Owners of a Florida-based law firm were ordered to pay close to $4.6 million to settle claims that they allegedly ran a mortgage loan modification and foreclosure rescue scheme that targeted Hispanic homeowners.
The consent order puts an end to a lawsuit originally launched by the Department of Justice in 2018 against law firm Advocate Law Groups of Florida P.A. and its owners, Jon B. Lindeman, Jr. and his wife, Ephigenia K. Lindeman.
The DOJ’s lawsuit claimed the couple violated the Fair Housing Act (FHA) by discriminating against Hispanic homeowners when they were running their predatory rescue services.
According to the DOJ, from 2009 through 2015, Lindeman and his wife targeted Hispanic homeowners through Spanish-language advertising that promised to cut mortgage payments in half. The DOJ said some of the homeowners targeted had limited English proficiency.
The settlement, which was announced last week, also includes a third defendant, Haralampos “Bob” Kourouklis, who is Ephigenia Lindeman’s father. Kourouklis ran a company called Summit Development Solutions USA, LLC, which provided mortgage modification services to clients of ALG. Kourouklis’ name was added to the lawsuit in an amended complaint in 2021.
The department alleges that during that six-year period, Lindeman and his wife promised hundreds of Hispanic homeowners lower monthly payments in exchange for thousands of dollars of upfront and monthly fees.
Despite charging high fees, the defendants did little or nothing to help clients obtain loan modifications, the DOJ said.
Homeowners who opted for the loan modification services were supposedly instructed to stop making monthly mortgage payments and to stop communicating with lenders. In turn, some of the defendant’s clients went into default or lost their homes.
Kristen Clarke, assistant attorney general at the DOJ, said in a statement on Friday that targeting homeowners with limited English proficiency is “reprehensible and illegal.”
“Homeowners of color and other protected groups must be safeguarded from discriminatory targeting that can lead to grave financial loss, including loss of one’s home. We will continue to use our federal civil rights laws to protect the rights of homeowners,” Clarke said.
The DOJ filed the suit in 2018 after three homeowners and members of their families filed complaints of discrimination with the Department of Housing and Urban Development (HUD).
After investigating the matter, HUD issued charges of discrimination and referred the case to the DOJ for litigation.
Per the consent order, the defendants must pay close to $4.6 million to compensate homeowners impacted by the alleged scheme. Out of the sum, defendants must pay a total of $95,000 to three intervenors and a civil penalty of $5,000 to the United States.
Most of the monetary judgement, however, is suspended because the defendants are unable to cover the sum, the DOJ said.
For the next five years, the defendants are required to submit updated financial statements and if there are any material misrepresentations the entire judgement will be reinstated, the DOJ said.
Defendants are also barred from providing any mortgage relief assistance services and are required to implement nondiscriminatory policies in all future real estate-related businesses, the department noted.