Arizona Attorney General

Thank you, Arizona, for the pleasure and privilege of serving as...

Fri, 31 Dec 2010 15:24:44 -0700

Thank you, Arizona, for the pleasure and privilege of serving as your Attorney General.

This has been the hardest job I have ever loved! I have to agree with Bill Clinton when he said being AG was “the best job I ever had. I didn’t have to appoint or disappoint, and if I ever had to do anything really unpopular, I could blame it on the Constitution.”

As I get ready to leave office Monday, I recall vivid moments both good and not so good. The legal victories were sweet, but my list includes unforgettable personal experiences – some funny, some poignant and many inspiring. They include:

— Swearing-in. I broke the State Capitol tradition and took the oath of office in my hometown of Tucson, across the street from where my dad, who attended the ceremony, had his law office in the 1950s. I spoke about the challenges ahead and quickly learned they would be tougher than expected.

— Supreme Court curveball. Shortly after taking office, I defended Arizona’s school tax credit law before the U.S. Supreme Court. Appearing before the Court had been a seemingly unattainable dream. I was excited and more than a little nervous. Just seconds into my argument, Justice Ginsburg interrupted with a terse question: Did a case heard by the Court the week earlier weaken my argument? I swallowed hard, tried not to panic and admitted I had no idea what she was talking about. I had just been mugged by a 90-pound grandmother!

— Consumer education. Much of my most productive work never made headlines. Our consumer education efforts put more than 200,000 miles on our ancient Fraud Fighter vans and increased the number of volunteer-staffed satellite offices from a half-dozen to over 50. I filed scores of fraud cases, recovering millions for Arizona consumers, but in the long run our preventive education probably did the most good.

— Fighting meth. Methamphetamine use was soaring across the country eight years ago. Arizona was especially hard hit. The gaunt faces and vacant eyes of kids on meth still haunt me. When the Arizona Legislature refused to pass laws to move pseudoephedrine (the key ingredient in making meth) behind pharmacy counters, I started a city-by-city campaign to do it by ordinance. More than 45 cities and towns took action to stop the meth plague. Together we drove teenage meth use in our state down 65 percent.

— Protecting children in ColoradoCity. Utah Attorney General Mark Shurtleff and I agreed on a joint effort to fight child abuse in the polygamous communities of Colorado City and Hildale. We went to those FLDS strongholds to make clear we were not trying to change their religion or even their lifestyle, but to stop the abuse of children and women. One former FLDS leader who came to my office startled me by saying, “I can’t believe I’m here. A week ago I was praying for your death.”

— Combating mortgage fraud. Countless Arizona homeowners have been victims of loan modification scams, deceptive foreclosure practices and other frauds. The Arizona Legislature was little help, so I took action against dozens of fraudulent operators and sought to persuade lenders to treat their borrowers more fairly. Not all did, and I filed a lawsuit against Bank of America, citing its callous disregard for how its mortgage modification practices were hurting borrowers struggling to stay in their homes.

— Combating border crimes. Mexican drug cartels present a huge problem for Arizona and our nation. I worked on many fronts to fight the cartels, primarily by going after what matters most to them: money. My Office played a leading role in breaking up many human-trafficking and drug-smuggling operations. But I’m most proud of the $94 million settlement with Western Union. After intense negotiations, we reached an agreement that gave law enforcement vital access to money transfer data and set up a $50-million fund for crime fighting along the entire Mexican border.

— Record environmental settlement. Short-sighted development has done major damage to Arizona’s natural resources. One development company illegally bulldozed State Trust Lands, destroyed portions of seven Hohokam archeological sites and introduced a disease that killed at least 21 rare bighorn sheep. I will never forget the raw scars from the bulldozers or the video of blinded bighorns falling to injury and death. We coordinated five state agencies and put together a solid case. The defendants settled for a record $12 million.

— Election night. The Nov. 2 election returns quickly made it clear I wouldn’t be the next governor. I told supporters that night I was glad that after eight years of total immersion in a job I loved, I finally could go camping with my 11-year-old son. The next day at breakfast, Kevin asked, “Dad, about these camping trips. Exactly where are we going?”

It has been an honor to serve as your Attorney General. My thanks to the terrific professionals at the AG’s Office, to the law enforcement officers who do so much for us, and, most of all, to the citizens of Arizona for giving me this privilege. Now, on to camping!

