A judge from the U.S. District Court for the Central District of California issued an order against the operators of the Home Matters USA for what was characterized as a "mortgage relief scam," by the Federal Trade Commission (FTC) and the California Department of Financial Protection and Innovation (DFPI). The court barred these operators from engaging in telemarketing and debt relief businesses, in addition to mandating a payment of $19 million in consumer refunds and civil penalties.
Initiated in September 2022, the case marked a collaboration between the FTC and DFPI, alleging that the defendants orchestrated a deceptive mortgage relief operation, ultimately costing consumers millions of dollars. The defendants purportedly misled consumers by charging exorbitant fees while falsely promising to negotiate loan modifications with mortgage lenders, sometimes misleadingly suggesting affiliation with government COVID-19 relief initiatives.
The defendants, including companies operating under various names such as Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America, along with their owners Michael R. Nabati, Armando Solis Barron, Dominic Ahiga (also known as Michael D. Grinnell), and Roger S. Dyer, were sued in September 2022. The lawsuit alleged that they deceived thousands of distressed homeowners by falsely promising to reduce mortgage payments and prevent foreclosures.
According to the court's findings, the scam victimized over 3,000 individuals nationwide, disproportionately affecting vulnerable groups such as elderly and veteran homeowners. The defendants' fraudulent scheme resulted in substantial financial losses for many homeowners seeking relief from mortgage burdens.
“Our win in this case sends a clear message to scammers who target consumers facing financial hardship: the FTC and our law enforcement partners are focused on fighting fraud and halting it,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “We look forward to more opportunities to partner with the California DFPI on behalf of consumers.”
DFPI Commissioner Clothilde Hewlett echoed these sentiments, emphasizing the reinforcing effect of California's Consumer Financial Protection Law. "Fraudsters everywhere should take note – DFPI will find you, expose you, and hold you accountable. Victims of fraud should likewise take heart. The DFPI has your back,” Hewlett said.
Established in 2020 through legislation signed by Gov. Gavin Newsom, the DFPI emerged as a regulatory body aimed at addressing financial abuses in the state. Newsom emphasized the state's commitment to consumer protection, particularly in light of perceived federal regulatory gaps during the Trump administration.
“While the federal government is getting out of the financial protection business, California is leaning into it,” Newsom said back in 2020. “It’s at this moment especially – when so many Californians are strapped for cash and struggling to pay their bills – that families are likely to fall victim to predatory and abusive financial products."
