Attorney General: U.S. Loan Auditors Conducted Scam

SACRAMENTO (CBS13) --  U.S. Loan Auditors promise to save struggling homeowners from foreclosure, but the Attorney General says it was a scam.  In court of Friday, only the attorneys and angry homeowners showed up.

"This is all that's left of the house that they claimed they could save us," says Jenny Lawson.

Clutching her "Home Sweet Home" sign in court, Jenny Lawson was relieved to finally see some action taken against U.S. Loan Auditors – the company she blames for losing her home.

"They're making it a career of ripping people off.  So, it needs to stop; they need to be held accountable, and they need to be thrown in jail," says Lawson.

At this point, it's a civil matter; a $60 million lawsuit filed by the Attorney General who called the operation a scam. In court today,  the state also accused U.S. Loan Auditors and sister company 'My U.S. Legal' of filing for bankruptcy to dodge the serious allegations they face, and block their assets from being paid out as restitution to victims.

The judge sided with the Attorney General, granting a preliminary injunction and temporarily freezing the assets of company owners Shane Baker, Jeff Pulvino and James Sanison.

"They believed what they were trying to do was help people," says Greg Peterson, Attorney General for U.S. Loan Auditors.

The owners still insist they saved homes, according to their lawyer, and blame the Attorney General's investigation for interrupting their business, leaving them no choice but to file for bankruptcy.

"Do they have any success stories they can use in their defense?" asked Koula Gianulias, CBS13 reporter.

"I understand that they do, that there have been some settlements and some happy customers that are satisfied. I don't have any of that information that I can give you today though," said Peterson.

The assets are only temporarily frozen, and the judge is still making her final decision which is expected next week.