Man Sentenced to 90 Months for Mortgage Rescue Scheme

A Virginia Beach man who ran was sentenced Monday to 90 months in prison, followed by three years of supervised release, for a scheme in which he collected millions of dollars in fees from clients to modify their mortgages but rarely followed through.

Howard R. Shmuckler, 68, of Virginia Beach, was ordered by U.S. District Judge Leonie M. Brinkema to serve out his seven-and-a-half-year sentence immediately after the 75-month federal sentence he received in April for a counterfeit check scheme in Washington, D.C.

"Mr. Shmuckler is a cunning criminal who took advantage of distressed homeowners in desperate need of help," said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. "Today's sentence should send a clear warning to other fraudsters of the heavy price they will pay for preying on vulnerable people looking for help to save their homes."

Shmuckler was 2011. According to FBI and U.S. Attorney's Office documents, Shmuckler ran The Shmuckler Group (TSG) largely out of an office in Vienna, claiming it was the "largest, most successful group of professionals … coming together to help home owners keep their homes in a manageable and affordable manner."

Shmuckler portrayed himself to employees and clients as an attorney licensed in Virginia, and claimed in conversations and in documents the company had a 97 percent success rate.

Shmuckler had been disbarred before making these claims, officials said.

Based on those claims, clients paid Shmuckler anywhere from $2,500 to $25,000 to modify the terms of their mortgages, Shmuckler's indictment said. 

Shmuckler instructed clients to stop making payments to their lenders, requiring them to complete several documents. One of them, called "Client Acknowledgment and Authorization," was forwarded to the client's lenders on their behalf. These forms were tracked by TSG employees in a computer database. When clients called to ask about the status of their mortgage modifications, employees called up the list and told clients steps had been taken.

From June 2008 through March 2009, TSG took in nearly $2.8 million from about 865 clients, whose mortgages were in distress and who came to Shmuckler looking for relief, the U.S. Attorney's Office said Tuesday.

Shmuckler aggressively recruited clients, but only obtained relief for about 4.5 percent of them.

Shmuckler

"The public should be wary of such individuals who offer a service or product that seems too good to be true," Assistance Director in Charge McJunkin said in a statement Tuesday. "It probably is."