Attorney Barred From Real Estate

By Jason W. Armstrong
Daily Journal Staff Writer, March, 2010
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California Attorney General Jerry Brown Jr. Monday shut down two nationwide foreclosure assistance companies accused of defrauding several thousand struggling homeowners and announced a settlement barring the three men behind the operations, including an attorney, from working in the real estate industry.

Under the agreement, which resolves federal and state authorities' eight-month-old lawsuit against Orange County attorney Adrian Pomery and businessmen George Escalante and Cesar Lopez, the trio also must pay more than $1 million in restitution to former clients of their Orange County-based businesses, U.S. Foreclosure Relief Corp. and offshoot H.E. Servicing, Inc.

The settlement was reached March 11. It is the latest in several cases being pursued by Brown's office, the Federal Trade Commission and other agencies as part of "Operation Loan Lies," a yearlong nationwide crackdown on sham loan-modification consultants.

Pomery, a sole practitioner who was admitted to the State Bar in 2007, was an attorney for U.S. Foreclosure Relief and H.E. Servicing. He is one of 16 lawyers the State Bar announced in September it was investigating for misconduct relating to the mortgage workout business. Pomery is still an active attorney, according to the State Bar's records.

According to Brown's office, the illicit mortgage modification ventures operated under boiler room-type settings in which high-pressure salespeople, fielding hundreds of calls each day, would promise distressed homeowners that they could avoid foreclosure for $1,800 to $2,800 in upfront fees. But the companies performed only a handful of workouts, Brown said. In the case of H.E. Servicing, he said, the company boasted about completing 10,000 successful modifications and having a 90 percent success rate, but in reality had opened only 2,960 files and finished 311 workouts.

The men, Brown said in a statement Monday, "used their loan modification companies to sell false hope to hundreds of Californians facing foreclosure."

Neither Pomery nor Lopez could be reached Monday. Both men are representing themselves in the litigation.

An Irvine attorney for Escalante and U.S. Foreclosure Relief and H.E. Servicing, Steven L. Krongold, said his clients are "happy to have the case resolved." He said Escalante relied on advice of lawyers working with the companies, including Pomery. "He thought he was in compliance with the law," Krongold said Monday. "This was a legitimate business."

Brown and the Federal Trade Commission are still investigating another defendant in the lawsuit, Santa Ana attorney Brandon Moreno. Like Pomery, Moreno advised H.E. Servicing and U.S. Foreclosure Relief, according to Brown's office, and falsely promised customers mortgage modifications.

Moreno, who like Pomery is under investigation by the State Bar, could not be reached Monday. He is still an active attorney, according to State Bar records.

The case is Federal Trade Commission v. U.S. Foreclosure Relief Corp., 09-00768 (C.D. filed July 2009).

jason_armstrong@dailyjournal.com