(Phoenix, Ariz. – November 16, 2009) Attorney General Terry Goddard announced a $3 million, multi-state settlement with VONAGE, one of the nation’s largest providers of an Internet-based phone service known as “Voice over Internet Protocol.”

The settlement requires VONAGE to make significant changes to its marketing practices, to honor consumer cancellation requests and provide refunds to eligible customers.

The settlement addresses complaints of consumers who said they had difficulty or complete inability to cancel their VONAGE service. VONAGE formerly paid incentives to customer service representatives for retaining or “saving” customers in lieu of cancellation when consumers called to cancel. As a result, consumers reported that cancellation was extremely difficult and sometimes impossible. Today’s agreement puts strict limitations on this practice and requires recording and verification of these telephone calls.

The settlement also addresses a number of other marketing practices, which have led to consumer confusion over the cost of VONAGE equipment and service. Under the agreement, VONAGE will be revising its disclosures regarding the offer of “free” services, money-back guarantees and trial periods. 

Further, the settlement puts in place a broad restitution plan requiring VONAGE to make refunds to eligible consumers who filed complaints regarding unauthorized charges from January 2004 to March 16, 2010, which have not been resolved.

“We cannot allow companies to ignore their customers’ legal rights,” Goddard said. “Consumers must be treated with decency and not put off or prevented from canceling their phone service.”

Goddard was joined by 31 other state Attorneys General in this settlement.

If you believe you are eligible to receive restitution, please contact the Attorney General's Office in Phoenix at 602.542.5763, in Tucson at 520.628.6504, or outside the Phoenix and Tucson metro areas at 1.800.352.8431.  Consumers can also file complaints online by visiting the Attorney General’s Web site at www.azag.gov .  To file a complaint in person, the Attorney General’s Office has satellite offices throughout the state with volunteers available to help. Locations and hours of operation are posted on the Attorney General’s Web site.

A copy of the settlement agreement is attached. For more information, contact Steve Wilson at (602) 542-8351.

VONAGE ASSURANCE OF VOLUNTARY COMPLIANCE.pdf

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(Phoenix, Ariz. – Nov. 13, 2009) Attorney General Terry Goddard today applauded the U.S. Food and Drug Administration (FDA) for recognizing the potential harm to the public posed by alcohol energy drinks.

The agency sent a letter today to 30 beverage makers that gives them 30 days to produce evidence that the combination of alcohol and caffeine is safe.

“This is a very important step by the federal agency entrusted with ensuring the safety of these products,” Goddard said. “The FDA should move quickly to take all necessary action to protect consumers, particularly young people whom the manufacturers of these products are targeting with their marketing.”

Alcohol energy drinks are alcoholic beverages which contain caffeine and other stimulants, such as guarana.  

Earlier this year, Goddard, along with several other Attorneys General, urged the FDA to examine the safety of these products.  

In a letter submitted by the Attorneys General to the FDA, scientists and medical professionals who have conducted research in this area stated that the use of caffeine and other stimulants as additives to alcoholic beverages poses public health and safety risks.  The scientists pointed to recent studies that confirm that caffeine appears to mask, but not reduce, the intoxicating effects of alcohol.  Combining alcohol and caffeine may lead to increased risk-taking and other alcohol-related problems such as traffic accidents, violence, sexual assault and suicide.

For more information, please contact Anne Hilby at (602) 542-8019.

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(Phoenix, Ariz. - Nov. 13, 2009)  Attorney General Terry Goddard today warned consumers about a “phishing” scam purported to be from Credit Union West, a Glendale-based financial institution, requesting personal information.

Verizon, Sprint and T-Mobile customers have received text messages stating that their Credit Union West account has been suspended because of unusual activity. The text messages provide a phone number for the customers to call to get their account back in good standing. Cox Communication customers have also received voicemails with similar messages.

This is a scam! Credit Union West does not ask for confidential information through text message or email. If you have received one of these text messages, voicemails or emails, do not respond or call the number provided. Instead, notify the credit union and delete the message.

