Foreclosure prevention scams have been flourishing the country for years now as homeowners search desperately for ways to avoid foreclosure. While there are some legitimate services out there, many just prey on borrowers facing foreclosure and typically charge a fee anywhere from $1,500 to $4,000 for a service that is never performed.
A perfect example of one of these predators is Frederic Alan Gladle from Austin, Texas who ran a foreclosure prevention company out of Los Angeles. Gladle falsely promised more than a thousand homeowners he could prolong a foreclosure sale for up to six months in exchange for a fee. Up until his arrest this October, Gladle along with several associates ran this four year scam that netted over one and a half million dollars from distressed homeowners around the nation.
According to the indictment, Gladle would charge homeowners a fee of about $750 per month to extend foreclosure proceedings. He would later have his clients sign a deed granting 1/100th interest in the home to an unknowing individual undergoing bankruptcy. These borrowers had no idea that Mr. Gladle and his associates used their bankruptcy petition to help his clients avoid foreclosure.
Due to the fact that filing bankruptcy leads to an automatic stay, Gladle’s clients were temporarily protected because the servicer of the mortgage is required to go to court in order to collect on the debt. Once his clients wanted out of the 1/100th deeds, he would simply forge the debtors signature which whom is undergoing bankruptcy to void the deed.
“Mr. Gladle defrauded victims trying to save their homes, further exploited those in debt by stealing their identities, and wreaked havoc on both banks and the Bankruptcy Courts by manipulating the system. This is the latest example of heartless criminal activity by an individual who sought to capitalize on the misfortune of those affected by hard economic times,” said Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.
As part of his plea bargain, Gladle said that he will plead guilty to 1 count of aggravated identity theft and 1 count of bankruptcy fraud. He now faces a maximum sentence of up to 5 years for bankruptcy fraud, and a minimum sentence of two years for aggravated identity theft.
