Rancho Cordova lawyer charged with
swindling distressed homeowners
Sacramento-area lawyer James Sandison, already facing State Bar charges of misusing his client trust account and named in a $60 million loan modification fraud suit by the attorney general, has now been charged by the State Bar with “swindling distressed homeowners.”
Principal and founder of U.S. Loan Auditors and general corporate counsel for My U.S. Legal Services, Inc., Sandison, 55, provided forensic loan audits, guaranteed foreclosure prevention and then did nothing to help prevent the foreclosures, according to bar prosecutors. One of 11 homeowners named in the State Bar complaint paid Sandison $56,000 over a nine-month period. Others paid him between $2,000 and $24,000 after he promised to stop foreclosure. Some clients lost their homes.
Sandison [bar number 148812], whose businesses are located in Rancho Cordova, is charged with 11 counts of moral turpitude, dishonesty and corruption. He also was charged Oct. 27 with making untrue or misleading representations, unfair competition, collecting advance fees, failure to provide proper disclosures, collecting advance fees from clients in foreclosure and failure to register his businesses as foreclosure consultants.
“The State Bar continues to aggressively prosecute those lawyers engaging in loan modification misconduct,” said Chief Trial Counsel James Towery. “We have removed from practice 17 of these lawyers with more disciplinary proceedings pending. This small group has caused significant public harm.”
According to the State Bar charges, Sandison defrauded the homeowners by making promises to avoid foreclosure that he never kept. Those allegations are similar to charges filed against Sandison, his companies and four others by Attorney General Jerry Brown on Oct. 6. In that suit, Brown seeks $60 million in civil penalties, restitution for victims and permanent injunctions to keep the defendants from fraudulently marketing forensic loan audits and legal services that have no value. The State Bar assisted Brown’s office and the Department of Real Estate in the investigation.
The attorney general’s suit alleged that homeowners paid thousands of dollars for forensic loan audits, which the companies said could be used as the basis for suits against lenders. Forensic loan audits purportedly show instances in which lenders have violated rules ranging from consumer privacy requirements to calculating mortgage amounts. Many homeowners were persuaded to stop making their loan payments and instead file lawsuits. As a result, they lost thousands of dollars and, in some cases, their homes.
The suit said the lawyers used “a variety of deceptive advertising and marketing techniques to persuade homeowners they had been victims of ‘predatory lending.’” They claimed that suing the lenders would give the homeowners leverage in obtaining a loan modification, staving off foreclosure or collecting damages.
Many clients took the advice “and as a result placed themselves in even greater danger of losing their homes,” the attorney general’s suit said. “Defendants then bilk their clients for months, collecting thousands of dollars in fees for ‘legal services,’ when in reality [they] do little more than file and serve a boiler-plate complaint. In order to keep the monthly payments flowing, Defendants dodge their clients’ phone calls, refuse to provide their clients any accounting of how their money is being spent and/or string their clients along with false assurances that a settlement is in progress, or that litigation takes time.”
Sandison also was named by the State Bar in a separate case in October. He was charged with hiding $300,000 in collections he received on behalf of his client, failing to put funds into a client trust account and stealing money from his partner and client.
http://www.calbarjournal.com/November2010/TopHeadlines/TH9.aspx