Attorney General Terry Goddard announced that his Office today...

Tue, 21 Dec 2010 17:34:08 -0700

Attorney General Terry Goddard announced that his Office today filed a lawsuit against Bank of America Corporation and its affiliated companies (“Bank of America”) alleging violations of the Arizona Consumer Fraud Act and violations of the consent judgment entered in March 2009 between Arizona and the Countrywide companies owned by Bank of America.

Arizona Atty. Gen. Terry Goddard describes the reaction to his...

Tue, 21 Dec 2010 11:43:11 -0700

Arizona Atty. Gen. Terry Goddard describes the reaction to his lawsuit against Bank of America alleging mortgage fraud.

AG Goddard speaks to MSNBC about the Bank of America lawsuit.

Tue, 21 Dec 2010 11:24:49 -0700

AG Goddard speaks to MSNBC about the Bank of America lawsuit.

$80,000 Consent Judgment against Moving Company

Mon, 20 Dec 2010 17:42:26 -0700

Attorney General Terry Goddard announced today he has obtained an $80,000 consent judgment in Maricopa County Superior Court against Allstar Moving & Storage, Inc., of Chandler; its owner, Mohamed Elsayed, and its general manager, Amru Abdalla. Allstar operates a moving service under its corporate name, as well as under the name Allways Moving & Storage.

The Attorney General filed a lawsuit against Allstar in April, 2010, alleging that the company, while touting its “high quality service without the high prices” and flat, hourly rates in its advertising, routinely added significant charges to consumers’ invoices that rendered the advertised flat hourly rate false, including charges for gas, truck cleaning, and fictitious sales and special taxes. The additional, undisclosed charges typically added hundreds of dollars to consumers’ invoices.

The lawsuit also alleged that Allstar:

• Misleadingly advertised that it used experienced moving crews when, in fact, many of its movers had no moving experience at all.

• Falsely advertised that it was bonded.

• Failed to disclose that its “insured” status would only reimburse consumers up to 60 cents per pound of damaged or destroyed property, and that if a consumer wanted full reimbursement, he or she would have to purchase additional coverage from Allstar.

The consent judgment requires the defendants to pay $33,000 as restitution to eligible consumers, $37,000 as civil penalties, and $10,000 for investigative costs and attorneys’ fees.

The judgment also requires Allstar to comply with the Arizona Consumer Fraud Act and specifically prohibits the company from:

• Advertising any specific price for services without clearly and conspicuously disclosing any additional charges that will be added to the advertised price.

• Representing to consumers that it uses “experienced” movers unless they are in fact experienced.

• Representing that it is bonded unless true.

• Representing that it is insured unless, as included in its hourly rate charged to consumers, consumers will be provided full reimbursement for damage incurred as a result of Allstar’s actions.

• Charging consumers a sales or other tax on any of its products or services unless it remits such tax to a lawful taxing authority.

The case was handled by Assistant Attorney General Cherie Howe.

Attorney General Terry Goddard announced that his Office today...

Fri, 17 Dec 2010 15:27:05 -0700

The lawsuit, filed in Maricopa County Superior Court, was triggered by hundreds of consumer complaints and follows a year-long investigation into Bank of America’s residential mortgage servicing practices, particularly its loan modification and foreclosure practices.

Goddard stated that Bank of America, the nation’s largest residential mortgage loan servicer, should be leading the way out of the country’s foreclosure crisis. Instead, he said, “Bank of America has been the slowest of all the servicers to ramp up loss mitigation efforts in response to the housing crisis. It has shown callous disregard for the devastating effects its servicing practices have had on individual borrowers and on the economy as a whole.”

The complaint asks the court to hold the defendants in contempt for violating the consent judgment and to order them to pay restitution to eligible consumers and civil penalties, attorneys’ fees, and costs of investigation to the State. It further asks the court to order the defendants to pay up to $25,000 for each violation of the consent judgment and up to $10,000 for each violation of the Arizona Consumer Fraud Act.

Goddard noted that Arizona has been particularly hard hit by the foreclosure crisis, as evidenced by recent reports ranking the state second behind Nevada in foreclosures. Nevada plans to file a similar lawsuit against Bank of America today.

