The Minnesota Department of Commerce has issued charges against a Utah-based company for allegedly defrauding clients seeking mortgage adjustments.
Commerce Commissioner Mike Rothman alleges that C.C. Brown Law took more than $134,000 in payments from 94 Minnesotans without providing much of the promised mortgage adjustment services.
"At the end of the day, what happens is loan modification companies make promises to consumers who are in financial distress, and they blatantly exploit consumers and are doing outright fraudulent activity," Rothman said.
The department alleges that C.C. Brown Law operated in the state without the appropriate license, neglected to deposit advance fees in trust accounts, refused to refund payments and made electronic withdrawals from clients' accounts without permission.
The charges will be heard by an administrative judge in August and could result in fines, Rothman said.
The FBI and other federal agencies raided three C.C. Brown Law offices in Utah on Tuesday. The Commerce Department is working with those agencies on the investigation, which Rothman said could also result in criminal charges for the firm's owners.
C.C. Brown Law's website was down on Friday. A recorded greeting on the answering machine of the firm's West Valley City, Utah, branch on Friday said the owner was retiring his law practice.
The Department of Commerce has taken similar actions against a number of companies across the country in recent years. Rothman said consumers should beware of services that demand money upfront.
"To make sure you're not a victim, never pay those advance fees up front," Rothman said. "If you suspect fraud or are being ripped off, contact us and report it as soon as possible."