SAN DIEGO (CNS) - Two North County men were convicted Thursday of taking part in a loan-modification scam that defrauded nearly 3,300 homeowners nationwide through a sham law firm.
Dean Gregory Chandler of Fallbrook and Michael Eccles of Vista were found guilty of eight and five felony counts, respectively, following a three- week trial in San Diego.
The charges -- including conspiracy and mail and wire fraud for both men, and money laundering as well for Chandler -- stemmed from the pair's actions in running Oceanside-based 1st American Law Center.
According to prosecutors, Chandler created the company in 2009 in partnership with convicted drug trafficker Gary Bobel, who oversaw a call center that pitched loan-modification services.
Eccles and other telemarketers promised potential clients, among other things, that only the most qualified applicants would be approved as clients of the firm, that an "attorney retainer fee" averaging $3,495 would be preserved in a trust account until each client was satisfied, and that clients were protected by a money-back guarantee.
Eccles became manager of the call center in December 2009, and took advantage of the position to script additional lies for the telemarketers to use on clients, court documents state.
Among those falsehoods were claims that the firm had been in business since 1992, that its operators had been successfully modifying loans for more than 20 years, that they had helped more than 100,000 homeowners and that it took its employees on average 200 hours to complete a successful loan modification, prosecutors told jurors.
Chandler, an attorney, did not screen all applications or negotiate with lenders, the firm failed to modify three out of four loans it took on, and clients' payments were used to pay co-conspirators, sales commissions and company expenses, according to the U.S. Attorney's Office in San Diego.
Chandler's chief role allegedly was to mislead regulatory and enforcement agencies that threatened the law firm's profitable operations.
Chandler earned more than $275,000 in a roughly 14-month period via the scheme, according to court records. In July 2010, after the FBI and Internal Revenue Service served a search warrant at his offices, Chandler also allegedly drained one of the firm's bank accounts of $16,500 and used it for his own benefit.
During the trial, victims came from across the nation to testify about their experiences.
A couple in their 70s from Evansville, Indiana, related how they had contacted 1st American Law Center to avoid losing the home where they had spent 27 years raising a family and which was specially modified to accommodate their paraplegic son's wheelchair. The couple ultimately lost their it along with their savings.
Chandler, 50, and Eccles, 35, are scheduled to be sentenced Feb. 23. A restitution hearing in the case is set for April 21.
Eleven other people have been convicted for taking part in the loan scheme.
San Diego and Chula Vista are out of the sweepstakes to get Amazon's second headquarters, the company announced Thursday.
Relatively warm weather and mild conditions are on tap again Thursday in San Diego County, but a storm system that could bring rain and snow is on the horizon.
Animal-loving celebrities were getting ready Wednesday night for a big benefit concert to help trainers and their horses displaced by the Lilac Fire.
Opponents of a plan to expand a Mission Bay hotel on Wednesday tried to get the public on their side ahead of a crucial meeting.
A water line broke Wednesday morning in a hilly neighborhood on the border of San Diego and Mountain View, flooding several nearby homes and opening a large sink hole that partially swallowed a pickup truck.
A three-vehicle pileup at an intersection near Lawrence Welk Resort Village left one person dead and four others injured Wednesday.