The consent judgment was entered into on March 13, 2009 to resolve the Attorney General’s allegations that Countrywide had engaged in widespread consumer fraud in originating and marketing mortgage loans. In the judgment, Countrywide agreed to develop and implement a loan modification program for certain former Countrywide borrowers in Arizona. Bank of America acquired Countrywide on July 1, 2008 and has assumed responsibility for Countrywide’s compliance with the consent judgment.

The complaint filed today alleges that, since the consent judgment was entered, Bank of America has repeatedly violated the judgment’s provisions related to loan modifications. Instead of providing the relief to which eligible homeowners were entitled, Bank of America has failed to make timely decisions on modification requests and proceeded with foreclosures while modification requests were pending in violation of the agreement.

The complaint also alleges that Bank of America has violated the Consumer Fraud Act by misleading Arizona consumers about its loss mitigation process and programs, including matters such as:
• Whether homeowners must be delinquent on their mortgage payments to be considered for a loan modification.
• How much time it would take to receive a decision from Bank of America on a modification request or a short sale request.
• Whether foreclosure would proceed while a modification or short sale request was pending, or while a homeowner was making trial payments.
• Whether the homeowner had been approved for a loan modification.
• Failure to provide valid reasons why the homeowner was declined for a modification.
• Whether the homeowner would be approved for a permanent modification if the consumer successfully made all trial modification payments.

As a result of Bank of America’s deceptive practices, many homeowners who were already contending with other financial hardships have been led to unnecessarily deplete their dwindling savings in futile attempts to obtain the promised relief and save their homes. Many homeowners who tried to obtain a modification from Bank of America ended up owing more principal on their loans or having less equity (becoming more “underwater”) in their homes. Others gave up their chances to pursue other financial options, such as short sales, while trying to modify their loans with Bank of America. These consumers endured months of frustrating delays, not knowing whether or when they would lose their homes. They called Bank of America and resubmitted their paperwork over and over again in futile efforts to get the help they were promised.

“I am filing this lawsuit today because, after years of delay and broken promises, Arizonans should not have to wait any longer to seek redress,” Goddard stated. “Our homeowners and communities need and deserve relief. Bank of America must be held accountable for its deceptive conduct and failed commitments.”

This case is being handled by Consumer Advocacy Division Chief Susan P. Segal and Assistant Attorney General Carolyn R. Matthews.

Goddard urged all homeowners who are in or are facing foreclosure to seek assistance as soon as possible. Homeowners can speak with a HUD-approved housing counselor by calling the Arizona Foreclosure Prevention Helpline toll-free at 1-877-448-1211. Borrowers who believe they have been the victim of mortgage fraud or other scams should contact the Attorney General’s Office at (602) 542-5763 or by filing a complaint on the Attorney General’s website, at www.azag.gov. Additional foreclosure prevention resources are also available on the Attorney General’s website.

Arizona Attorney General Terry Goddard today announced that he...

Tue, 14 Dec 2010 11:54:10 -0700

Arizona Attorney General Terry Goddard today announced that he is joining with the Arizona Credit Union League & Affiliates, the Arizona Bankers Association, and Consumer Federation of America to launch an innovative program to protect consumers and financial institutions from fake check scams.

Under the program, participating banks and credit unions will distribute a brochure created by the Consumer Federation called “Don’t Become a Target,” to every consumer who comes in to deposit checks or money orders of $1,000 or more or to withdraw $1,000 or more. Thirteen banks and credit unions in Arizona have agreed to participate.

“The goal is to educate consumers about these scams at the very point where they are at risk of falling victim to them,” said Susan Grant, CFA’s Director of Consumer Protection, who is coordinating the program.

In fake check scams, the consumer receives a genuine-looking check or money order under a ruse, and is asked to wire money somewhere in return. For instance, the check may be described as an “advance” on millions that the consumer has won in a sweepstakes or lottery. The consumer is instructed to send money to pay taxes on the award before being eligible to claim the rest of the prize.

In another popular scenario, the consumer is recruited to work at home as a “mystery shopper” or process payments for a company and is instructed to send money somewhere as part of the job. No matter the story, the check or money order is phony, and when it bounces, the victim usually owes the money back to the financial institution where it was deposited or cashed. Average losses from these scams are in the $3,000 to $4,000 range.

“It’s often impossible to detect counterfeit checks or money orders just by looking at them,” Goddard said. “The message that we want to give consumers is that there is no legitimate reason why anyone who wants to give them money would ask them to send money somewhere else in return. If that’s the deal, it’s a scam.”

