Schuette: Sylvan Lake lawyer scammed more than 100 of homeowners
A Sylvan Lake attorney is facing up to 20 years in prison after being charged with 30 felonies, including racketeering, in an alleged home mortgage scam that raked in hundreds of thousands of dollars and victimized three banks and 143 separate homeowners.
Michigan Attorney General Bill Schuette and his Homeowner Protection Unit filed charges last week against Steven Barry Ruza, and his company, Home Legal Group PLLC, in West Bloomfield Township’s 48th District Court before Magistrate Nelson Klein.
The charges included:
■Twenty-six counts of obtaining money through false pretenses (making false statements to consumers), a felony punishable by up to five years in prison and/or a $10,000 fine
■Two counts of attempted false pretenses over $20,000 but less than $50,000, a felony punishable by five years’ imprisonment
■One count of attempted false pretenses of $1,000 or more but less than $20,000, punishable by up to five years in prison
■One count of racketeering, a felony punishable by 20 years in prison and/or a $100,000 fine. The racketeering count includes an additional 114 victims Schuette alleges were defrauded.
“We’ve been investigating Ruza for more than a year,” said Andrea Bitely, communications director for the attorney general’s office.
“Several victims contacted our office and lodged complaints about how they had lost their home even though they allegedly paid Ruza to help them save it.”
According to the attorney general’s complaint, Ruza and Home Legal Group promised victims they could obtain mortgage modifications and save their homes from foreclosure.
But the company allegedly did nothing, or very little, to obtain mortgage modifications for the victims. The victims never received modifications through Ruza and Home Legal Group, and most lost their homes to foreclosure.
Bitely said the state’s investigators hadn’t found one person who had a home saved from foreclosure with Ruza.
According to the criminal complaint, in cases where a loan modification was obtained, Ruza either failed to pass on paperwork from the lenders to homeowners, or the modification was so much worse than what he had promised that the homeowners still lost the property.
The fees Ruza charged ranged from as little as $300 to $3,600, Bitely said, and averaged $1,600 for all victims.
Calls Tuesday to Ruza’s office and a second number went to a full message box.
In 1994, Ruza was put on probation for 13 months by the Attorney Discipline Board of the state Supreme Court after being convicted of “two alcohol-related driving offenses,” as well as driving on a suspended license and failing to appear in court and at probation appointments.
The number of cases Ruza was handling would make it difficult to do a thorough job, said Jason Jenkinson, a foreclosure defense attorney based in Traverse City.
In most cases he’s heard of, Jenkinson said, the loan modification scams have been run by con artists who were not lawyers.
“This would be the first attorney I know of who was engaging in this kind of activity,” Jenkinson said. “You don’t take on the number of cases that this gentleman was accepting. There’s no way you could be filing lawsuits and giving the clients the attention you need to give them, in terms of litigating with a bank under those circumstances.”
The complaint was filed in 48th District Court in Oakland County. Ruza’s bond was set at $1 million cash/surety plus $500,000 cash/surety for Home Legal Group. Ruza’s next court appearances before Judge Marc Barron include a conference on June 4 and a preliminary exam set for June 11.
The attorney general’s investigation is continuing, and anyone who feels they’ve been victimized by Ruza or Home Legal Group can file a complaint online at www.michigan.gov/ag or call the consumer complaint line at (517) 373-1140.
In addition, victims can apply to the $7.5 million Foreclosure Rescue Scam Victim Restitution fund, which is intended to provide restitution payments for victims of foreclosure scams. To date, more than $2.2 million has been paid to Michigan victims of mortgage-related crimes.
Many times, Jenkinson said, the foreclosure clients he represents already have fallen victim to a fake loan modification scam.
“I doesn’t seem like anybody ever gets caught on these,” the foreclosure attorney said. “A lot of the cases that I did were people who were scammed first.”