Four SoCal Residents Sentenced in Scheme to Defraud Clients through Debt Relief Firms

A Long Beach man was among four defendants sentenced Monday for operating fraudulent Orange County debt relief firms that pocketed money from victims through undisclosed up-front fees.

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Jeremy Nelson, 31, of Dana Point, was the scam’s ringleader and sentenced to 87 months in prison and ordered to pay over $4 million in restitution, according to the U.S. Department of Justice.

Nelson and his co-defendants portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors. Clients made monthly payments, with the expectation that the money would to go toward settlements. The defendants instead took at least 15 percent of the total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees, according to court papers.

Elias Ponce, 30, of Santa Ana, was sentenced to 42 months behind bars and ordered to pay more than $2 million in restitution. He worked in the “customer service” department and handled complaints.

Christopher Harati, 33, of Long Beach, was sentenced to 27 months in prison and ordered to pay over $400,000 in restitution. Harati worked with Ponce in customer service at the companies.

Athena Maldonado, 32, of Lake Forest, was sentenced to a month in prison and six months of home confinement. She handled complaints and held herself out as the vice president of the company’s “legal department.” Maldonado was ordered to pay $130,000 in restitution.

A fifth defendant, John Vartanian, 57, of Newport Beach, pleaded guilty to conspiracy in July for his role as a salesman at the companies. He is scheduled to be sentenced next Monday.

“Pretending to operate as a law firm, these defendants falsely promised hope to struggling debtors,” U.S. Attorney Eileen M. Decker said. “But the promises were empty as the ‘debt relief’ firm was nothing more than an advance fee scheme designed to line the pockets of the defendants.”
The four defendants previously pleaded guilty to their roles in the scheme, which ran from February 2010 to September 2012.

In September 2012, the Federal Trade Commission brought a civil case against Nelson and the companies, alleging that the defendants misrepresented debt relief services offered to consumers. The case was settled by entry of consent decree in August 2013.

City News Service contributed to this report.



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