Goddard offered the following tips to avoid becoming a victim of phishing scams:
●   Be wary of text messages or phone calls that request personal information. If you do not know who is making the request, delete the message or hang up.
●   Do not give out personal information, such as your Social Security number, bank account numbers or credit card numbers, to anyone you do not know.
●   If you receive a call asking for personal information, hang up and call your financial institution to verify that the request is valid.
●   Report any suspicious calls to the Attorney General’s Office at 602.542.5763

If you believe you have been a victim of consumer fraud, please contact the Attorney General's Office in Phoenix at 602.542.5763, in Tucson at 520.628.6504, or outside the Phoenix and Tucson metro areas at 1.800.352.8431.  Consumers can also file complaints online by visiting the Attorney General’s Web site at www.azag.gov .  To file a complaint in person, the Attorney General’s Office has satellite offices throughout the state with volunteers available to help. Locations and hours of operation are posted on the Attorney General’s Web site.

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(Phoenix, Ariz. -- Nov. 12, 2009)  Attorney General Terry Goddard today invited Yavapai County homeowners to participate in a foreclosure prevention webinar on Wednesday, November 18, from 6 - 8 p.m.

The webinar is hosted by Goddard, the Arizona Foreclosure Prevention Task Force and Fannie Mae. Topics to be discussed include resources provided by the federal Making Home Affordable program, important timelines and options for those facing foreclosure, the do’s and don’ts of loan modifications and the red flags to avoid loan modification fraud.

This webinar is the latest in Goddard’s efforts to protect homeowners from loan modification fraud. “I will continue to aggressively prosecute those who attempt to defraud Arizonans struggling to stay in their homes,” Goddard said. “However, I prefer to prevent families from becoming victims in the first place. This webinar will help Yavapai County homeowners identify the steps they need to take when faced with foreclosure, so they have the best chances to stay in their homes and avoid becoming victims.”

For more information or to register for the event, go to the Arizona Foreclosure Prevention Task Force’s Website at http://www.azforeclosureprevention.org/webinar_registration.htm , and see the attached event flyer.

For homeowners who do not have Internet access but wish to participate in the webinar, the Prescott Valley Town Center and Prescott City Hall have agreed to provide free access to members of the public.  To attend the webinar from one of these locations please contact:  
o   Prescott Valley Town Center: Al Sengstock (928)759-3063 or asengstock@pvaz.net
o   Prescott City Hall: George Worley (928)777-1287 or george worley@prescott-az.gov

Additional resources for homeowners, including a Foreclosure Information Workbook, are available for free on the Attorney General’s Web site. To access this page, go to www.azag.gov and click on “Foreclosure Resource Center.”

Yavapai Webinar_Flyer_11-18-09.pdf

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(Phoenix, Ariz. - Nov. 9, 2009)  Attorney General Terry Goddard and law enforcement officials from across the state are inviting Arizona seventh and eighth graders to participate in the ARIZONA METH PROJECT’S annual “Meth NOT EVEN ONCE” poster contest to raise awareness of the dangers methamphetamine abuse.

“Our statewide efforts to cut meth use among teens have shown results, but we still have a long way to go,” said Goddard. “It is my hope that by giving youth the opportunity to reach out to one another, we can do even more to fight this devastating drug.”

Kingman Police Chief Robert DeVries said of the program, "The partnership between law enforcement and prevention efforts such as the ARIZONA METH PROJECT and community coalitions has really helped prevent first time meth use. This contest is a great opportunity for young people to join this effort."

Poster submissions must be received by 5 p.m. on Jan. 29, 2010. Contest results will be announced in February. Contest winners will receive first, second and third place prizes of $500, $350 and $100. There will also be honorable mention prizes, courtesy of local retailers. This is the first year that 7th graders will be eligible to participate in the contest.

The winning submissions will be printed on a full-sized poster and used throughout 2010 in the ARIZONA METH PROJECT’s statewide public awareness campaign.

For additional information and contest rules, go to www.azag.gov .

2010 Meth Poster Contest Info Sheet.pdf
2010 Meth Poster Contest Entry Form.pdf

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(Phoenix, Ariz. -- Nov. 9, 2009)  Attorney General Terry Goddard and Tucson Vice-Mayor Regina Romero today invited Southern Arizona residents to join them at a Tucson Senior Anti-Crime University on Friday, Nov. 20, starting at 8 a.m. The event will take place at the Pima Community College Desert Vista Campus, 5901 S. Calle Santa Cruz, in Tucson.  Goddard and Romero will be joined by other local leaders in law enforcement and issues affecting seniors.

