San Diego Man Charged With Fraud and Conspiracy Based on Mortgage Loan Modification Scheme

SAN DIEGO, March 23 /PRNewswire-USNewswire/ -- U.S. Attorney Karen P. Hewitt announced the unsealing today of an indictment charging Glenn Steven Rosofsky with one count of conspiracy to commit wire fraud and money laundering and one count of money laundering.  According to the indictment, Rosofsky and others agreed to operate a telemarketing operation in San Marcos, Calif., in order to sell loan modification services to homeowners who were delinquent on their monthly mortgage payments.  The indictment was handed up by a federal grand jury sitting in San Diego on March 19, 2010 and sealed until the defendant's arraignment earlier today.

The charged activity all stems from a mortgage fraud scheme based in San Marcos, California, that operated under the names, "Nations Housing Modification Center" or "Federal Housing Modification Department" (NHMC).  Defendant Rosofsky was in charge of NHMC's sales and marketing, while Michael Trap (charged elsewhere) was responsible for NHMC's finances, bank accounts and the processing of customers' files.  The indictment alleges that Rosofsky, Trap and others would use false and fraudulent statements and representations to induce customers to pay $2,500 - $3,000 to purchase loan modification services from NHMC.  It was further part of the conspiracy that Rosofsky would ask others to rent a post office box and office space in Washington, D.C., to give the false impression that NHMC operated on Capitol Hill in Washington, D.C.

According to the indictment, the defendant used a marketing firm in Florida to mail solicitation letters to potential customers of NHMC falsely representing that NHMC had "attorneys" and "forensic accountants" on staff to deal with the loss mitigation departments of banks on behalf of NHMC's customers, when in fact the company did not.  In addition, the solicitation letters were mailed in envelopes that deceptively bore a Capitol Hill return address and the seal of the U.S. Capitol.  The letters were mailed throughout the country to individuals behind on their mortgage payments and encouraged them to call a toll-free number to purchase loan modification services.  The staff of telemarketers at NHMC's offices in San Marcos used a script drafted by the defendant. The indictment alleges that the defendant and Trap conducted financial transactions with the customer funds transferred to NHMC's bank accounts in order to pay expenses of the business and to compensate themselves.

The indictment further alleges that as part of the conspiracy, the defendant and others had over $900,000 in customer funds transferred to NHMC's bank accounts in the Southern District of California from victims located in Las Vegas; Spokane, Wash.; Bridgeport and Virginia Beach, Va.; New Berlin and Kenosha, Wisc.; Tucson, Ariz., and Washington, D.C. 

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who are working together to launch a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  The Special Inspector General for the Troubled Asset Relief Program co-chairs the task force's Rescue Fraud Working Group.

This case is the product of an investigation by agents of the Internal Revenue Service, Criminal Investigation and the Office of the Special Inspector General - Troubled Asset Relief Program (TARP) and is being prosecuted in San Diego federal court by Assistant U.S. Attorneys Eric J. Beste and Jonathan Shapiro.  U.S. Attorney Hewitt also acknowledged the assistance of the San Diego County District Attorney's office in the early stages of this investigation.

An indictment itself is not evidence that the defendant committed the crimes charged.  The defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.   

SOURCE U.S. Department of Justice

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