Two Admit Scamming Consumers Through Phony Debt Relief Services

CALIFORNIA

Two people Athena Maldonado, 30, and Christopher Harati, 31, both of Orange County, California, plead guilty Monday to duping consumers by portraying debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors, according to federal officials.

Clients also made monthly payments expecting the money to go toward settlements.  The companies instead took an amount equal to at least 15 percent of clients’ total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees, according to authorities.

“Debt relief service scams prey on vulnerable consumers trying to climb out of tough financial situations,” said Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.

The debt relief companies were known as Nelson Gamble & Associates (Nelson Gamble) and Jackson Hunter Morris & Knight LLP (Jackson Hunter).

These are the facts and circumstances surrounding this case:

• Maldonado admitted that she acted as the “legal department” for both companies, and used multiple aliases when responding to complaints submitted by state attorney general offices, the Better Business Bureau and private attorneys.
• After Nelson Gamble changed its name to Jackson Hunter, Maldonado said she responded to consumer complaints by falsely stating, among other things, that the two companies were not related and that Jackson Hunter could not refund money paid to Nelson Gamble.
• Harati admitted that he worked as a client relations manager for the companies and handled complaint calls from clients.
• Harati said he told customers that Nelson Gamble and Jackson Hunter were separate companies.
• He falsely stated that Jackson Hunter was a nationwide law firm with years of experience and made other misrepresentations designed to convince customers to stay with the company.

Maldonado and Hunter are facing up to five years in prison and fines.

No sentencing hearing date has yet been set.

On Dec. 3, 2014, a grand jury in Santa Ana, California, returned a 22-count indictment charging Jeremy Nelson, Elias Ponce and John Vartanian, all of Orange County, for mail fraud, wire fraud, and conspiracy to commit mail and wire fraud in the same fraudulent scheme.

The trial in that case is scheduled to begin on Feb. 16, 2016, in Los Angeles.

The Federal Trade Commission  brought a civil case against Nelson Gamble, Jackson Hunter and other defendants in September 2012, alleging that the defendants falsely claimed they would reduce consumers’ unsecured debt by 50 percent or more, made unauthorized charges to their bank accounts and called phone numbers listed on the National Do Not Call Registry, officials stated.