Company founder gets prison for scheme to defraud distressed homeowners

Mortgage modification and foreclosure rescue schemes proliferated after the financial crisis.
(Paul Sakuma / AP)

Following the housing crash last decade, 21st Century Legal Services Inc. offered homeowners facing foreclosure what seemed like a lifeline.

All they had to do was pay fees to the Rancho Cucamonga firm, which promised to get their loans modified so their payments would be affordable. In the meantime, they were told they could stop paying their mortgage and communicating with their lenders.

But it was all part of a fraud that ended disastrously for thousands of customers, according to the U.S. attorney’s office, with many still losing their homes after paying fees for services that “were never provided.”

Federal prosecutors charged that 21st Century repeatedly pocketed those fees, cheating 4,000 plus homeowners out of more than $7 million in a nationwide scam.


On Monday, a federal judge in Riverside sentenced the alleged ring leader and company founder, Andrea Ramirez, 47, of Rancho Cucamonga, to 18 years in federal prison.

United States District Judge Virginia A. Phillips also ordered Ramirez, who pleaded guilty to one count of conspiracy to commit mail and wire fraud, to pay back victims nearly $6.8 million.

Ten other defendants have also been convicted for their roles at 21st Century, with the last two scheduled to be sentenced later this month.

“Ramirez and her co-defendants made false promises to desperate homeowners, often took the last of their money and then abandoned them,” said U.S Atty. Eileen M. Decker in a statement.


Ramirez’s attorney declined to comment.

Mortgage modification and foreclosure rescue schemes proliferated after the financial crisis as struggling homeowners looked for a way to save their homes.

In 2009, the California Department of Real Estate issued a consumer alert warning homeowners about potential modification scams, saying there were “predators” looking to take “advantage of those who are or may be vulnerable.” It recommended consumers contact their lender directly or use a free service.

Two years ago, three Orange County men were arrested for their alleged roles in a scheme that defrauded more than 1,800 homeowners out of $12 million. A trial is pending.


Ramirez and others involved with 21st Century defrauded homeowners from the summer of 2008 to the end of 2009, according to a grand jury indictment. The company operated under several other names, including Fidelity National Legal Service.

Employees found homeowners through cold calls, newspaper ads and mailings. The company also controlled websites advertising its services.

It was able to secure business by falsely claiming to operate a program sponsored by the federal government. It promised customers could receive new loan terms with lower interest rates and reduced payments, and that fees would be refunded if 21st Century was unable to obtain the promised modification, according to the indictment.

However, the company “rarely was successful in obtaining loan modifications for homeowners, and rarely refunded fees to homeowners,” the indictment said.


“They almost never achieved what they promised and it’s not clear that they ever achieved what they promised,” said Assistant U.S. Atty. Thomas Stout, who is prosecuting the cases.

He added that the defendants have been ordered to make their victims whole, but given their remaining assets that’s unlikely to happen.

Twitter: @khouriandrew