Federal law gives consumers the right to access their funds quickly, usually within a day or two. But it is often difficult or impossible for the consumer’s financial institution to tell if there is a problem with a check or money order until it goes through the system to the person or company that supposedly issued it. That can take several days or weeks.

“This campaign helps consumers understand that they are responsible for the checks and money orders they deposit or cash,” stated Paul Hickman, President and CEO of the Arizona Bankers Association. “The consumer is ultimately in the best position to know if the source of the check or money order they’ve received is trustworthy,” Hickman said.

“Fake check scams are a serious problem for consumers. Credit unions want to do all they can to educate their members. That’s why we’re excited to be a partner in this consumer education program,” said Scott Earl, President and CEO of the Arizona Credit Union League & Affiliates.

Consumer Federation of America (CFA) is providing the brochure to participating banks and credit unions at no cost. To help the financial institutions prepare for the project, CFA gave them training materials about fake check scams and advice about handing out the brochures. In addition to the hard-copy brochure, which is in English on one half and Spanish on the other, there are electronic versions, in both languages, on CFA’s Web site at www.consumerfed.org/fakecheckscams. There, visitors will also find a new PowerPoint presentation that CFA has created for consumers and other educational materials about fake check scams.

Brochures will also be available to government agencies, such as the Arizona Attorney General’s Office, and nonprofit organizations in the state that conduct consumer education in Arizona.

Arizona is one of several states in which CFA is conducting this project to fight fake check scams. Participating financial institutions in Arizona are listed below. Arizona banks and credit unions that have not yet signed up to participate are welcome to do so, and should contact Susan Grant at CFA at 202-387-6121.

Arizona Financial Institutions Participating in Fake Check Consumer Education Project:

1st Bank Yuma
Arizona Business Bank
Bankers Trust Company
Coconino Federal Credit Union
Commerce Bank of Arizona
Desert Schools Federal Credit Union
Mutual of Omaha Bank
San Tan Credit Union
Southeastern Arizona Federal Credit Union
Southwest Airlines Federal Credit Union
Stearns Bank
TruWest Credit Union
Tucson Healthcare Affiliates Federal Credit Union

Protect Yourself from Holiday Scams: Holiday Consumer Safety Tips

Mon, 13 Dec 2010 11:16:00 -0700

Attorney General Terry Goddard today announced that his Office has launched a special holiday web page: www.azag.gov/consumer/holiday. The page provides answers to common questions about holiday shopping, charitable giving and other consumer problems during the holidays.

“With tight budgets for most Arizona families, it is especially important to be alert for scams and other consumer pitfalls this Holiday Season,” Goddard said.

The site includes a list of resources for holiday scam prevention, such as tips to prevent identity theft, tools to research charitable donations and how to ensure gifts are safe for those who receive them. Additional shopping tips and alerts will be posted on the site each week throughout the Holiday Season.

Attorney General Terry Goddard’s Top Five Tips for Preventing Holiday Rip-Offs

(1) Bring ads for sales and “special deals” with you to the store: Be sure the advertised or posted price matches the scanned price and check the receipt before leaving the store.

(2) Understand the new rules for gift cards: New rules state that gift card service fees cannot be charged until the card has been inactive for 12 months and cannot expire until at least five years after the date of purchase. Read the terms and conditions carefully.

(3) Do online shopping at secure websites: Identify secure websites by looking for web addresses that begin with “https,” and display a padlock or an SSL certificate at the bottom of the page. Use a credit card instead of a debt card.

(4) Watch out for restocking fees: Prior to purchase, ask the store if they will charge a restocking fee for the item if it is returned.

(5) Save all receipts, warranties and service agreements: Request warranties and service contracts in writing, and save receipts from all holiday season purchases.

For more information on these and other holiday shopping tips, visit Attorney General Goddard’s holiday consumer web page: www.azag.gov/consumer/holiday.

During or after the holiday season, if you believe you have been a victim of consumer fraud, please contact the Attorney General’s Office in Phoenix at 602.542.5763; in Tucson at 520.628.6504; or outside the Phoenix and Tucson metro areas at 1.800.352.8431. To file a complaint in person, the Attorney General’s Office has satellite offices throughout the state with volunteers available to help. Locations and hours of operation are posted on the Attorney General’s Web site, www.azag.gov. Consumers can also file complaints online by visiting http://www.azag.gov/consumer/complaintform.html.

