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Virginia Man Sentenced Over Role in Mortgage Fraud

""SIGTARP"":http://www.sigtarp.gov/Pages/home.aspx announced Tuesday that a Virginia man was sentenced earlier in the week to more than seven years in prison for running a fraudulent mortgage-rescue business.

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Howard R. Shmuckler of Virginia Beach, Virginia, was sentenced to 90 months in prison followed by three years of supervised release. He was found guilty of running a mortgage-rescue business that received substantial amounts in fees but only modified clients' mortgages in a few cases.

Shmuckler pleaded guilty to six counts of wire fraud on April 10. His sentence is to be consecutive to a 75-month federal sentence he received earlier that month for a counterfeit check scheme.

According to court records, Shmuckler owned and operated a mortgage-rescue business in Vienna, Virginia, called The Shmuckler Group. From June 2008 through March 2009, his business took in nearly $2.8 million from approximately 865 clients who were looking for relief on their distressed mortgages.

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Shmuckler, a disbarred attorney, posed as a licensed lawyer and recruited new clients, telling them the business had restructured hundreds of mortgages and stopped hundreds of foreclosures. In actuality, the business only was able to obtain relief for approximately 4.5 percent of clients.

""At a time when homeowners across the nation are struggling to keep their homes, Shmuckler actively targeted the most vulnerable of them with this mortgage modification scam,"" said Christy Romero, special inspector general for SIGTARP.

""Shmuckler exploited homeowners desperately seeking support through federal housing programs such as HAMP by essentially guaranteeing the homeowners mortgage modifications in exchange for an upfront fee. Shmuckler performed little if any service in return for the fees, and in many cases, the homeowners' properties fell into foreclosure.""

Court records also showed that Shmuckler advised clients to terminate their contracts with their mortgage companies and to stop making payments to their lenders.

SIGTARP partnered with the FBI's Washington Field Office and the FDIC-OIG to investigate the case.

""Mr. Shmuckler is a cunning criminal who took advantage of distressed homeowners in desperate need of help,"" said Neil MacaBride, United States attorney for the eastern district of Virginia. ""Today's sentence should send a clear warning to other fraudsters of the heavy price they will pay for preying on vulnerable people looking for help to save their homes.""

SIGTARP reminded homeowners that they should be cautious of any guarantee of a mortgage modification, especially if the service promises the modification in exchange for an upfront fee. Advice from federally-approved housing counselors is free, as are mortgage modifications under HAMP.

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