This will be the fourth in Goddard’s statewide series of Senior Anti-Crime Universities designed to teach attendees to detect scams targeting older citizens and help them avoid many kinds of fraud. Each university will offer a half-day of classes in consumer fraud and scams, identity theft, life care planning/health care directives, Medicare/Medicaid fraud, financial exploitation, elder abuse and neglect, Internet safety and charitable giving.

"Keeping Arizona seniors well-informed provides the best defense against frauds and scams," Goddard said. "The Anti-Crime University will present a wealth of useful information to identify all manner of schemes and ripoffs. Protecting seniors has long ranked as a top priority for the Attorney General's Office, and this program moves our efforts up another notch." Learn more about the anti-crime universities from Goddard in his video message available at http://www.azag.gov/seniors/sleuths/sacu.html .  

Space is limited, so advance registration is required.  To register online or get more information, go to the SENIORS tab at the Attorney General's Web site ( www.azag.gov ) and click on ‘Senior Anti-Crime University’ or email SeniorSleuths@azag.gov.


Event Information

What:       Southern Arizona Senior Anti-Crime University
When:       Friday, November 20
Time:       8 a.m. - 12 p.m.
Goddard will speak at approximately 8:30 a.m.
Where:  Pima Community College
        Desert Vista Campus
5901 S. Calle Santa Cruz
Tucson, Ariz.
Note:       Event is open to the media.  

The Senior Anti-Crime University is part of the Attorney General’s new Senior Sleuths project. This volunteer program was created to help Arizona seniors protect themselves and prevent others from becoming victims of fraud and abuse. The Attorney General’s Office is recruiting senior volunteers and will be training them to identify and report scams and to use their knowledge to educate other seniors.

The Senior Anti-Crime University and Senior Sleuths project are partnering with AARP, DES Division of Aging & Adult Services, SMP (Senior Medicare Patrol), Arizona Area Agencies on Aging, Duet, All Arizona School Retiree Association, local police departments and other retiree and senior organizations.

Copies of the Senior Anti-Crime University flyer and registration form, along with the Senior Sleuth application form, are attached.

Arizona Senior Sleuth Application
Senior Anti-Crime University Flier
Senior Anti-Crime University Registration Form

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(Phoenix, Ariz. - November 6, 2009) Attorney General Terry Goddard will host a Crime and Fraud Prevention Forum in Bullhead City on Thursday, November 12, beginning at 6 p.m. The forum will take place in the Bullhead City Hall, 1255 Marina Blvd.

Goddard will be joined by Mojave County District 2 Supervisor Tom Sockwell, Mohave County Sheriff Tom Sheahan, Bullhead City Mayor Jack Hakim and Bullhead City Police Chief Rodney Head.

The forum, which is open to the public, is being held to increase awareness of local crime trends, discuss prevention strategies and give citizens an opportunity to voice questions and concerns. Topics will include border crime, mortgage fraud, methamphetamine abuse, consumer fraud and identity theft.

Goddard’s video message with additional information on the forum is available on the Attorney General’s Web site at http://www.azag.gov/ResourceCenter/CrimeForum/index.html. Media are invited to re-post this message on their Web sites and community calendars.

Event Information

What: Bullhead Crime and Fraud Prevention Forum
When: Thursday, November 12
6 p.m.
Where: Bullhead City Hall
1255 Marina Blvd
Bullhead City, Ariz.
Note: This event is open to the media and the public.

Bullhead City Flyer

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Preemption Letter to Congress.pdf

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(Phoenix, Ariz. – Oct. 30, 2009) Attorney General Terry Goddard today announced that Gordon W Deibler, III, 53, and Renata Majda Deibler, 36, both of Litchfield Park, have pleaded guilty in Maricopa County Superior Court to participating in a criminal syndicate by running several companies that defrauded clients of more than $1.5 million.

The Deiblers owned and operated 1031 Exchange Consultants, LLC, Etna Land Trust, Executive Realty Group, and Tax Management Consultants, LLC. Through these companies Gordon Deibler, acting as a qualified intermediary, accepted the proceeds from property sales for clients.  Deibler was supposed to use the proceeds to purchase new property, resulting in delayed tax consequences for his clients.  Instead, he diverted his clients' money for personal use. The Deiblers used the scheme on seven different occasions between 1998 and 2008.