Life Care Planning is an important task for all of us, whether...

Mon, 22 Nov 2010 14:25:07 -0700

Life Care Planning is an important task for all of us, whether young or old, healthy or facing challenges. Through increased awareness and access to information, Arizonans of all ages can make their choices known about who will manage their affairs in the event of an emergency. My Office has recently produced Life Care Planning for Everyone, a short video presentation that will encourage open discussions so that well reasoned choices can be made before an emergency — choices that will significantly reduce stress on families.

Three Phoenix Police Officers and One Former Officer Indicted for Theft

Thu, 18 Nov 2010 13:39:00 -0700

Attorney General Terry Goddard today announced the indictment of three Phoenix Police Officers and a former member of the Phoenix Police Department on felony charges related to money they received for off-duty security work they allegedly did not perform.

Former Phoenix Officer George Emil Contreras, 45, was indicted on four felony counts that include fraud, illegal control of an enterprise and theft, for actions he took during his employment with the department performing off-duty security services for multiple clients.

Also indicted on theft charges related to off-duty work they were hired to perform were three current members of the Phoenix Police Department: Sgt. Benjamin Hugh Sywarungsymun, 35, Officer Steven Paul Peck, 40, and Officer Aaron J. Lentz, 30.

Contreras was a Phoenix Police Officer for 18 years before he resigned in 2008. While employed by the department, he also served as an off-duty work coordinator, out of the South Mountain Precinct, for off-duty jobs for the alleged business victims: the Cotton Center Townhomes at 48th Street and Broadway, Laron Incorporated, Arizona Materials, and Eisenberg Properties, all in Phoenix.

The indictment alleges that from December 2005 through December 2007, Contreras committed fraud and theft on the businesses by submitting false documents to them in the form of invoices in advance of the work to be performed and accepting pay for the full hours of work indicated in the invoices, even though he did not work the full hours for which he was paid. Contreras is alleged to also have formed and used a business called Raptor Services to invoice and collect payment from the victim businesses. Sgt. Sywarungsymun, Officer Peck, and Officer Lentz are also alleged to have committed theft by accepting pay for hours of off-duty security which they did not perform, as coordinated by Contreras.

The alleged business victim that suffered the largest loss was the Cotton Center Townhomes, which involved a security job contracted with the Phoenix Police Department by three homeowners associations to help reduce crime in an area with a high volume of calls for police service, requiring two officers and a marked patrol car.

Contreras, as the coordinator, assigned a large majority of shifts to himself, as well as the other officers listed in the indictment. Contreras is alleged to have committed thefts in excess of $9,000, Lentz in excess of $2,000, Sywarungsymun in excess of $1,800, and Peck in excess of $1,700, all felony level thefts. Total losses alleged in the indictment are in excess of $16,000.

The case is being prosecuted by Assistant Attorney General Todd Lawson and was investigated by Special Agents in the Special Investigations Section of the Attorney General’s Office.

Attorney General Terry Goddard commended the U.S. Food and Drug...

Wed, 17 Nov 2010 12:36:00 -0700

Attorney General Terry Goddard commended the U.S. Food and Drug Administration (FDA) for sending warning letters today to four manufacturers of alcoholic energy drinks (AEDs). The letters assert that the caffeine in their alcoholic beverages, including popular brands Four Loko and Joose, are “unsafe food additives,” making these products adulterated under federal law.

Attorney General Goddard also applauds the federal Alcohol Tax and Trade Bureau for its announcement that it will require distributors and retailers to stop selling the alcohol energy drinks identified as unsafe by the FDA.

For the past several years, Goddard has issued warnings about the potential danger of alcohol energy drinks. Some are packaged in 23.5-ounce cans resembling energy drinks with fruit flavors like fruit punch, lemonade and watermelon. Some AEDs, such as Four Loko, contain the alcohol equivalent of four to five beers and the caffeine equivalent of four to five colas or one-and-a-half to two cups of coffee in just one can.

During the past year, medical and public health research have continued to confirm the dangers presented by these drinks, particularly among young people with whom these beverages are most popular.

“Today’s action represents a significant and necessary step forward in removing these dangerous products from the market,” Attorney General Goddard said. “By trading on the popularity of non-alcoholic energy drinks, AEDs attract young people who wrongly believe that the caffeine will offset the intoxicating effects of the alcohol. I applaud the FDA’s warning letters, which reject the manufacturers’ unfounded claims that these products are safe.”

