Loan Modification Scammer Wastes No Time With Guilty Plea As Indictment Remains Pending Against Two Others

From the Office of the Nevada Attorney General:

• Doninador Palalay a.k.a. Dominador Palalay has pled guilty to Theft-Obtaining Money in Excess of $2500 by Material Misrepresentation, a category B felony, for his role in operating a foreclosure rescue scam in Las Vegas during 2008 and 2009 under the business name of PDM Financial Group, Inc.

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• On August 30, 2010, Palalay, along with co-defendants Marie Tejada Medina and Benjamin Aquino Moraleda III, were indicted by a Grand Jury for their roles in operating a foreclosure rescue scheme.(1) The Indictment alleges that Palalay and his co-defendants operated a document preparation and loan modification business that charged one percent of the victims’ loan balance(s), or between $2,600.00 to $3,700.00, for loan modification and document preparation services. They also misled customers by falsely claiming their services would prevent foreclosures on their homes and/or they would obtain loan modifications. The State alleges that the services were not performed.

• The Indictment further alleges that Palalay, Medina and Moraleda defrauded consumers by having them sign false Deeds of Trust that gave the Defendants liens on the victims’ homes based on false promissory notes that deceptively claimed loans had been made on the properties. In fact, the loans had not been made. The Indictment alleges this was done to cloud the title to the home and prevent the legitimate lenders from foreclosing on the victims’ properties.

For the Nevada AG press release, see Guilty Plea Announced In Foreclosure Rescue Scam.

(1) Reportedly, the Indictment remains pending against Medina and Moraleda for their alleged roles in the foreclosure rescue scheme; Moraleda is currently a fugitive from justice. Inasmuch as it took Palalay less than two weeks from the time of his arrest to plea guilty, one can safely proclaim him the clear winner of the "race to the prosecutor's office." Expect that he will now “belly up” and tell what he knows about his "ex-colleagues" in order to snag the best deal when sentenced. See United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) for one Federal judge's observation, made in the context of drug conspiracy cases, involving the so-called "race to the courthouse/prosecutor's office" but, in my view, is equally suited to other types of major, multi-defendant felony cases:

• In practical terms, drug conspiracy cases have become a race to the courthouse. When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed.

(A similar approach may be worth some consideration in going after and bringing down the "phony-document-manufacturing" foreclosure mills.)