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The indictment last week of a California attorney was the latest move by federal and state prosecutors and government agencies to impose civil penalties or prison time against Golden State lawyers allegedly involved in mortgage or foreclosure fraud. The State Bar of California, meanwhile, has been engaged in its own crackdown on attorneys involved with such frauds. “It’s been a very interesting time in this loan modification fraud, because there’s never been such complete agency cooperation before between the different agencies and the State Bar,” said Suzan Anderson, supervising trial counsel for the State Bar. The U.S. attorney’s office in Los Angeles on Thursday indicted Gerald L. Wolfe of the Law Office of Gerald Wolfe in Irvine, Calif. He was charged with one count of conspiracy to commit wire fraud relating to a scheme in which he pocketed more than $2 million in proceeds from 30 homes purchased at inflated prices using straw buyers with false personal information and fraudulent loan applications. The homes, most of which ended up in foreclosure, were purchased in 2005 and 2006 in Orange and Riverside counties, prosecutors allege. Wolfe, a registered real estate broker, operated two companies called Real Equity Pursuits and Douglas Design, according to federal prosecutors. Wolfe had no public record of discipline and was admitted to practice in California in 1995. He is scheduled to appear in court on Tuesday and faces 20 years in federal prison. Wolfe did not return a call for comment. The charges are the first known federal indictment of an attorney for alleged mortgage or foreclosure fraud. In January, the Orange County district attorney’s office brought charges against Christopher Diener, a former attorney in Irvine who was accused of defrauding more than 400 homeowners by promising to modify their mortgage loans in exchange for advance payments. He and two business partners allegedly operated a $1.25 million fraud using companies named Home Relief Services LLC, U.S. Loan Mod Processing, HRS Communications, The Diener Law Firm and Diener Law Group, according to the district attorney’s office. Diener lost his license to practice law in October 2009. His criminal defense attorney, Lisa Bethune of Bethune Law Corp. in Laguna Hills, Calif., said that 110 of the 118 counts brought against her client — including felony grand theft, perjury and conspiracy — were dropped following a lengthy preliminary hearing earlier this year. The remaining counts are for felony grand theft, she said. Diener, who has pleaded not guilty, is scheduled to appear for a pretrial conference on Dec. 3. “We’re going to talk about the case, about whether the prosecution wants to negotiate a disposition, some sort of settlement,” she said. “But Mr. Diener is not interested in pleading guilty to anything because he’s not guilty of any crime. So we anticipate on that date a trial date will be set.” California Attorney General Jerry Brown sued Diener last year, along with his partners, seeking $10 million in civil penalties plus full restitution and a permanent injunction to shut down the businesses. That suit is pending. Diener’s attorney in that suit, Jefford Davis, a solo practitioner in Brea, Calif., did not return a call for comment. Brown’s office has a suit pending against two other attorneys, Arthur Steven Aldridge and Karla C. Shippey, as well as Shippey’s law firm. They are accused of swindling $1 million from more than 500 victims in an alleged scheme that involved RMR Group Loss Mitigation and its three executives and another company called Living Water Lending Inc. According to Brown’s office, the companies solicited homeowners through telephone calls and in-person home visits, claiming a 98 percent success rate in modifying loans. Brown is seeking $7.5 million in civil penalties, restitution and a permanent injunction to shut down their services. Shippey, of Shippey Law PC in Fullerton, Calif., was admitted to practice in California in 1984. Shippey declined to comment about the allegations but told The National Law Journal that she and the other defendants are in settlement negotiations. “The attorney general’s office is working very hard to try to negotiate a settlement in this situation,” she said. Aldridge, who was admitted to practice in 1992, could not be reached for comment. In August, Brown’s office obtained a $1.1 million judgment against another attorney, Mitchell W. Roth of M.W. Roth PLC in Sherman Oaks, Calif., who was accused of bilking 2,000 homeowners seeking foreclosure relief out of thousands of dollars. Roth operated United First Inc., a Nevada company targeting struggling homeowners, along with the company’s president, Paul Noe, who previously was convicted of wire fraud. Roth filed lawsuits on behalf of the homeowners but failed to make additional filings, respond to motions, meet deadlines or appear in court, according to Brown’s office. The stipulated judgment, which excludes Noe, requires Roth to pay $1 million in restitution to defrauded homeowners and $125,000 in penalties. Roth resigned from practice in April 2009 after the bar obtained a court order shutting down his offices in Sherman Oaks, San Diego and Riverside, Calif. Brown’s office and the U.S. Federal Trade Commission (FTC) reached a stipulated judgment with Adrian Pomery of Pomery & Associates in Orange, Calif., that shut down his foreclosure assistance firm, U.S. Foreclosure Relief Corp., and a related company, H.E. Servicing Inc. Both agencies accused Pomery and two other defendants of charging homeowners up to $2,800 for loan modification services that they never performed. The judgment, which requires Pomery and the other defendants to pay back more than $1 million to the victims of their alleged scheme, also involved the state of Missouri. In June, the FTC announced a $10.8 million judgment against Nabile J. Anz, who ran the Federal Loan Modification Law Center, Anz & Associates PLC and Venture Legal Support PLC. The companies charged homeowners up to $3,000 in fees but never delivered results, according to the FTC. Anz resigned from the bar last fall with charges pending.

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