The Deiblers also worked with their handyman, Bronislaw Galica, to purchase a home in Galica’s name in 2006.  Gordon Deibler acted as the agent for Executive Realty group and facilitated the purchase.  Renata Deibler acted as the broker for the transaction.  The Deiblers gave Galica false credit and salary information to use on the loan application. Gordon Deibler also obtained an inflated appraisal for Galica to use in obtaining the loan.  Galica bought the home and defaulted on the loan within a couple of months of the purchase.

Gordon Deibler pleaded guilty to one count of directing a criminal syndicate, a Class 2 Felony, and one count of fraudulent schemes and artifices, also a Class 2 Felony. Under the plea agreement, he must pay restitution to the victims in the amount of $1,559,644 and faces a prison term between 3 and 12.5 years.

Renata Deibler pleaded guilty to one Class 4 Felony count of assisting a criminal syndicate. She must also pay restitution to the victims.  The court has the choice of placing her on probation for up to three years or sentencing her to up to 3.75 years in prison.

Sentencing for the couple is scheduled for January 14, 2010.

The convictions are the result of an investigation by the Attorney General’s Special Investigation Unit. Assistant Attorney General Timothy Linnins prosecuted this case. For more information, contact Steve Wilson at (602) 542-8351.

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"This is very good news for all of Arizona as well as for Luke," Goddard said. "In the weeks ahead, we need to do all we can to make sure the Pentagon is fully aware of Luke's unsurpassed suitability and the state's overwhelming support for its selection." 

Luke, which has long been the world's largest training facility for F-16 pilots, was joined by Eglin Air Force Base in Florida and Holloman Air Force Base in New Mexico on the Pentagon's short list of potential secondary training bases. Eglin was previously selected as the primary base for the F-35. If it were also chosen as the secondary site, the entire training program would be located there. Some 200 Air Force sites were initially considered in the selection process.

Goddard has been among Luke's leading advocates for the F-35 assignment. In addition to meeting with senior Air Force and Defense Department officials in Washington on the matter, he filed a lawsuit last year against Maricopa County to force the county to comply with state law and protect the base from encroaching residential development. A Superior Court judge agreed with the State's position and ordered Maricopa County to stop issuing residential building permits in the high noise and accident potential zones around the base. 

Peoria Mayor Bob Barrett said of the news, "Now, more than ever, we must unite behind the base, its people and its mission.  The ‘Joint Strike Fighter’ (F-35) represents the new mission of our airmen and women at Luke.  It will replace the F-16 as the most capable combat aircraft in the history of American airpower.  You can be assured that Peoria will do everything it can to help Luke transition to this incredibly important mission, thereby ensuring the long term mission viability of Luke Air Force Base."

Goddard and Barrett will travel to Washington, D.C. again next week to meet with top Air Force officials to express their support for the selection of Luke.

The Pentagon is expected to make a formal announcement of the three finalists on Friday. The final decision is expected next spring.

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(Phoenix, Ariz. – Oct. 27, 2009) Attorney General Terry Goddard today announced that former real estate agent Ammar Dean Halloum, 46, of Phoenix, has pleaded guilty to felony charges in connection with a fraudulent real estate transaction with an elderly Tucson resident.

At a hearing before Judge Richard S. Fields in Pima County Superior Court, Halloum pleaded guilty to one count of theft/financial exploitation of a vulnerable adult and one count of fraudulent schemes and artifices, both felonies. Halloum also agreed to pay over $200,000 in restitution to the victim and over $30,000 to the Attorney General’s Office for prosecution costs.

At the hearing, Halloum admitted that while working as a licensed real estate agent, he obtained title to a Gilbert home through misrepresentations and omissions.  The homeowner he victimized was suffering from dementia and living in a nursing home at the time the sales documents were signed.  Halloum subsequently flipped the property and kept the profit.   

Halloum was indicted following an investigation by Tucson Police Detective Jim Williamson, who is assigned to the Elder Abuse Task Force of the Attorney General’s Office. The Arizona Department of Real Estate has revoked Halloum’s license.

