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Public Counsel Uncovers Foreclosure Rescue Scam

U.S. Bankruptcy Court, Central District of California

A consumer seeking assistance from the Los Angeles Bankruptcy Court Self Help Desk came to the Self Help Desk seeking assistance with a fraudulent bankruptcy case that was filed in his  name.

He had hired a company, Home Recovery Trust, that promised to stop his foreclosure sale by representing him in predatory lending lawsuit against the lender.  The company swindled him thousands of dollars by making false promises and later filing a fraudulent bankruptcy without his knowledge or consent.

The scheme involved taking upfront fees from the victims, having them sign Specific Power of Attorneys, in some cases Quitclaim Deeds, placing their properties into the Michael Martinez Trustee, and having the victims then make monthly payments, payable to "Home Recovery Trust."

The consumer was distraught and informed our office that he believed there were hundreds of victims just like him that were defrauded by this company.

Public Counsel successfully assisted the debtor with filing a motion to reopen his case and then a motion to expunge the fraudulent bankruptcy from his record. 

Public Counsel also assisted the debtor in filing a complaint with the Office of the United States Trustee and San Bernardino County District Attorney's Office.

The perpetrators of this crime are now under arrest and the debtor is now able to clear his name. On Wednesday, April 20, 2011, the founder and owner, Luis Miguel Macias, was arrested and currently remains in jail.

Since his arrest, numerous other victims have come forward from Riverside, Los Angeles, Ventura Counties, and from as far north as Reno, Nevada. This is an ongoing criminal investigation and more arrests are expected.

Macias' victims are usually Spanish speaking and unaware of the California Loan Modification Law, under California Civil Code, § 2944.7, which went into effect October 11, 2009. Medina has a no-bail INS hold.