A key figure in a defunct loan modification company was arrested Tuesday in the largest fraud investigation undertaken by Nassau County police -- up to $18 million cheated from as many as 6,000 homeowners in at least seven states, authorities said.
Meredith Dulberg, 36, of Farmingdale, was charged with practicing as an attorney without a license while working at The Tempelton Group in Westbury, which shut down last October after illegally charging homeowners upfront fees and doing little to nothing to save their homes, authorities said. She also faces two felony counts of first-degree offering a false instrument for appearing in Nassau County small claims court as the company's attorney, police said.
"Her employment there allowed the call center over the phone to say, 'We have an in-house attorney and our lawyer is going to represent you,' " said Det. Ron Rispoli of the crimes against property squad, which is leading federal, state and local agencies in the investigation.
Dulberg, of 27 Conklin St., was released on her own recognizance after being arraigned Tuesday afternoon in First District Court in Hempstead.
"I am confident that when all the facts and evidence come to light, Meredith Dulberg will be vindicated," said her attorney, Joe Girardi of North Valley Stream.
The arrest is the first expected in an ongoing probe into a business that operated under one name until its reputation prompted it to reopen under a new name, sometimes in a new location, police said.
The core crew of about 30 people, led by founder William Wanek until his death in June, were known as All Island Capital, in Baldwin in 2010, then Claremont Funding, in Baldwin in 2011, before being resurrected as Tempelton in 2012, police said. At least two of its employees had been barred by a State Supreme Court judge in Nassau from working or being associated with any loan modification company, part of another suit against another loan modification business, police said.
Tempelton cashed in on borrowers' distress by charging an average of $3,000 for its services and lured clients with an advertising campaign that cost up to $60,000 a month, mostly radio commercials, Rispoli said.
Under state law, "distressed property consultants" are barred from charging upfront fees. Attorneys who offer loan modification services as part of their law practice may charge fees up front, a retainer that they would normally charge for legal services.
Even when Tempelton was preparing as early as August to close shop, it continued to rake in upfront fees, Rispoli said.
"They took people who were down and out and struggling . . . and they hurt them even more," he said. "They pushed a lot of them into foreclosure."
Company officials would cash homeowners' checks at check-cashing businesses, and the money would be split between Wanek and the sales team that got the client, police said.
With those fees, the company was supposed to negotiate with lenders to make monthly payments more manageable through lower interest rates, extended payment periods or reduced principals, police said.
But almost no work was done for homeowners, police said. A software program used by Tempelton showed only 118 borrowers, out of 2,000 clients listed, qualified for loan modifications, police said, and most of those qualified homeowners got modifications through their own negotiations with lenders.
Tempelton employees would eventually refuse to return homeowners' calls or fob them off with excuses for not calling back, Rispoli said. Some employees said they were sick or had been hospitalized, he said: "We had one woman who was dying every other day."
Auto mechanic Thomas Garrett said his Lindenhurst bungalow was wrecked by superstorm Sandy, and he was lying on a moldy mattress, his home bare, when he heard a Tempelton radio infomercial at 6 a.m. one spring day last year.
Hoping to lower his $2,200 monthly mortgage bill so he could accrue funds to repair his home, Garrett called before the commercial was even over, and got a live person.
Within days, a Tempelton representative came to his house, shaking his head at the storm damage, promising him a 2 percent rate for the first three years and no more than 3 percent afterward, a $150,000 reduction in his $267,000 mortgage and more -- or money back guaranteed, Garrett recounted.
The company cashed his check for $3,000, but six months later, no one from Tempelton was returning his calls, said Garrett, who began leaving the representative messages once or twice a day just to hassle him because he felt that was his only recourse.
"This guy took me for three grand," he said. "He sees I have nothing. He just takes the check and he just goes to the next person."
So many homeowners complained to Suffolk and Nassau police that detectives from both counties teamed up about a year ago to look into the company and were joined by the FBI, the state attorney general's office, the Nassau district attorney and other agencies.
The Nassau prosecutor on the case, Victoria Curran, said Tempelton and its predecessors never hired a real attorney, except for a brief period.
"I think that person lasted a week," she said. "For the most, the people that represented themselves as attorneys were not attorneys."
The investigation took an unexpected turn Oct. 10 when a Fox News investigative reporter and a homeowner arrived at Tempelton's Westbury office, police said. All the employees ran out the door and someone slashed the tires on the reporter's vehicle, so police were called, detectives said.
With all the workers gone, officers had to secure the premises, where paperwork on homeowners' cases were piled as high as four feet on desks, Rispoli said. In the last weeks of the company, workers were faxing reams of clients' documents to lenders, as proof they tried to help, thinking this would protect them from criminal charges, said detectives, who have interviewed former employees.
Police loaded all the files and file cabinets into a box truck and have been going through 3,000 homeowner cases so far, document by document, investigators said.
That was on Oct. 11, police said. Three days later, the company had reopened under a different name in a new office, police said.
In many files, Rispoli said, they found cutout slips of paper with homeowners' signatures, which they would copy onto documents, such as hardship letters to lenders. In others, they found scripts of pitches made to potential clients, police said.
Late last year, when Nassau police posted a request on online complaint boards for victims to come forward, so many came in person to file complaints that detectives stopped at about 400 homeowners so they could digest what they had.
James DeCesare, 64, said he was on time with payments on his Bay Shore home two years ago when he paid $2,995 to All Island Capital to try to refinance his mortgage to lower his rate from almost 4.9 percent to 2 percent.
"We do the dirty work," DeCesare recalled the loan modification agent saying. "We sit on them until they give you what you want, that's why you pay us."
However, the promised refinancing never happened, he said, and the company stopped answering phone calls and emails.
"I want my $3,000," DeCesare said, "and if I can't get that, at least I want the satisfaction of this guy getting indicted."
It was just last Friday when Marie Thompson of Roosevelt went to Rispoli's office to file a complaint, angry because her Tempelton contact had called that day, telling her that the company had folded and he was with a new company that could help on the mortgage -- for another fee.
"If I saw him right now, I'd spit on him," she said.
Her mother, who had early dementia and was dying of cancer, had missed several payments in 2012 when a Tempelton agent visited, eventually taking $7,000 in fees, said Thompson, 53.
But Thompson said she doesn't blame Tempelton. She questions why the government didn't notice the company several thousand homeowners ago.
She and her brother now owe almost $250,000 in payments and late fees on a house that's worth about $180,000. But it's the house where she and her family lives, where she grew up, a house that her parents had built.
"I want to sit down and kneel before you and tell you how much help I need," said Thompson, crying. "I can't tell you how hurtful this is. I don't know who to turn to anymore."
With Maura McDermott