The Minnesota Department of Commerce has accused an Eden Prairie company of defrauding about 200 homeowners on loan modification services.
The state alleges that Modify My Loan US charged homeowners advance fees of $2,000 to $2,950 for loan modification services and did not give promised refunds when service wasn't provided. In total, the department said, Modify My Loan fraudulently charged the homeowners $362,203 in fees.
"Companies and individuals like these think they can line their pockets with hard-earned money from consumers struggling to stay afloat," Commerce Commissioner Mike Rothman said. "Not on my watch. We're going to put a stop to it."
The department said it has investigated several similar scams by other companies in recent months.
It accuses Modify My Loan of using false advertising and not telling customers of its "precarious financial condition." The company, which stopped operations in 2010, was "inadequately capitalized" from the start, the department said.
"From the outset, [Modify My Loan] was dependent upon receiving continuous infusions of money from customers in order to remain in business," the department said.
The department also said the firm was unlicensed when it started operating in the state.
The department is accusing Modify My Loan and its former owners with seven counts of misleading consumers and other violations. The four people involved are Maria Domek and her husband, Philip, real estate salesperson Mark Abdel and Richard Steele.
Each faces a maximum penalty of $10,000 per violation.
Joe Fru, a lawyer for the Domeks, said his clients did not defraud customers while they were involved with the company and that it was properly licensed during that time. The Domeks left the business after a dispute with the other owners, according to the Commerce Department.
Abdel did not respond to a request for comment.
Wendy Lee • 612-673-1712
