More than two months after a Call Kurtis Investigation, U.S. Loan Auditors has filed for Chapter 7 Bankruptcy protection and says the filing should put a stay on the state’s $60 million lawsuit against them.
The doors are locked and the lights out at U.S. Loan Auditors. The once booming Rancho Cordova offices are now silent. When you call up, the voice mailbox is full. The company’s website states U.S. Loan Auditors will not re-open.
The company which advertised on TV claimed its forensic loan audits and its sister company My U.S. Legal Services could help customers with their mortgage problems. Struggling homeowners like Cheri Keen, and Tim and Jenny Lawson coughed up thousands of dollars only to end up evicted and homeless.
“I work hard for my money, and I don’t like people taking advantage of me,” Tim Lawson told us during an earlier interview.
In October, the Attorney General filed a $60 million dollar lawsuit against both companies and their owners, Shane Barker, Jeff Pulvino, and James Sandison. The state called the operation a scam. The owners of the companies now want the state’s lawsuit against them to be stopped in its tracks because both U.S. Loan Auditors and My U.S. Legal have each filed for bankruptcy protection. The Attorney General is fighting to move forward with its lawsuit anyway to get restitution for the alleged victims.
University of the Pacific McGeorge School of Law Professor John Sims says the state will most likely look to make sure the companies and owners did not hide any assets.
“There’s going to be a real aggressive effort I’m sure, they are going to track down any assets that belong to anyone involved in this,” Sims said.
Bankruptcy Attorney W. Austin Cooper represents both companies and Sandison who has also filed for personal bankruptcy protection. Cooper tells CBS13 he’s working to list the people who are owed money; –which could be as many as two thousand for My U.S. Legal and up to twelve hundred for U.S. Loan Auditors.
He says, “The best way for customers to see refunds is through the bankruptcy court where they will be treated equally and fairly.”
But Sims isn’t optimistic for those who say they were ripped off.
“The fact it’s in bankruptcy court, the victims are likely not going to get very much out of it.”
A hearing is scheduled for next week on the state’s case against the company.