Another unfortunate example of people that are experiencing financial hardship being scammed. It has never been more easy to do a basic investigation of those your placing your trust in. Make the effort and save yourself a lot of trouble in the end.
Newport Beach man sent to prison for debt-relief fraud
Nov. 21, 2016
By CITY NEWS SERVICE, LOS ANGELES
An Orange County man was sentenced to more than two years in prison Monday for his role in a debt-relief scheme that offered to settle consumers’ credit card debts but instead took victims’ payments as undisclosed up-front fees. John Vartanian, 57, of Newport Beach, pleaded guilty in July to conspiracy to commit mail and wire fraud involving companies known as Nelson Gamble & Associates and Jackson Hunter Morris & Knight. Vartanian and his four co-defendants portrayed the debt-relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors.
Clients made monthly payments, expecting the money to go toward settlements. Instead, Vartanian and his co-conspirators took at least 15 percent of the total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees, according to the U.S. Department of Justice. Vartanian was sentenced to 27 months in prison, followed by three years of supervised release. He was also ordered by U.S. District Judge Dale Fischer to pay $1.2 million in restitution. Four other people also pleaded guilty in connection with the scheme: Jeremy Nelson of Laguna Niguel, Elias Ponce of Santa Ana, Christopher Harati of Anaheim and Athena Maldonado of Lake Forest.
According to federal prosecutors, Vartanian admitted he did not tell customers during sales calls that the companies charged significant up-front fees. Additionally, he conceded that he falsely told customers the companies were backed by a law group and that money would be refunded if customers were not satisfied. The name of the company was changed from Nelson Gamble to Jackson Hunter in 2011 because of customer complaints, but Vartanian continued to make the same pitch without disclosing that the new company was essentially the same as the old company, prosecutors said. In speaking with unhappy customers, the conspirators at Jackson Hunter blamed past problems on Nelson Gamble and denied requests for refunds, according to federal prosecutors.