Prosecutors handling this case include University of Arizona law students Nicholas Klingerman and Trevor Allen, and Special Assistant Attorney General Gabriel J. Chin, who is also a professor at the University of Arizona James E. Rogers College of Law.  Advanced law students are allowed to appear in court under special rules of the Arizona Supreme Court.

Halloum is scheduled to be sentenced on Dec. 1 before Judge Fields.  For more information, please contact Anne Hilby at (602) 542-8019.

Halloum photo.jpg

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Quick Action by Law Enforcement Stops Flow of Thousands of Pounds of  Marijuana into Pinal County Annually

(Phoenix, Ariz. - Oct. 26, 2009) Attorney General Terry Goddard, Pinal County Sheriff Paul Babeu and U.S. Drug Enforcement Administration (DEA) Special Agent in Charge Elizabeth W. Kempshall today announced the takedown of a violent drug trafficking organization that is believed to have smuggled thousands of pounds of marijuana across the U.S. - Mexico border and into Pinal County over the past several years.  This is believed to be the first such top-to-bottom take down of a cross-border drug trafficking organization operating out of Pinal County.

Twenty-one individuals have been indicted and numerous arrested on charges including possession and transportation of marijuana for sale, money laundering, conspiracy and illegally conducting an enterprise as a result of Operation “Los Tusa,” which concluded in recent days with numerous arrests and seizures of marijuana, cash and weapons. Among those arrested was the alleged leader of the organization, Robert Hernandez, 38, of Arizona City.

"Coordinated law enforcement that attacks organized crime from the top down is the key to securing our border and keeping Arizona safe from smuggling violence," Goddard said. "I am committed to working with our law enforcement partners to fight back against the cartels and the violence they perpetrate in our communities."

Operation Los Tusa began in December of 2008 when a routine traffic stop by a Pinal County Sheriff’s Deputy in the Maricopa/Stanfield area led to a search of the car and the seizure of $228,569 in cash.

Subsequent investigation by the Pinal County Narcotics Task Force and DEA revealed what investigators allege was an elaborate drug smuggling organization that brought marijuana across the U.S. - Mexico border, through the Tohono O'Odham Nation and into Pinal County.

Investigators believe the organization had been operating in Pinal County for at least three years, smuggling thousands of pounds of marijuana per year. They further alleged that the drugs were distributed from Pinal County stash houses to cities across the nation.

The organization allegedly smuggled the marijuana across the Arizona desert from the border to southern Pinal County using a network of vehicles and individual walkers who carried backpacks filled with 50 - 100 pounds of marijuana each. The walkers were allegedly met by drivers in southern Pinal County who transported the drugs to stash houses throughout the county for subsequent sale and distribution.

Several of the lead defendants were charged with use of minors to commit drug offenses, for allegedly recruiting Pinal County residents as young as high school students to meet the walkers and drive the marijuana to stash houses.  

In addition, several lead defendants face charges of conspiracy to commit armed robbery relating to their alleged scheme to impersonate law enforcement officers in order to rob and possibly murder competing drug traffickers in the southern Arizona desert.  Among the items seized in the takedown of the organization was a sedan that appears to have been altered to look like a police vehicle and contained a hat with “FBI” written on the front.

“Drugs and violence go hand in hand.  This deadly combination must be met with combined law enforcement expertise at the local, state and federal levels,” said DEA Special Agent in Charge Elizabeth W. Kempshall.  “Today’s operation is a major strike against a violent drug trafficking organization responsible for smuggling multi-hundred pound shipments of marijuana from Mexico into Southern Arizona.  DEA shares with its law enforcement partners the goal of completely destroying this organization and any others like it that plague our streets and communities and putting them where they belong-behind bars.”

Goddard, Babeu, and Kempshall all noted that the success in Operation Los Tusa was the result of the rapid and coordinated responses of the Pinal County Narcotics Task Force, Pinal County Sheriff’s Office, DEA and the Arizona Attorney General’s Office.

