By Jenna Greene, from The National Law Journal

Federal and state consumer protection watchdogs on Wednesday [23] took aim at lawyers, filing more than three dozen suits targeting law firms and other entities for running illegal foreclosure relief scams.

The nationwide enforcement sweep, dubbed Operation Mis-Modification, was led by the Federal Trade Commission, the Consumer Financial Protection Bureau and attorneys general or other regulators from 15 states including New York, Florida and Michigan.

The suits—six by the FTC, three by the CFPB and 32 by the state attorneys general—make similar allegations: lawyers or other scammers charged illegal advance fees for services and falsely promised to prevent foreclosures or renegotiate troubled mortgages.

The defendants “prey on distressed homeowners,” Katie Fallow, deputy director for consumer protection at the FTC, told reporters on a conference call. “These schemes collect hundreds or thousands of consumers’ last dollars in advance fees based on false promises that they will help modify homeowners’ mortgages or prevent foreclosure.”

The agencies are seeking compensation for victims, civil fines and injunctions, and in some cases have also secured temporary restraining orders freezing the firms’ assets.

“The defendants disguised their false promises of foreclosure relief for struggling homeowners with claims that they were performing legal work,” according to the CFPB. “These tactics are used by foreclosure relief scams to attract victims, add credibility to their schemes, or exploit certain legal exemptions for the practice of law.”

Both agencies have gone after lawyers for similar misconduct before. The CFPB’s first enforcement action of any kind was against the Gordon Law Firm in Los Angeles in 2012 for an alleged foreclosure relief scam (the case is now pending in the U.S. Court of Appeals for the Ninth Circuit). The FTC has brought 48 actions against companies peddling fraudulent mortgage relief schemes since 2008.

The two agencies share jurisdiction for policing such frauds. Their goal, Fallow said, is to “allocate our resources efficiently and send a message that there are multiple cops on the beat.”

The FTC’s targets include Draper, Utah-based Danielson Law Group, which on its Facebook page bills itself as “The law firm for real people… Like you!” According to the FTC, the firm convinced consumers to pay advance fees ranging from $500 to $3,900, touting a success rate that topped 90 percent. In all, the firm took more than $35 million from distressed homeowners, the FTC said.

In a complaint filed in Nevada federal court, the FTC said the “defendants have provided little, if any, meaningful assistance to modify or prevent foreclosure.” The suit named principals Philip Danielson, Tony Norton, Sean Coberly, Tanya Hawkins, Chad VanSickle and Jennifer Danielson. A representative for the firm was not immediately reached for comment Wednesday.

The FTC also sued Jacksonville, Fla.-based Lanier Law. Since 2011, the FTC alleged in a complaint filed in U.S. District Court for the Middle District of Florida, the firm “preyed on financially distressed homeowners by luring them into paying upfront fees and other fees with promises that they will receive legal representation from foreclosure defense attorneys.”

Clients shelled out $1,000 to $4,000 up front but often never met or spoke to an attorney licensed in the state where they lived and received “little or no service,” according to the FTC.

Owner Michael Lanier, who was suspended by the Florida State Bar in July 2013, could not be reached for comment.

For more on this story go to: http://www.nationallawjournal.com/id=1202664322587/Feds-Sue-Law-Firms-in-Foreclosure-Relief-Scams#ixzz38VZwpRPj