Mission Viejo Man Convicted in Loan Mod Scam

Andrew Michael Phalen of Mission Viejo plead guilty to two felonies related to defrauding hundreds of homeowners.

Andrew Michael Phalen of Mission Viejo pleaded guilty Wednesday to felonies related to several loan modification scams targeting distressed homeowners, Deputy District Attorney Megan Wagner said.

Phalen, 25, pleaded guilty to two felony conspiracy charges. He had faced eight felonies, and four codefendants continue to await trial.

Under the terms of his plea deal, Phalen will likely serve one year in jail and five years in formal probation, Wagner said. She said he will not be allowed to approach homeowners with loan modification requests under the terms of his probation.

Prosecutors say Phalen and the others sent letters throughout the country to distressed homeowners promising a 100 percent success rates for loan modification assistance. The letters also claimed to offer a full refund if loan modifications were not granted.

When people sent in money, they weren't repaid or refunded, the D.A. says.

The D.A. accused the men of "regularly changing the names, phone numbers, and addresses of the companies" set up for loan modification assistance.

Wagner says the scheme targeted vulnerable homeowners.

"The folks who responded to their advertising and believed the promises that were made to them were desperate," she said. "It’s a bad economy for a lot of us, and these folks were trying hard to save their homes and get their heads above water. Under those circumstances they were particularly vulnerable."

Although Phalen could have served more jail time had he been convicted of all eight felonies, Wagner says the prosecution is satisfied with the plea agreement.

"It’s one thing to lock somebody up for awhile," she said. "But if they can come back and do what they were doing, all you’ve done is postponed the same activities from happening again. Hopefully under the terms of this agreement, Mr. Phalen will find a different way to make a living. Other homeowners won’t have to suffer from the same scheme."

Phalen's sentencing was postponed to June 6 to give victims the opportunity to speak. Sentencing is set for 8:30 a.m. in Dept. H4, Harbor Justice Center, Newport Beach.

Anon May 17, 2012 at 08:37 PM
looks like a punk
Screw the System May 27, 2012 at 04:35 AM
Just because he plead guilty doesn't actually mean he's guilty! Most of you people don't know how our so called "Justice" system works! He is a good man with a precious family out here! All he wanted to do was get out as soon as possible to be supportive of the family he has built and his beautiful new baby. He was very confident in taking his case to trial because he did nothing wrong! The truth of it all, is that him pleading guilty to two conspiracy charges gets him out faster than taking it to trial and fighting it! That is our lovely system at its finest! You all shouldn't believe everything you hear. Our government, law enforcement and judicial system are just as screwed up and criminal as the people they are arresting, prosecuting and convicting. And no, not ALL of them, but ENOUGH!!! The Secrect Service are just criminals with a badge!!! They can commit crime and prey on innocent citizens and somehow they end up the "good guys". It is disgusting and pathetic and so incrediably wrong!! unfortunately most innocent people end up taking plea bargains because it is the fastest way for them to get out of jail. I am fully convinced that none of you will ever understand out corrupt the system is until you experience it first hand.


More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »