AG

Top Story
  • Schuette Encourages Michigan Residents to Register for Consumer Education Programs

    The Department of Attorney General’s Consumer Protection Division offers a variety of seminars focused on keeping Michigan consumers safe and up-to-date on the tricks criminals are using to steal from consumers.

    Programs on the following topics are available: Investment Fraud, Identity Theft, Online Safety, Home Repair and Improvement, Phone, Mail and e-Scams and In-Home Care and Senior Residences. The details of each event as well as an event calendar are listed on the Department of Attorney General website. All events are free and open to the public. To attend residents are asked to contact the venue to RSVP prior to the seminar. You can also request a Consumer Protection Education Presentation in your community by submitting an online request form.

    To register your site for a presentation please complete the online registration form.

     

     



RECENT NEWS

Press Releases
Schuette: South East Michigan Man Enters Guilty Plea for Role in Mortgage and Debt Management Scheme

LANSING – Michigan Attorney General Bill Schuette today announced that Pasquale Longordo, 39, of Birmingham, and his company Modify Loan Experts, LLC, pleaded guilty to two felonies and 27 misdemeanors for stealing money from Michigan residents who were facing mortgage foreclosures or needed help managing their credit card debt.

“Today’s guilty plea brings some closure and more importantly restitution to the men and women left in a financial hardship due to this man’s deception,” said Schuette. “Individuals who take advantage of people when they are going through a hard time for their own personal benefit will not be tolerated. I want to thank my Homeowner Protection Unit for their diligent work in bringing this case to a close.” 

Longordo pleaded guilty in front of Judge Wendy Potts of Oakland County Circuit Court to the following charges:

  • One count of False Pretenses, a five year felony;
  • Six counts of Attempted Debt Management Act, a misdemeanor;
  • Seven counts of Credit Services Protection Act violations, a misdemeanor; and
  • One count of Unemployment Compensation Fraud.

Longordo also paid $125,000 in restitution at today’s hearing. The money will be distributed to his victims.  

Longordo is scheduled to be sentenced on September 27, 2016, at 8:30 a.m. in the Oakland County Circuit Court.

The Deapartment of Attorny General was assisted on this case by the Federal Housing Finance Agency, Office of Inspector General.

“Pasquale Longordo took advantage of victims desperate to keep their homes. He not only mislead them in his ability to negotiate on their behalf, rendering them helpless, but he also took their money and used it for his personal gain,” said  Catherine Huber, Special Agent in Charge, Midwest Region, Federal Housing Finance Agency, Office of Inspector General. “The guilty plea today is the first step in holding him accountable for his criminal conduct.  Our office is committed to working with our law enforcement partners to seek justice for victims of this type of fraud.”

Case Background

Longordo and Modify Loan Experts allegedly promised victims that they would have an attorney assigned to represent them and negotiate mortgage modifications on their behalf with mortgage companies.  However, this did not happen and many victims lost their homes as a result.

Additionally, Longordo, who also operated a credit card debt management service, allegedly told debt management victims he was putting their funds into an escrow account and that he would use the payments to negotiate their debt with credit card companies.  In reality, Longordo put the victims’ funds into a regular bank account and allegedly used that account like his personal ATM.

During this time, Longordo allegedly received unemployment compensation although he was ineligible. 

Mug shot of Longardo

 

###

Schuette: Genesee County Man Sentenced to Up To 15 Years for Failure to Stop at a Fatal Accident He Caused

LANSING - Michigan Attorney General Bill Schuette today announced the sentencing of Scott Gunn, 27 of Burton, to 36 months to 15 years in prison on one count of Felony Failure To Stop When At Fault At An Accident Resulting In Death, in regards to a 2013 hit-and-run accident that resulted in a man’s death.

Gunn was convicted in front of Judge Joseph Farah on July 25, 2016. This sentencing marks the fifth felony for which Gunn has been convicted and sentenced. He was previously convicted and sentenced for a Carrying a Concealed Weapon, Possession of a Firearm During Commission of a Felony, firing in or at a dwelling and Tampering with Evidence. 

“While nothing will undo the events of this 2013 accident, my hope is that Mr. Lee’s family will feel a small sense of justice knowing that the man responsible has been sentenced for his crime,” said Schuette. “I have said it before but I feel it bears repeating. No one is above the law. And you cannot cover up a crime with another crime. The conclusion of this case and today’s sentence once again prove that our justice system works.”

Case Background

In October 2013, the Genesee County Prosecutor's Office requested a Special Prosecutor from the Department of Attorney General for the investigation and prosecution of this case because the defendant’s mother who was also charged with evidence tampering, Sherry Long, was employed as a crime victim advocate for the Genesee County Prosecutor at the time of the accident. Scott Gunn’s father, Leon Gunn was also charged with tampering with evidence in the case.

After an initial investigation by the Flint Police Department, it was determined that at 11:30 pm on September 28, 2013, Jeffrey Lee was struck by a black extended cab Chevrolet Silverado allegedly registered to Sherry Long and driven that night by her son, Scott Gunn.  Following the collision, Gunn fled the scene without offering assistance to the victim, Jeffrey Lee.  In the early morning of September 29, 2013, Lee was pronounced dead resulting from injuries sustained in the accident.

