Three Folsom Attorneys Arrested In Alleged Loan Modification Scam

FOLSOM (CBS13) – Three Sacramento-area attorneys have been arrested and accused of taking thousands of dollars from struggling homeowners in a loan modification scam, according to the California attorney general.

Gregory Flahive of El Dorado Hills, 39, Cynthia Flahive of Folsom, 41, and Mike Johnson of Elk Grove, 42, were arrested Thurssday on 19 felony counts, including grand theft by false pretense, conspiracy and false advertising.

Gregory and Cynthia Flahive own Flahive Law Corporation, and Johnson is the firm's managing attorney.

Attorney General Kamala Harris says the Folsom-based law firm took $2,500 in up-front money from homeowners in Placer, Sacramento, Butte and Yuba counties for loan modification services that were never performed.

"Homeowners facing foreclosure are being targeted by predators, including those who use their law license to gain credibility and scam innocent Californians," Harris said. "My office's Mortgage Fraud Strike Force is dedicated full time to cracking down on these deceptive practices and protecting homeowners from fraud like this."

In California, it is illegal for foreclosure consultants to collect money for services before they are performed.

The investigation began last summer after a former client filed a complaint with the attorney general's office.

All three suspects were booked into the Sacramento County Jail on $50,000 bail each.