"Pinal County has always been a haven for drug and human smuggling.  This historic take down of criminal traffickers should serve as a signal of what our citizens and criminals can expect to continue to take place,” said Sheriff Paul Babeu. “This investigation was fully developed by local law enforcement and due to the size and scope of this criminal organization; we sought the assistance of the DEA and the Attorney General’s Office.  We are also appreciative of the assistance of the Mesa, Tempe and DPS SWAT teams who joined our PCSO multi-agency SWAT team during the execution of the high risk search warrants."  

Babeu continued by stating, "I thank all our law enforcement partners for their amazing support and ask them to standby for further operations.  Together, we made sure the good guys won a big victory against those who break our laws and corrupt our society with drugs. We shall continue to attack criminal operations and take not only their drugs - but their cash, their vehicles, their houses and send them to prison."   

To date, Operation Los Tusa has resulted in the seizure of $418,640 in U.S. currency, nearly 4,000 pounds of marijuana, 21 vehicles and several assault rifles. It has also led to the identification and closure of multiple stash houses in Pinal County.

For more information contact:   

●   Lt. Tamatha Villar, Pinal County Sheriff’s Office, 520.705.4245,
tamatha.villar@pinalcountyaz.gov
●   Ramona Sanchez, DEA, 602.664.5725, ramona.f.sanchez@usdoj.gov
●   Anne Hilby, Arizona Attorney General’s Office 602.542.8019, anne.hilby@azag.gov

Roberto Hernandez. age38. of ArizonaCity.jpg
Los Tusa Photo 1.jpg
Los Tusa Photo 2.jpg
Los Tusa Press Conf 1.jpg
Los Tusa Press Conf 2.jpg

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(Phoenix, Ariz. – Oct. 20, 2009) Attorney General Terry Goddard today announced that Robert Stuart Reed, 55, of Phoenix, has been sentenced to 10.5 years in prison followed by three years probation for setting fire to his rented Phoenix townhouse and endangering the lives of a dozen other residents of the building, including six children.  

According to court documents, in the early morning of April 28, 2007, Reed set fire to the Phoenix townhouse he was renting. By doing so, he risked the lives of 12 sleeping residents of two town homes attached to Reed’s residence. Following the incident, Reed submitted a fraudulent insurance claim to his homeowner’s insurance provider, Travelers Insurance Company, claiming the fire was accidental.

In June 2008, Reed was charged with one count of committing arson of an occupied structure, a class 2 felony, one count of submitting a fraudulent insurance claim, a class 5 felony, and 12 counts of endangerment, a class 6 felony.

Reed failed to appear for his scheduled trial date in January 2009 and was subsequently tried in absentia.  On January 20, a jury convicted Reed of all 14 felony counts and the court issued a warrant for his arrest.  

Reed was arrested by Yavapai County Sheriffs deputies on August 15, 2009.  At the time of his arrest, he was using the assumed name Charles Olson. He was also in possession of a red 1997 Nissan Pathfinder belonging to Kristal Forest, a 64-year-old resident of Camp Verde who has been missing since March 29, 2009, when she was last seen with Reed.  The Yavapai County Sheriff’s Office is investigating Ms. Forest’s disappearance. No charges have been filed.

This case was brought to law enforcement’s attention by Traveler’s Insurance Company. It was investigated by the Arizona Department of Insurance Fraud Unit and the Phoenix Fire Department as well as fire investigators with J. Perkins and Associates, Inc.  Assistant Attorney General Beverly Rudnick prosecuted this case.

For additional information, contact Anne Hilby at (602) 542-8019.

Reed Sentencing release photo

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(Phoenix, Ariz. - October 19, 2009) Attorney General Terry Goddard will host a Crime and Fraud Prevention Forum in Nogales on Thursday, October 29, beginning at 6:30 p.m. The forum will take place in the Nogales High School Cafeteria, 1905 N. Apache Blvd.

Goddard will be joined by local elected and law enforcement officials, including Santa Cruz County Attorney George Silvia, Santa Cruz County Sheriff Tony Estrada, Nogales Mayor Octavio Garcia-Von Borstel and Nogales Police Chief William Ybarra.

The forum, which is open to the public, is being held to increase awareness of local crime trends, discuss prevention strategies and give citizens an opportunity to voice questions and concerns.  Topics will include border crime, mortgage fraud, methamphetamine abuse, consumer fraud and identity theft.