Unfortunately, with increased consumption of these beverages among teens and college students, reports of alcohol poisoning, serious injury including sexual assault, and hospitalizations have become all too common.

“Over the past several months, we have heard about far too many incidents that have resulted in serious violence, injury or even death associated with consuming AEDs,” Goddard said.

A recent incident in Mesa involving an underage drinker provides another example of the danger of these drinks.

In 2008, Attorney General Goddard, along with other Attorneys General throughout the country, initiated investigations of the two leading manufacturers of AEDs at that time: MillerCoors Brewing and Anheuser-Busch. The investigations concluded with the companies agreeing to cease production of caffeinated alcoholic beverages altogether.

However, smaller AED manufacturers introduced products packaged in larger containers (up to 23.5 ounces) containing a higher percentage of alcohol (up to 12 percent alcohol by volume). FDA’s warning letters require the manufacturers to take prompt action to correct their violations of federal law and advise that failure to do so may result in enforcement action.

Goddard will be working with state and local officials to determine the further steps necessary to ensure prompt the removal of these dangerous products from the marketplace and to help educate young people about the dangers of self-mixed as well as pre-mixed alcoholic energy drinks.

Local Law Enforcement Joins Terry Goddard To Block Drug Cartels' Recruitment in Arizona

Thu, 28 Oct 2010 10:06:14 -0700

After traveling the Arizona border with local law enforcement officials, Attorney General Terry Goddard today announced new efforts to stop the Mexican drug cartels’ active recruitment of American citizens, and especially teenagers, to join their ranks.

Goddard announced that racketeering (RICO) money will be used to fund anti-gang programs in Arizona’s border communities. A key goal of these programs will be to prevent the cartels’ recruitment of high school students and other young Americans. The Santa Cruz Sheriff’s Office is receiving $50,000 for an anti-gang initiative with the Nogales Boys and Girls Club. The Yuma County Sheriff’s Office is getting $25,000 for a similar program with the Boys and Girls Clubs of Yuma and San Luis.

Investigations being done by his Office “had confirmed our worst fears” about the cartels’ expanding operations in southern Arizona, Goddard said. In response, earlier this year he created the Border Crimes Enforcement Team with funds from the Attorney General’s $94 million settlement with Western Union.

Goddard met Wednesday in Tucson with investigators from the Team, which is based there. Goddard said his investigators had uncovered plans to use violence to kidnap family members of a cartel associate living in Arizona to collect a drug debt. He said those plans were disrupted and no kidnappings occurred.

“The cartels’ ruthless commitment to protect their high profits can be stopped only by an equally determined commitment to block the flow of drug money into Mexico where it is used to finance their criminal operations, “Goddard said. “As I have told members of Congress and the President, our border cannot be secure as long as the cartels are so deeply entrenched, so well-funded and operate so brazenly.”

In letters to top federal officials earlier this year, Goddard called for “a major, multi-national law enforcement initiative aimed first and foremost at identifying cartel warlords by name and bringing them to justice by all means available.”

Goddard added that the cartels are moving more drugs across portions of the border where the federal government has exclusive jurisdiction, which hampers state efforts to stop the smuggling of drugs and humans into Arizona.

Terry Goddard Announces Indictment in Home Investment Fraud Case

Tue, 26 Oct 2010 15:33:49 -0700

Attorney General Terry Goddard today announced the indictments of Anthony Zandonatti and Andrew Silverstein, both 33 of Tucson, on multiple criminal charges including conspiracy, fraud, theft, money laundering, and illegally conducting an enterprise.

Zandonatti and Silverstein owned and operated AZI Rent2Own L.L.C (also known as Arizona Investments and AZI), a company claiming to “specialize” in mortgage investment and rent-to-own programs. The indictment alleges that between 2006 and 2008, 25 homes were involved in either straw-buyer or investor schemes perpetuated by AZI Rent2Own, where approximately 45 lending institutions were defrauded and 31 renters were victimized. Approximately $2.9 million in foreclosure losses occurred because of the alleged result these schemes.

FBI agents began investigating both Zandonatti and Silverstein approximately one year ago when numerous consumer complaints were filed against both suspects. The FBI determined that the suspects were orchestrating an elaborate scheme which defrauded both investors and the renters of numerous homes in Pima County using straw-buyers or investors to flip the properties, many of which had been rented to tenants under a rent-to-own agreement.

