INSURANCE MAY COVER LIVING EXPENSES

INSURANCE COMMISSIONER DAVE JONES REMINDS WILDFIRE EVACUEES THAT INSURANCE MAY COVER LIVING EXPENSES Basic Necessities May Be Provided by Assisted Living Expenses (ALE) Insurance Commissioner Jones today reminded fire evacuees in California that they may be eligible for reimbursement for additional living expenses due to mandatory evacuations. The California Department of Insurance (CDI) is currently monitoring several fires in the state, including the Vallecito Fire in San Diego County and the Buck Fire in Riverside County, which have the most potential for damage and where mandatory evacuations have been ordered. “Anyone who has been forced to evacuate their home due to the fires in San Diego or Riverside Counties and elsewhere should check their insurance policies,” said Commissioner Jones. “Many policies cover additional living expenses people might incur because they’ve been ordered to evacuate. Those expenses include hotel stays and meals.” Homeowners are covered under what is known as ALE, or additional living expenses. This permits them to maintain their normal standard of living by covering the increased living expenses incurred as a result of damage caused by the fire or a mandatory evacuation. ALE coverage typically includes extra food and housing costs, furniture rental, relocation and storage costs, telephone installation and extra transportation expenses to and from school or work. “Evacuating your home for a wildfire is extremely unnerving,” said Commissioner Jones. “But knowing you’re adequately covered for those unexpected expenses after such a disaster may lessen the anxiety just a little.” Commissioner Jones reminds all Californians that the department is here to help. He also urges residents to get prepared for wildfires today by making sure their insurance policies are up to date and to conduct a home inventory today. A free guide is available on the Department of Insurance Web site at www.insurance.ca.gov, or by calling the CDI Consumer Hotline at 800-927-HELP. Current California wildfires include: • The Chips Fire in Sacramento County which started on July 29. The fire is approximately 120 miles north of Sacramento in the Plumas National Forest and is 20% contained. It is estimated to be totally contained by August 31. 900 residences are threatened including, four commercial and 36 outbuildings. Mandatory evacuations have been ordered. • The Vallecito Lightning Complex Fire in San Diego County which started on August 12. The fire is on the eastern side of San Diego County and is 60% contained. 400 structures are threatened. Mandatory evacuations have been ordered. • The Buck Fire in Riverside County which started on August 14. The fire is on Sage Road between Lewis Valley Road and Buck Road in Aguanga and is 60% contained. Four structures have been destroyed and 50 additional structures are threatened. All evacuations have been lifted. • The Wye Fire in Lake County which started on August 12. The fire is burning at the Hwy 20 and Hwy 53 intersections, east of Clearlake Oaks and is 80% contained. Two structures and one outbuilding have been destroyed, two structures have been damaged. All evacuations have been lifted.

Orange County DA Office - MAN SENTENCED FOR DEFRAUDING HUNDREDS OF VICTIMSIN REAL ESTATE LOAN MODIFICATION SCAM

Orange County DA Office: MAN SENTENCED FOR DEFRAUDING HUNDREDS OF VICTIMSIN REAL ESTATE LOAN MODIFICATION SCAM - *Hundreds of fake letters with CitiFinancial or CitiMortgage logos sent as part of scam

SANTA ANA - A man was sentenced today to a year in jail and five years of formal probation today for defrauding hundreds of victims in a real estate scam by offering home loan modification assistance to struggling homeowners across the country. Andrew Michael Phalen, 25, Mission Viejo, pleaded guilty May 16, 2012, to one felony count of conspiracy to charge illegal upfront fees and one felony count of conspiracy to commit grand theft. As part of the sentence, Phalen will also be prohibited from engaging in similar activities during the probation period.

Co-Defendants

Jacob John Cunningham, 25, Irvine, is charged with 14 felony counts of grand theft by false pretenses and one felony count each of conspiracy to charge illegal upfront fees, conspiracy to commit forgery, and money laundering. If convicted on all counts, he faces a maximum sentence of 17 years and four months in state prison.