Goddard’s video message with additional information on the forum is available on the Attorney General’s Web site at http://www.azag.gov/ResourceCenter/CrimeForum/index.html . Media are invited to re-post this message on their Web sites and community calendars.

Event Information

What:       Nogales Crime and Fraud Prevention Forum
When:       Thursday, October 29
6:30 p.m. (doors open at 6 p.m.)
Where:  Nogales High School Cafeteria
1905 N. Apache Blvd.
Nogales, Ariz.
Note:       This event is open to the media and the public.

CF_NogalesFlyer_10-29-09.pdf

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(Tucson, Ariz. – Oct. 14, 2009) Attorney General Terry Goddard today voiced strong support for President Obama’s proposal to consolidate existing federal consumer protection authorities into one federal agency. The proposed Consumer Financial Protection Agency would oversee the entire consumer financial market, strengthen federal consumer protections for families and individual investors and enforce the rules consistently.

Goddard expressed his support for the proposal at a news conference today in Tucson. He was joined by Pima County Board of Supervisors Chairman Richard Elias, Primavera Foundation Board Treasurer Rebecca McReynolds and Southwest Center for Economic Integrity Deputy Director Kelly Griffith. The Pima Council on Aging has also expressed support for the proposal.

“Abusive lending practices and regulatory loopholes are at the heart of the mortgage crisis that has devastated Arizona families and our State’s economy,” Goddard said. “I am aggressively prosecuting those who defraud Arizonans, but state action alone is not enough. Federal policy makers must reform the system to be more efficient and operate in the best interests of consumers.”

The U.S. House of Representatives Committee on Financial Services is meeting today to discuss H.R. 3126, the Consumer Financial Protection Agency Act of 2009.  The proposed agency would ensure consumers are provided information that is simple, transparent and accurate and would:
●   Create a single agency with the authority and mission to streamline and simplify mortgage disclosures so that families can understand them.
●   Enforce the new Credit Card Bill of Rights and keep disclosure requirements up to date if credit card companies try to work around them.
●   Raise the standards for brokers and investment professionals so that they have a fiduciary duty to act in the interests of investors when giving advice.
●   Require mutual funds to disclose costs and risk factors to investors prior to selling a product, instead of after it is purchased.
●   Increase protections for those who uncover and report financial frauds.

Goddard, Elias and Southern Arizona community leaders discussed how the current system of regulation failed to protect responsible consumers in recent years. Competition from unregulated players led regulators to permit inappropriate mortgages and abusive credit cards.  Federal regulators let this happen because their primary mission is to ask, “What’s the effect on the financial firm?” instead of “What’s the effect on consumers?”

In addition, Goddard noted how today’s complex patchwork of regulations has put locally owned Arizona banks at a disadvantage. Community banks must compete against mortgage brokers and mortgage finance companies, which, unlike banks, are not subject to federal oversight.  

In recent years, non-bank firms won market share by lowering lending standards and offering irresponsible – and often deceptive – loans.  The Consumer Financial Protection Agency would put an end to community banks’ competitive disadvantage by extending the reach of federal oversight to all financial firms, banks and non-banks alike.    

For more information, please contact Anne Hilby at (602) 542-8019.

10.14 Goddard photo.jpg
10.14. Goddard photo 2.jpg

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TCI Complaint
TCI Consent Judgment

Hope for Homeowners Now, LLC.

In July, Goddard filed a lawsuit alleging that Hope for Homeowners Now, LLC, a Glendale-based company, misled homeowners looking for help in modifying their mortgage.

In the suit, Goddard alleged that between December 2008 and July 2009, Matthew Castaneda, of Glendale, and Michael Winding, of Phoenix, through their limited liability company Hope for Homeowners Now, LLC, victimized homeowners facing imminent foreclosure with fraudulent claims of high success rates modifying mortgage loans.

Hope for Homeowners Now advertised loan modification services for an upfront fee of $3,195. According to court documents, the company solicited their modification services with claims including: “Over 80% of our customers have tried to deal with their lending institutions on their own and failed,” and “Loan modifications have a very small success rate if you try to do it with a non-profit organization or yourself.”