Gunn’s mother Sherry Long, formerly a Genesee County Prosecutor’s Office Crime Victim Advocate stands convicted of one felony – Tampering with Evidence.  Scott Gunn’s father Leon Gunn stands convicted of one felony – Tampering with Evidence.  Long and Gunn conspired to cover up the hit and run collision and tamper with the evidence by repairing the truck in secret.

Today’s sentencing concludes this investigation.

###

Schuette Encourages Attendance at September Consumer Education Programs

LANSING – Attorney General Bill Schuette is today challenging Michigan residents to attend at least one of the 29 community seminars offered through his office in September. Every month the Department of Attorney General’s Consumer Protection Division offers a variety of seminars focused on keeping Michigan consumers safe and up-to-date on the tricks criminals are using to steal from consumers.

This September the following programs will be offered: Investment Fraud, Identity Theft, Online Safety, Home Repair and Improvement, Phone, Mail and e-Scams and In-Home Care and Senior Residences.

“This month I am challenging Michigan residents to take an hour out of their busy schedule to learn up-to-date ways to protect themselves and their families,” said Schuette. “If everyone attends just one of these programs, we will be working toward a safer community and a safer Michigan.”

The details of each event as well as an event calendar are listed on the Department of Attorney General website. All events are free and open to the public. To attend residents are asked to contact the venue to RSVP prior to the seminar. You can also request a Consumer Protection Education Presentation in your community by submitting an online request form.

Consumer Protection Education Program Background

In 2015, over 730 Consumer Education programs educated more than 15,000 consumers. This year alone the Attorney General’s Consumer Protection Division has held more than 470 events educating over 10,000 consumers.

Additionally, the Department of Attorney General is devoted to protecting children across the state of Michigan through safety programs like OK2SAY and CSI (Cyber Safety Initiative). In 2016 alone the OK2SAY and CSI presentations have had over 100,000 attendees.

Register for a Consumer Education Presentation

Consumer Education Presentations are available for your group, club or class on the topics outlined above.

To register your site for a presentation please complete the online registration form. You may also print out a copy of the registration form and submit via mail to the following address:

Michigan Department of Attorney General
Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909

###

Schuette: Mulholland Brothers Found Guilty on All Counts in $18 Million Real Estate Ponzi Scheme

LANSING­ – Michigan Attorney General Bill Schuette today announced that James Mulholland, of St. Petersburg, Florida and Thomas Mulholland, of Midland, both 59, have been found guilty by a jury on 8 felonies each for the Ponzi Scheme they ran through their Lansing-based business Mulholland Financial.

“These men got themselves in a financial bind and instead of owning up to their mistakes they chose to defraud Michigan residents of their hard earned savings, said Schuette. “I hope that this verdict will provide some closure and relief to the victims of these men.”

Each brother was convicted of the following charges in Ingham County District Court on August 5, 2016:

  • One count of Criminal Enterprises - Conducting, a felony punishable by up to 20 years in prison and/or a $100,000 fine;
  • One Count of Conspiracy to Commit Criminal Enterprise – Conducting, a felony punishable by up to 20 years in prison and/or $10,000 fine;
  • One count of False Pretenses -$20,000 Or More But Less Than $50,000, a felony punishable by up to 15 years in prison and/or a fine of $15,000 or three times the value of the property that was involved, whichever is greater;
  • False Pretenses - $1,000 Or More But Less Than $20,000, a felony punishable by up to 5 years in prison and/or a fine of $10,000 or three times the value of the property that was involved, whichever is greater;
  • One count of Blue Sky Laws- Fraudulent Schemes/ Statements, a felony punishable by up to 10 years in prison and/or $25,000 fine;
  • One Count of Securities Fraud, a felony punishable by up to 10 years in prison and or a $500,000 fine;
  • One Count of Blue Sky Laws Offer/Sell Unregistered Securities, a felony punishable by up to 10 years in prison and/or $25,000 fine; and,
  • One Count for Violation of the Securities Act, a felony punishable by up to 10 years in prison and or a $500,000 fine.

The Mulholland brothers are currently being held in the Ingham County Jail and will return for sentencing in Ingham County Circuit Court before Judge William Collette on August 31, 2016 at 1 p.m.

Case Background

Thomas and James Mulholland started their business, Mulholland Financial in 1987. They bought real estate to be used as rental properties mostly in college towns. At the height of their business Mulholland Financial managed $22 million worth of highly leveraged real estate however they were not prepared for the recession in 2008.

Starting in 2009 until they filed for bankruptcy in 2010, the brothers raised almost $2 million from investors. They made no mention that their business was in trouble and promised a 7% rate of return from the real estate profits and that the principal and interest were guaranteed and could be liquid within 30 days of making a written request.

In reality almost every month from January 2009 to February 2010, Mulholland Financial lost money and new investor money began being used to pay off earlier investors. The Mulholland brothers knew the business was losing money and consciously decided to purchase more property in an attempt to get themselves through the crash. To do so, they increased their attempts to procure investors. At the end of 2009, they reached out to previous investors and urged them to reinvest. They again said there would be a guaranteed 7% return and they also indicated that 2009 had been their best year ever, not revealing any of the financial problems they were facing.

