrett Stevenson, 45, both of Cincinnati, pleaded guilty during the trial. Nine other defendants have also been charged in the case.

“The defendants took advantage of folks’ financial despair and emotional vulnerabilities to fill their own pockets,” said Kenneth Parker, the U.S. attorney for the southern district of Ohio.

Buckner and Sealy, who represented themselves at trial, didn’t respond to messages seeking comment. An attorney for Harvey had no comment and a lawyer for Stevenson didn’t immediately return a call seeking comment.

Prosecutors said the group operated the venture from 2013 until they were indicted in 2019 as a multi-level marketing scheme, enticing salespeople to help lure in struggling homeowners in exchange for commissions. The scheme operated under a variety of names like MVP Home Solutions, Stay In or Walk Away, Bolden Pinnacle Group, Home Advisory Services Network, Home Advisory Services Group and the Silverstein & Wolf Corp.

According to court filings, The group would find their targets by combing through court documents looking for foreclosure filings. The defendants were accused of then sending the affected homeowner postcards or emails offering to help them solve their financial problems. Over the course of the scam, prosecutors say the group sent out tens of thousands of postcards advertising a program to “stop foreclosure” or “stop the sheriff sale,” in return for a fee.

Prosecutors said the mailings generated a “false sense of urgency,” by claiming to be the third or final notice even though it was the first solicitation the recipient had received.

If a homeowner contacted the group, a salesperson would then give them a hard pitch, saying the homeowner could stop making mortgage payments if they signed up for the program, which claimed to have a team of lawyers who would negotiate with the banks to buy out the debt.

Ultimately, the scammers promised homeowners that their mortgage payments would be reduced or eliminated completely, prosecutors said. But the group never took any real steps to help the homeowners.

“These programs were fraudulent. The defendants performed virtually no negotiations on behalf of the homeowners with the homeowners’ lenders, and never successfully purchased a homeowner’s note or successfully provided a homeowner with a new, lower-cost mortgage,” prosecutors wrote in court papers.

In the end, the group would often file a bare bones Chapter 13 bankruptcy filing on the homeowner’s behalf, to help stall the foreclosure process, which, according to court papers, the defendants called “pump fakes,” a reference to a move in basketball or football where a player pretends to shoot or throw the ball to illicit a reaction from defenders.

Bankruptcy courts would usually later dismiss the filings for lacking key information, which would cause serious problems for many homeowners going forward.

“In some cases, this led the homeowners being barred from filing subsequent bankruptcy petitions,” prosecutors wrote in a court filing.

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