Homeowners from seven Stanislaus County cities were among the victims of a multimillion-dollar loan modification scheme run out of a Southern California boiler room that resembled a casino, the state attorney general said Thursday.
The victims were persuaded to hand over up-front fees of as much as $5,000 to get help modifying loans to keep their houses out of foreclosure.
But the company did not follow through on its promises, leaving its customers with additional debt.
"I almost lost the house because I was depending on them to mediate the process and they never did," said Jeff Carnie, an Oakdale resident who sought help from the group. "Everything looked good, sounded good."
Carnie, 50, said he lost $2,200. He said he sent the money after perusing a Web site and a stack of paperwork sent to his house, all which looked professional.
Nine men have been charged with 97 criminal counts including grand theft, unlawful foreclosure consulting, tax evasion and conspiracy. They operated out of a boiler room decorated "high-roller style" with a roulette wheel and other casino equipment, authorities said.
Attorney General Jerry Brown said the men are accused of bilking $2.3 million from 1,500 homeowners, including some in Modesto, Turlock, Ceres, Oakdale, Riverbank, Manteca and Newman.
In almost every case, no loan modifications were completed as promised, the Justice Department said.
Arrested Tuesday and Wednesday night were Gregg Scott Quinn, 37, of Camarillo and Juan Pierre Washington, 40, of Winnetka, who worked as company sales managers and supervisors.
Gary Arnold Eisenberg, 71, of Westwood, a telemarketer with the company, and Ira Itskowitz, 58, a sales manager, are in federal custody for violating parole in connection with their participation in the scheme, authorities said.
The four primary owners of the business are not in custody. They are Niv Iskin, 30, of Reseda; Reviv Karpman, 38, of Tarzana; Tomer Kogman, 29, of Reseda; and Avraham Yechizkia, 34, of Encino. Sales manager Barel Iskin, 23, of Woodland Hills also is being sought.
Brown's office began its investigation in March 2009 in response to consumer complaints against the Canoga Park-based loan modification business, which operated as Mason Capital Group, LLC and Gretchen Fox and Associates.
Financial records indicate that the four owners spent hundreds of thousands on private school tuition, travel, entertainment, shopping and other personal expenses.
Brown said his office will seek restitution for victims.
The three-county region including Stanislaus, Merced and San Joaquin counties continues to have the highest percentage of defaulted mortgages in California.
Since 2007, when the region's housing crisis began, nearly 52,500 Stanislaus, Merced and San Joaquin County homes have been lost to foreclosure. That includes about 12.7 percent of all houses and condos in Stanislaus, 15.5 percent in Merced and 13.9 percent in San Joaquin.
Bee staff writer Merrill Balassone can be reached at firstname.lastname@example.org or 578-2337.