Justin Dennis Koelle, 22, Costa Mesa, is charged with seven felony counts of grand theft by false pretenses and one felony count each of conspiracy to charge illegal upfront fees. If convicted on all counts, he faces a maximum sentence of 10 years and eight months in state prison.

Dominic Adam Nolan, 31, Irvine, is charged with 14 felony counts of grand theft by false pretenses, and one felony count each of conspiracy to commit forgery, conspiracy to charge illegal upfront fees, and money laundering. If convicted on all counts, he faces a maximum sentence of 15 years and four months in state prison.

John D. Silva, 27, Irvine, is charged with 23 felony counts of grand theft by false pretenses, two felony counts of theft from an elder, and one felony count each of conspiracy to commit forgery, conspiracy to charge illegal upfront fees, and money laundering. If convicted on all counts, he faces a maximum sentence of 17 years and four months in state prison.

The four co-defendants are scheduled for a pre-trial hearing June 11, 2012, at 8:30 a.m. in Department C-57, Central Justice Center, Santa Ana.

Phalen was convicted of and his co-defendants are accused of the following:

Between January 2009 and March 2012, Cunningham, Koelle, Phalen, Nolan, and Silva are accused of creating numerous fraudulent loan modification businesses including CSFA Home Solutions, Mortgage Solution Specialists, Inc., CS & Associates, National Mortgage Relief Center, National Mortgage Relief Center, NMRC, NMRC Inc., N.M.R.C. Inc., Allied Home Servicing, and Allied Loan Servicing for home loan modification assistance. Cunningham, Koelle, Phalen, Nolan, and Silva are accused of sending a promotional letter to people throughout the United States with an offer to restructure their home loans, in which the defendants referred to the homeowner's specific lender and principal balance, and charging the homeowner upfront fees for loan modification services.

California Senate Bill 94, enacted into law on Oct. 11, 2009, makes it illegal in California for any person or business to demand, charge, or collect any advance or upfront fee for loan modification work or services. 

When victims called the number on the letter, the defendants are accused of falsely telling the victims that they could get a complete refund of the fee their company charged if their loan was not modified, and the company had a 95 to 100 percent success rate. After the victims gave Cunningham, Koelle, Phalen, Nolan, or Silva their money, the defendants are accused of keeping that money without securing loan modifications for the distressed victims. They are accused of not returning or refunding the victims the fee they paid for a loan modification.

In order to avoid having their theft discovered, Cunningham, Koelle, Phalen, Nolan, and Silva are accused of regularly changing the names, phone numbers, and addresses of the companies they operated.     

In late December 2011, after over a hundred victims from California and other states submitted complaints to various law enforcement agencies and the Better Business Bureau regarding the defendants' loan modification activities, Cunningham, Nolan, and Silva are accused of starting a new fraudulent scheme in which they would send out forged "Conditional Approval" letters to victims with a CitiFinancial or CitiMortgage logo in the letterhead. They are accused of stating in the forged "Conditional Approval" letters that they could offer the homeowner a low interest rate of 2.8 percent or less to refinance their home loan. Cunningham, Nolan, and Silva are accused of attaching "Escrow Instructions" with the letter, directing the homeowner to deposit between $3,500 and $4,600 directly into the defendants' bank accounts. 

Cunningham, Nolan, and Silva are accused of having no affiliation to CitiFinancial or CitiMortgage or any authorization to offer a loan on behalf of CitiFinancial or CitiMortgage. They are accused of making no efforts to qualify the victims for loans with CitiFinancial or CitiMortgage. 

In March 2012, the five defendants were arrested.

There are presently hundreds of known victims and others that are unknown both in California and out of state.  At this time, losses are estimated to be in excess of $200,000.

Deputy District Attorney Megan Wagner of the Major Fraud Unit is prosecuting this case.