The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and California Attorney General Kamala D. Harris have announced the arrests of the owners and managing attorney of a law firm that allegedly took thousands of dollars in up-front loan modification fees for services that were never performed for homeowners, many of whom ended up losing their homes.
Gregory Flahive, Cynthia Flahive and Mike Johnson were arrested on 19 felony counts, including grand theft by false pretense, conspiracy and false advertising. They were booked at the Sacramento County Jail with bail set at $50,000 each.
‘The Flahives and their co-conspirator are charged with being wolves in sheep's clothing,’ says Christy Romero, deputy special inspector general for SIGTARP. ‘Even though they took thousands of dollars for their services, the Flahives and their co-conspirator did little, if any, legal work, and the result was disastrous, as trusting homeowners lost what little money they had left and, in some cases, lost their homes to foreclosure. SIGTARP and its law enforcement partners are shutting down mortgage modification fraud, and holding a degree in law will not be a sufficient defense against prosecution.’