HEARING SET FOR LOAN MODIFICATION BUSINESSMEN CHARGED WITH UNAUTHORIZED PRACTICE OF LAW

MEDIA CONTACT:  Diane Curtis    415-538-2028    diane.curtis@calbar.ca.gov

San Francisco, January 12, 2010 — A court hearing is scheduled Wednesday for two men whose loan modification business was shut down by the State Bar and the Orange County Superior Court because they falsely claimed the business was supervised by attorneys.

Curtis Melone and Christopher Fox, who operated under such business names as Guardian Credit Services, Green Credit Solutions, Green Credit Services, Erickson Law Group, Green Credit Law and PacWest Funding , must show why the shutdown should not be made permanent at a 1:30 hearing in Department 31 of the Orange County Superior Court on Jan. 13.

The court, which issued the shutdown order on Dec. 21, and the State Bar acted in accordance with a state law allowing takeover of businesses of nonlawyers who portray themselves as attorneys.

Fox, 35, of Redondo Beach, and Melone, 35, of Huntington Beach, promised homeowners facing foreclosure that they could help with loan modifications. Complaints to the bar and other state agencies indicated the men did nothing to help clients while also misleading the clients to believe that services would be performed or supervised by an attorney.

After working with the California Department of Justice, the California Department of Real Estate and the Orange County District Attorney's Office, State Bar investigators and prosecutors seized client files, terminated phone and computer services and posted notices to clients and the public about the shutdown.

All officers, principals and employees of the businesses were ordered to cease and desist from holding themselves out as attorneys.

Since last March, the State Bar has aggressively sought to stop loan modification fraud by lawyers and to shut down the offices of people offering foreclosure services who represent themselves as lawyers. Thirteen attorneys have resigned in the wake of investigations by the State Bar Task Force on Loan Modification and six businesses have been closed.

Section 6126.3 of the Business and Professions Code gives authority to a superior court, on its own motion or upon application of the State Bar, to assume jurisdiction of the business of a person who is not a lawyer.

Assumption of a law practice by a Superior Court is based upon the court finding that a person has engaged in the practice of law without being an active member of the State Bar or otherwise authorized to practice in California and that the interest of a client or interested person or entity will be prejudiced if the court does not assume jurisdiction.

Founded in 1927 by the legislature, the State Bar of California is an administrative arm of the California Supreme Court, serving the public and seeking to improve the justice system for more than 80 years. All lawyers practicing law in California must be members of the State Bar. By January 2010, membership reached more than 226,000.