This case was investigated by the Arizona Division of the FBI, and is being prosecuted by Assistant Attorney General Michael Jette.

"Arizona Attorney General Terry Goddard this evening announced that his office has filed an appeal..."

Mon, 25 Oct 2010 19:00:00 -0700

“

Arizona Attorney General Terry Goddard this evening announced that his office has filed an appeal with the U. S. Court of Appeals for the Ninth Circuit of this afternoon’s decision by U.S. District Court Judge Roslyn Silver’s order staying the execution of convicted murderer and former prison escapee Jeffrey Landrigan.

Silver ordered the execution stayed after the Arizona Department of Corrections declined to reveal the name of the company that produced the drugs that are to be used in Landrigan’s execution. The Department has revealed both the quantity and expiration dates of the drugs and confirmed that they were lawfully obtained. The Department declined to reveal the manufacturer because Arizona law prohibits disclosure of the “identity of executioners and other persons who participate in or perform ancillary functions in an execution.” A.R.S. 13-757(c).

“Jeffrey Landrigan was appropriately sentenced to death and his victims are awaiting justice,” Goddard said. “We will appeal the District Court’s ruling immediately to the Ninth Circuit, and if necessary all the way to the United States Supreme Court this evening.”

Court personnel at both courts are on standby to accept appellate papers throughout the night.

If the stay is lifted, Landrigan is scheduled to be executed at 10 a.m. Tuesday.

”

- www.azag.gov

Attorney General Terry Goddard today announced that Damian...

Mon, 25 Oct 2010 18:59:55 -0700

Attorney General Terry Goddard today announced that Damian Andre, 36, of Camp Verde, has been sentenced by Maricopa County Superior Court Judge Daniel Martin to one year in county jail on fraud charges.

For several years, Andre served as President of Arizona Payroll Systems, Inc., which provided payroll services for small businesses in Camp Verde, Cottonwood and Sedona. Over a two-year period from 2005 to 2007, Andre collected worker’s compensation premiums from his small business clients but falsely reported the hours, wages and type of work to the State Compensation Fund of Arizona. Because worker’s compensation premiums are based upon type of work, hours worked and wages earned, Andre’s misrepresentations caused the State Compensation Fund of Arizona to be underpaid by $72,453 in premiums.

In addition to jail time, Andre was also sentenced to five years probation on the charge of fraudulent schemes and artifices, a class 2 felony, and three years probation on the charge of misrepresentation affecting premiums for worker’s compensation insurance, a class 6 felony. He was also ordered to pay $72,453 in restitution to the State Compensation Fund of Arizona and a $9,000 fine.

This case was investigated by the Arizona Department of Insurance Fraud Unit and prosecuted by Assistant Attorney General Beverly Rudnick.

Terry Goddard Tells U.S. Supreme Court Arizona Employer Sanctions Law Is Constitutional

Fri, 22 Oct 2010 10:38:06 -0700

Attorney General Terry Goddard today filed his final written argument in the State’s defense of the 2008 challenge to the State’s employer sanctions law.

The brief argues that the U.S. Supreme Court should uphold Arizona’s law, known as the Legal Arizona Workers Act, because Congress has specifically allowed states to impose “licensing and other similar sanctions” on employers who knowingly hire illegal workers.

One main theme of the brief is that the Arizona law “furthers the interest of both the State and the federal governments in having an effective employee verification system and a lawful work force in this country.”

Goddard has successfully defended the law before both the U.S. District Court and the U.S. Court of Appeals for the Ninth Circuit. Nonetheless, the U.S. Supreme Court has agreed to hear the case, and the Obama Administration has filed a brief supporting those who have challenged the law.

“Our law should be upheld,” Goddard said. “Congress went out of its way to reserve for the states the right to take action against employers who foster illegal immigration by hiring illegal workers. Arizona has done precisely what Congress said we could do in this area, and I am disappointed that the federal government has chosen to argue otherwise.”

The case is scheduled for oral argument in Washington, D.C., on December 8, 2010.

A copy of the brief is posted on the Attorney General’s website at: http://www.azag.gov/press_releases/oct/2010/09-115%20bs.pdf.

Attorney General Terry Goddard announced on Friday that...

