BOSTON (Legal Newsline) -- Massachusetts Attorney General Martha Coakley on Tuesday filed a lawsuit against a group of businesses that allegedly solicited and spent more than $350,000 in illegal advance fees for purported foreclosure prevention services.
Coakley alleges that since 2009 a group of five individuals, Paula Carvalho, John Schumacher, Pricila Trancoso, Gailon Joy and Obeilson Matos, operated a series of organizations that claimed to offer legal and financial services, including foreclosure-related services, to distressed homeowners.
Also named as defendants were Alliance for Affordable Housing, the Global Advocates Foundation Inc. and the Alliance for Hope Network Inc.
The defendants allegedly portrayed themselves as tax-exempt, non-profit organizations but sought financial gain for their directors and officers. The defendants also allegedly engaged in the unauthorized practice of law.
"We allege these defendants targeted and took money from homeowners facing foreclosure, promising to help them stay in their homes, but instead used that money for personal expenses," Coakley said in a statement.
"Through our HomeCorps program, our office has obtained direct relief and free services for homeowners, and we will continue our efforts to combat deceptive foreclosure rescue schemes that take advantage of struggling borrowers."
The defendants allegedly required homeowners to give deposits of up to 25 percent of their gross monthly incomes and claimed the deposits were needed to be eligible for federal and other mortgage relief programs.
The lawsuit also alleges the defendants collected and spent more than $350,000 in deposits, using the funds for personal expenses.
Coakley files lawsuit against foreclosure relief groups
