Howard Shmuckler received a 90-month prison sentence with three years of supervised release for running a fraudulent loan modification/mortgage-rescue business that swindled nearly $2.8 million from 2008 to 2009 from desperate and vulnerable homeowners.
The case was investigated by several federal agencies, including the Office of the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation.
"Shmuckler exploited homeowners desperately seeking support through federal housing programs such as HAMP by essentially guaranteeing the homeowners mortgage modifications in exchange for an up-front fee,” said Special Inspector General Christy Romero. “Shmuckler performed little if any service in return for the fees, and in many cases, the homeowners' properties fell into foreclosure."
A convicted felon and a disbarred attorney, Shmuckler opened The Shmuckler Group in Vienna, Va., ostensibly to help homeowners, but it only obtained relief for about 4.5% of its clients, according to court report. The national average for loan modification is not much higher at 5%, so one must question whether the loan modification concept itself is a fraud.
Shmuckler pleaded guilty to six counts of wire fraud in April, according to SIGTARP. The court ordered that his sentence be served consecutive to a 75-month federal sentence Shmuckler received on April 5 in Washington, D.C., involving a counterfeit check scheme.