Tue, 19 Oct 2010 12:50:40 -0700

Attorney General Terry Goddard announced on Friday that Guillermo Ricardo De La Vara, 68, of Phoenix, has been sentenced in Maricopa County Superior Court to three-and-a-half years in prison on charges of theft and fraudulent schemes and artifices.

Over a two-year period from 2005 to 2007, De La Vara fraudulently obtained millions of dollars from investors by selling promissory notes and interests in deeds of trust, called “lien investments” though his companies, “Mortgage Notes, Inc.” and “MNI Properties, LLC.” De La Vara falsely claimed that these lien investments were secured by real property, and would be appropriately recorded. However, neither De La Vara nor his companies had any legal right to the properties covered by many of the lien investments, and investors did not receive the monthly payments from the investments that they were promised.

De La Vara was indicted on 80 counts, including 19 counts of theft, one count of fraud, two counts of forgery, one count of illegal control of an enterprise and 57 counts of securities law violations.

In addition to prison time, De La Vera will be placed on seven years of probation upon his release. He is also required to pay the 26 investor-victims in the case restitution of $5.7 million and pay $125,000 in administrative penalties to the Arizona Corporation Commission.

The investigation of the case was led by Special Agents of the Securities Division of the Arizona Corporation Commission, and the case was prosecuted by Assistant Attorney General Michael Flynn.

Terry Goddard Urges Legislature to Adopt Borrowers’ Bill of Rights

Mon, 18 Oct 2010 11:05:08 -0700

Attorney General Terry Goddard today called upon the Arizona Legislature to enact a Borrowers’ Bill of Rights, which would guarantee the rights of homeowners with respect to mortgage servicing and make certain unscrupulous servicing practices unlawful under the Arizona Consumer Fraud Act.

“The foreclosure abuses we have seen have hurt Arizona homeowners and our economy,” Goddard said. “One-sided mortgage contracts and abusive foreclosure practices are unfair to consumers. They tip the balance of power decidedly and inappropriately in favor of lenders and against homeowners. It is time to balance the scales. Borrowers should have rights that can be enforced.”

Under the Bill of Rights, borrowers would have the right to:

● Receive timely and accurate responses to good-faith borrower inquiries;

●Receive clear information on how to avoid foreclosure;

●Pursue loss mitigation or loan modification negotiations whenever possible;

●Not have their home foreclosed during loan modification negotiations; and

●If and when foreclosure becomes necessary, to have such foreclosure based on accurate documents, verified by someone with personal knowledge of the information contained therein.

The Borrowers’ Bill of Rights would also make any violation of its provisions an unlawful practice subject to investigation and prosecution by the Attorney General under Arizona’s Consumer Fraud Act.

Goddard added, “It has become clear we need enforcement power to ensure that servicers live up to their commitment to their customers. The bill I am proposing today would give borrowers these important rights.”

Hundreds of Arizona borrowers have filed complaints with the Arizona Attorney General’s Office concerning abusive practices of their mortgage loan servicers. Despite federal efforts to encourage loan servicers to modify loans of borrowers at risk for foreclosure, consumers continue to complain of lenders failing to respond to their requests, misrepresenting the length of time the loan modification process will take and pursuing foreclosure while a loan modification is pending.

Goddard is one of 12 Attorneys General on the Executive Committee of the Multi-State Home Foreclosure Investigation announced on Wednesday. That investigation was prompted in part by disclosures of potentially unlawful robo-signing by loan servicers. “Questionable document signing practices, however, represent only one of many problems that borrowers are facing,” Goddard said.

The Dodd Frank Act, signed July 21, 2010, expanded Arizona’s ability to enact consumer protection laws such as this proposed legislation. The Act provides that federal regulations will not preempt state consumer protection laws unless they are inconsistent with federal law, and more strict state laws are not considered to be in conflict.

Because these mortgage-servicing practices have become an industry-wide problem, Goddard’s proposal would cover all companies that service mortgage loans in Arizona, from national banks to small mortgage companies. This ensures that every person with a mortgage in Arizona can expect the standards set forth in the Borrowers’ Bill of Rights from whatever company services their loan.

A copy of the Borrowers’ Bill of Rights can be found here:

http://azag.tumblr.com/post/1321746766/attorney-general-terry-goddard-today-called-upon

Attorney General Terry Goddard today called upon the Arizona...

Fri, 15 Oct 2010 12:05:24 -0700

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