Newport man pleads guilty in fraudulent debt-relief scheme
A Newport Beach man pleaded guilty in federal court Monday to participating in a fraud scheme that promised to help debtors pay off their credit cards but instead charged them secret upfront fees that ate up most of their payments for up to six months, according to authorities.
John Vartanian, 57, admitted he didn’t disclose the fees and made false statements to prospective customers while he worked as a salesman at two companies that pitched themselves as law firms that would negotiate settlements for debtors.
Vartanian pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud, according to a news release from federal officials.
He faces a maximum sentence of 20 years in prison at a hearing scheduled for Oct. 17 in Los Angeles.
“This defendant preyed upon victims that were already burdened by significant debt,” said Eileen Decker, U.S. attorney for the Central District of California. “He gave them false hope while stealing the money that could have been used to reduce their obligations.”
Vartanian is one of five defendants who have pleaded guilty in the scheme, according to authorities.
He and others never told customers they were taking at least 15% of the total debt as upfront fees, according to authorities.
In addition, they never paid promised refunds, authorities said.
The scheme ran from February 2010 to September 2012, federal officials said. During that time, the company changed its name from Nelson Gamble & Associates to Jackson Hunter Morris & Knight LLP.
Though the company essentially remained the same, Vartanian told customers that the new company couldn’t pay refunds, and he blamed any past problems on Nelson Gamble & Associates, authorities said.
The other defendants who have pleaded guilty are Jeremy Nelson of Laguna Niguel, Elias Ponce of Santa Ana, Christopher Harati of Anaheim and Athena Maldonado of Lake Forest, according to federal officials.
They too are awaiting sentencing.
--
Jeremiah Dobruck, jeremiah.dobruck2@latimes.com
Twitter: @jeremiahdobruck