Mulholland Financial was forced to file for bankruptcy in February of 2010 due to overwhelming debt. By this time there were multiple investigations being conducted into the business practices. The case sat dormant with another agency until spring of 2016 until Schuette’s office picked up the case. Over 250 investors lost $18.3 million.

Consumer Tips For Safe Investing

Schuette encourages Michigan citizens to exercise caution before investing their money with those who promise exorbitant returns. 

"Do your homework before handing over your hard-earned money," said Schuette.  "Take your time, ask questions, and be sure to confirm your broker is in good standing before signing on the dotted line."

Key tips to avoid falling victim to a Ponzi scheme or investment fraud include:

  • Check out your broker or adviser. Confirm that your broker or financial adviser is registered and in good standing. Contact the Bureau of Commercial Services with the Department of Licensing and Regulatory Affairs, at 517-241-6345, to check out your broker or adviser.
  • Beware of strangers touting strange deals. Trusting strangers is a mistake anyone can make when it comes to their personal finances.  Almost anyone can sound nice or honest on the telephone.  Say "no" to any investment professional who presses you to make an immediate decision, giving you no opportunity to check out the salesperson, firm and the investment opportunity itself.  Beware of anyone who suggests investing your money into something you don't understand or who urges that you leave everything in his or her hands.
  • Take your time - don't be rushed into investment decisions. Salespersons who use high-pressure tactics to force an investor into an immediate decision are almost always pitching frauds. They don't want you to think too carefully or find out too much because you may figure out that it's a scam.
  • Keep tabs on your investments. Be wary when a financial planner says "leave everything to me," or "the plan is too complicated to tell you."  Everything should be clear and explainable to you.
  • Monitor the activity on your account.  Insist on receiving regular statements.
  • Ask Questions.  Never be embarrassed or apologetic about asking questions for trading activity that looks excessive or unauthorized.  It's your money, not your broker's.
  • Keep Diligent Records.  Keep all of your records relating to your investments, including notes of conversations you have with brokers, salespeople, and financial advisers.

Consumers can find helpful advice and a list of questions to consider in Attorney General Schuette's Consumer Alert for Ponzi Schemes, available on Schuette's website at http://1.usa.gov/AGPonziAlert.  Attorney General Schuette also offers specialized consumer advice for Michigan seniors on how to avoid investment fraud through the Senior Brigade website, http://bit.ly/investmentfraud.  

###

Schuette: Barclays to Pay over $6 Million for Defrauding Government Entities and Non-Profits in Michigan

LANSING ­– Michigan Attorney General Bill Schuette today announced a $100 million national settlement with Barclays Bank PLC and Barclays Capital Inc. that will bring $6,288,359.48 to Michigan. Barclays' alleged fraudulent and anticompetitive conduct involving the manipulation of LIBOR cost government entities and non-profits across the country millions of dollars.

LIBOR is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers.

“This company took advantage of government entities and non-profits during an already trying financial time for our country as a whole,” said Schuette. “Misleading customers into thinking that their investments were safe when the company was in trouble and taking advantage of trusting customers to bolster their trade positions is unacceptable and today’s settlement holds them accountable for their illegal actions.”  

Government entities and not-for-profit organizations in Michigan were defrauded of millions of dollars when they entered into swaps and other investment with Barclays without knowing that Barclays and other banks on the U.S. dollar (USD)-LIBOR-setting panel were manipulating LIBOR and colluding with other banks to do so.

Restitution Eligibility  

Michigan entities that entered into LIBOR-linked swaps and other investment contracts with Barclays between 2005 and 2010 will be notified if they are eligible to receive restitution from the $6,288,359.48 given to Michigan from a damages fund of $93.35 million. The balance of the settlement fund will be used to pay costs and expenses of the investigation and for other uses consistent with state law.

Case Background

The multi-state investigation, conducted by States Attorneys General, revealed that Barclays manipulated LIBOR through two different kinds of fraudulent and anticompetitive conduct.

First, during the financial crisis period of roughly 2007-2009, Barclays' managers frequently told LIBOR submitters to lower their LIBOR settings in order to avoid the appearance that Barclays was in financial difficulty and needed to pay a higher rate than some of its peers to borrow money. The LIBOR submitters complied with the instructions and suppressed their LIBOR submissions during that period.

Second, at various times from 2005 to 2007 and continuing at least into 2009, Barclays’ traders asked Barclays’ LIBOR submitters to change their LIBOR settings in order to benefit their trading positions, and the submitters often agreed to the requests. At times, those requests came from traders outside the bank, and Barclays traders agreed to pass them along to Barclays’ submitters, thus colluding with other banks. Barclays also believed that other banks’ LIBOR submissions likewise did not reflect their true borrowing rates, and that therefore, published LIBOR did not reflect the cost of borrowing funds in the market, as it was supposed to do.

Other states joining the Barclays settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Vermont.

  

###