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07/19/10

Chicago Attorney Convicted of Mortgage Rescue Fraud


According to the Chicago Tribune, Norton Helton has been charged with 9 counts of bankruptcy fraud and three counts of wire fraud related to mortgage loans. A former Chicago attorney, Helton is facing a maximum of 20 years in prison for scamming homeowners seeking debt alleviation and loan modifications. Although Helton began his schemes prior to the foreclosure crisis, his actions can still serve as a warning sign to homeowners currently facing foreclosure.

A 2006 Chicago Tribune investigation uncovered how Helton scammed a 91 year old woman and her nephew into signing over the deed of their home.  After the Tribune investigation, Helton was charged by federal prosecutors for allegedly concealing home sales from the U.S. Bankruptcy Court. George Szilagy, a bankruptcy trustee, believed Helton and his partners were "taking advantage of people at their lowest point, facing foreclosure."

Like many scammers, Helton did not act alone. His partner, Charles White, owned a real estate company claiming to offer distressed homeowners "mortgage bailouts." The scheme persuaded homeowners to sell their homes to "investors," believing they would be given time to pay down debt and repaired credit through filing bankruptcy. Homeowners were also sold on the promise of potentially re-purchasing their home after a year. Helton, White and another partner made $1.6 million dollars in mortgage financing for investors using falsified information.

"The people who went through bankruptcy did so as part of a bailout program," said Assistant U.S. Attorney Joel Hammerman. Scammers like Helton and White continue to prey on distressed homeowners across the country. The Loan Modification Scam Prevention Network applauds this effort to stop scammers and will continue to support local, state and federal enforcement agencies.

For more information, please read the Chicago Tribune article "Lawyer convicted of mortgage-rescue fraud"