Christopher Fox, 37, of Laguna Niguel and Curtis Melone (AKA Curtis Kubat), 37, of Huntington Beach were arrested Tuesday on 37 felony counts, including conspiracy, grand theft and unlawful collection of advance fees.
They are being held at the Orange County Jail on $500,000 bail and will be arraigned today in Orange County Superior Court, Harris’ office reported.
Fox and Melone - along with King Harris III, 42, of St. Louis, Missouri - allegedly collected more than $6 million in up-front fees through Orange County- based Green Credit Solutions.
The Attorney General's Office will seek extradition of King Harris, who currently faces federal mail and wire fraud charges in Missouri.
"Homeowners continue to struggle throughout California and across the country to hang onto their homes, and this prosecution is another warning to predators who would seek to profit from their distress: this kind of criminal conduct will meet with swift and certain consequences," Attorney General Harris said.
She advised that homeowners should never pay up-front fees to reduce their loans.
"Californians who face mortgage difficulties should instead contact a nonprofit housing counselor, either through www.HUD.gov or a local nonprofit housing clinic, to learn about the mortgage process and their rights as homeowners," she added.
In June 2009, the Attorney General's Office launched an investigation of Orange County- based Green Credit Solutions - later renamed Guardian Credit Services and Get My Credit Grade - in response to numerous consumer complaints filed with the office, as well as with the Better Business Bureau, the California Department of Real Estate and the State Bar of California.
Through witness interviews, analysis of the company's marketing materials, and its business and financial records, Department of Justice investigators uncovered a scheme in which thousands of victims paid $3,500 for what they believed were attorney-backed loan modification services to reduce their interest rates, monthly payments or principal balance.
From November 2008 to October 2009, Fox, Melone and King Harris collected more than $6 million from thousands of homeowners across California and nationwide.
Victims were told their funds would be held in a so-called "attorney escrow account" until services were completed. In fact, those fees were often deposited into the account of a disbarred attorney and then promptly transferred to GCS.
Likewise, the company fraudulently claimed that loan modification services would be performed by attorneys; King Harris is a disbarred Tennessee attorney and marketing materials referred to his alleged partners at the defunct law firm of "Smith Harris PLLC."
In May, Attorney General Harris formed a Mortgage Fraud Strike Force to investigate and prosecute mortgage fraud. In August, the Strike Force filed its first suit against a law firm that took millions from desperate homeowners.
In California, foreclosure consultants are prohibited by law from collecting money before services are performed.
For more tips on how to avoid mortgage fraud and other resources, and to report fraud or file a complaint, visit .
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120711 Green Credit Solutions case
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