Scammer Banned from Debt and Mortgage Relief Business, Telemarketing

Scammer Banned from Debt and Mortgage Relief Business, Telemarketing
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March 14, 2016

Denny Lake, the final individual defendant in a mortgage modification scam aimed at financially strapped homeowners, will be banned from selling debt relief and mortgage-related products and services, and from telemarketing under a court order obtained by the Federal Trade Commission (FTC).

The court's order granting the FTC's request for summary judgment against Lake on all counts resolves an FTC action brought in April 2015, when the court halted the HOPE Services and HAMP Services scheme that promised consumers help getting their mortgages modified, but instead stole their mortgage payments, leading some to foreclosure and bankruptcy.

The court found that Lake, doing business as JD United, Advocacy Department, Advocacy Division, and Advocacy Agency, substantially assisted HOPE Services and HAMP Services, while knowing or consciously avoiding knowing the other defendants were violating the FTC's Mortgage Assistance Relief Services Rule and its Telemarketing Sales Rule.

The court wrote, "Fraud was the HOPE Defendants' business model, and Lake knew it. Nonetheless he continued contracting with them, continued to assist them in procuring payments from clients, and continued to refuse to inform customers about the location of their trial payments." The court found that "no reasonable jury could conclude that Lake did not substantially assist the HOPE Defendants in carrying out their scheme."

In addition to the banned activities, the order also prohibits Lake from making misrepresentations about any products or services, including financial products in particular, and from making unsubstantiated claims about any financial product unless they are non-misleading and based on reliable evidence. He also is barred from profiting from consumers' personal information and failing to dispose of it properly.

The order imposes a judgment of more than $2 million, which represents the amount of bogus mortgage payments consumers paid.