Based on the Attorney General’s investigation, Goddard alleged that Hope for violated numerous state laws by:

●   Deceptively implying it was more successful at obtaining mortgage loan modifications than consumers who try to obtain modifications on their own or with the assistance of non-profit organizations. In fact, the company’s success rate was no better than that of it clients who tried to obtain loan modifications on their own.  
●   Misrepresenting that the company was comprised of real estate and financial professionals, as well as “professional mitigation attorneys,” and that attorneys negotiate on behalf of Hope for Homeowners’ clients.  
●   Charging consumers an upfront fee prior to the full performance of services and without first having obtained a surety bond.  
●   Failing to provide its loan modification clients with the necessary substantive disclosures required by the Arizona Credit Services Act.  

Despite being served with the lawsuit and notice of a court hearing regarding the State’s claims, the defendants did not appear in court or otherwise respond to the allegations against them. As a result of their failure to respond, Maricopa County Superior Court Commissioner Jay Davis issued a default judgment in favor of the State.

According to the court judgment, the defendants must:
●   Pay $424,935 in restitution to consumers.
●   Pay $155,000 in civil penalties to the State of Arizona.
●   Permanently refrain from providing loan modification or origination services in Arizona or on behalf of an Arizona consumer.

This case was handled by Assistant Attorney General Cherie Howe. Copies of the complaint and default judgment are attached.

Hope for Homeowners Now Complaint
Hope for Homeowners Now default judgment

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(Phoenix, Ariz. – Oct. 9, 2009) Attorney General Terry Goddard today announced that he is taking action to support local control by defending the U.S. Environmental Protection Agency’s (EPA) decision to grant states the right to regulate global warming pollution from automobiles.  Goddard, along with a coalition of 17 other state Attorneys General, this week filed a motion to intervene a lawsuit brought by the National Automobile Dealers Association (NADA) and the U.S. Chamber of Commerce that seeks to deny individual states the ability to limit greenhouse gas emissions from cars.

On June 13, 2009, the EPA granted a Clean Air Act waiver to California, allowing it – and other states such as Arizona – to implement global warming pollution emission standards for cars.  On September 8, NADA and the U.S. Chamber of Commerce brought a lawsuit that challenges this waiver from the EPA.  

The federal Clean Air Act (CAA) grants California – exclusively among all states – the power to enact its own air pollution standards for cars.  The CAA also allows other states to adopt California’s standards, but those standards can only take effect if the EPA grants a waiver exempting California from federal regulation.  The California standards, adopted in September 2004, would reduce emissions of greenhouse gases from cars by 30% by 2016.  Arizona adopted California’s standards in April 2008, and at least 17 other states have now either adopted or plan to adopt the California standards.

The coalition is moving to intervene on the EPA’s behalf in a challenge to the EPA waiver decision that was filed in the United States Court of Appeals for the District of Columbia on September 8, 2009.  The states or state agencies in the coalition are: Arizona, Connecticut, Delaware, Florida Department of Environmental Protection, Illinois, Iowa, Maine, Maryland, Minnesota, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania Department of Environmental Protection, Rhode Island, Vermont and Washington.  The State of California has also moved to intervene on the EPA’s side.

For more information, contact Anne Hilby at (602) 542-8019.

EPA Intervention Motion

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(Phoenix, Ariz. – October 9, 2009) Attorney General Terry Goddard today announced that Roberto Rodriguez, 35, of Las Vegas, was charged yesterday in Maricopa County Superior Court with possession of chemicals and/or equipment to manufacture methamphetamine, a class 2 felony.

On Tuesday night, Rodriguez was driving northbound on Loop 303 when he was pulled over by an Arizona Department of Public Safety (DPS) officer in a routine traffic stop.  

According to investigators, a consented search of the vehicle revealed that Rodriguez was transporting approximately 660 boxes of pseudoephedrine, the key ingredient for methamphetamine production, in his car.  

Investigators also reported that Rodriguez admitted he purchased the drugs at various stores and intended to sell them to other individuals for $10,000.  Furthermore, according to investigators, Rodriguez understood that the pseudoephedrine would be used by purchasers to produce other drugs.

Assistant Attorney General Patrick Zinicola is prosecuting this case. A copy of the complaint and a photograph of Rodriguez are attached. For more information, contact Anne Hilby at (602) 542-8019.

Rodriguez Photo
Rodriguez Direct Complaint

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