Law Office of Camron Hoorfar, PC

A Rhode Island man was sentenced to almost seven years in prison for fraudulently seeking more than $4.7 million in forgivable federal loans meant for businesses struggling during the coronavirus pandemic while he was still on probation from a previous conviction, federal prosecutors said. Michael Moller filed 11 fraudulent applications for Paycheck Protection Program loans. He used his own name, as well as the names of his father, his girlfriend’s brother, and his girlfriend’s son to apply for the loans to pay employees at businesses that did not exist. He actually received almost $600,000, some of which he used for a trip to Las Vegas, home renovations, and a car, prosecutors said. He was sentenced in U.S. District Court in Providence to five years and 10 months for the loan scam, and another year for violating the terms of his release on a federal bank robbery conviction. He was also ordered to pay full restitution. Moller also has multiple convictions in state and federal courts for larceny and tax fraud, authorities said.

An emergency relief program hastily rolled out in the early days of the pandemic had such poor fraud protections that it improperly doled out nearly $4.5 billion to self-employed people who said they had additional workers — even those who made wildly implausible claims, like having 1 million employees. The $20 billion program, called the Economic Injury Disaster Loan Advance, offered small businesses immediate grants of up to $10,000 in the months after the pandemic shuttered much of the economy. But hundreds of thousands of the grants it made were inflated because there was no system to catch applications with “flawed or illogical information,” Hannibal Ware, the Small Business Administration’s inspector general, wrote in a report. The report, which described how the agency could have spotted obviously bogus applications by taking even rudimentary steps to prevent fraud, was the latest black eye for the SBA, a small department that was thrust to the front lines of the government’s pandemic response.

The agency also ran the Paycheck Protection Program, which gave out $800 billion in bank-issued loans but often left lenders and borrowers scrambling to comply with confusing and shifting rules. Fraud was a problem there, too: Tens of billions of dollars may have been taken improperly. The loan-advance grants were created by Congress in March 2020 as part of its first coronavirus aid package. Intended to quickly get money to devastated companies, the program offered grants to businesses that applied for a disaster loan — and allowed applicants to keep the money even if their loan request was rejected. In the 14 weeks the program operated before it ran out of money, nearly 5.8 million applicants received grants based on their company’s head count: $1,000 each for up to 10 workers. Sole proprietors and independent contractors who employed only themselves should have collected a maximum grant of $1,000 — but many collected bigger checks.

If you’re struggling financially as a result of the COVID-19 pandemic, we can help. Call us at 816-524-4949 or visit our website for a consultation to determine your best option.

Wells Fargo & Co. will pay $37.3 million to settle U.S. government claims it fraudulently overcharged commercial clients on foreign exchange services, the latest in a string of scandals over the bank’s treatment of customers. Yesterday’s settlement resolves U.S. Department of Justice civil fraud charges against the fourth-largest U.S. bank, and includes a $35.3 million fine plus a $2 million forfeiture. Wells Fargo previously returned $35.3 million to customers as restitution, making its total payout about $72.7 million. The Justice Department said that sales specialists jokingly used expressions such as “back the truck up” and “when in doubt, spread them out” when they were overcharging customers, with one referring to the sales group as a “bucket shop.” Wells Fargo declined to comment, pending required approval of the settlement by U.S. District Judge John Koeltl in Manhattan federal court. The San Francisco-based bank has been subject since 2018 to a Federal Reserve cap on assets, which must remain below $1.95 trillion until it improves its governance and risk controls. Wells Fargo has already paid more than $5 billion in fines since the scandals began in 2016.

Struggling financially? Call us at 816-524-4949 or visit our website to schedule a consultation.

The Consumer Financial Protection Bureau (CFPB) filed a complaint and proposed consent order alleging that American Advisors Group (AAG) used inflated and deceptive home estimates to lure consumers into taking out reverse mortgages, according to a CFPB press release. The CFPB also alleges that AAG’s deceptive conduct violated a 2016 administrative consent order that addressed AAG’s deceptive advertising of reverse mortgages. If entered by the court, the proposed consent order would prohibit AAG from future unlawful conduct and require AAG to pay $173,400 in consumer redress and a $1.1 million civil money penalty. American Advisors Group, based in Irvine, Calif., is one of the nation’s leading providers of reverse mortgages. A reverse mortgage is a special type of home loan that allows homeowners who are 62 or older to access the equity they have built up in their homes and defer payment of the loan until they pass away, sell, or move out. The loan proceeds are generally provided to the borrowers as lump-sum payments, monthly payments, or as lines of credit. Homeowners remain responsible for paying taxes, insurance, and home maintenance, among other obligations.

Struggling to pay bills? Give us a call at 816-524-4949 or visit our website to schedule a consultation with an attorney to determine your best option.

A second major federal student loan servicer is calling it quits, a decision that will force the Education Department to transfer the accounts of millions of borrowers just as the government begins to resume collecting payments early next year. Navient said yesterday that it wanted to end its contract with the federal government and offload its responsibilities to Maximus, another federal loan servicer. Navient services the accounts of around 6 million borrowers. Jack Remondi, Navient’s chief executive, said the company wanted to “provide a smooth transition to borrowers” as it shifted its focus to businesses other than federal student loan servicing.

Two months ago, another large federal servicer, FedLoan, said it too wanted out. The departures will leave the Education Department scrambling to move more than 15 million borrowers to new servicers — a process that has in the past been chaotic and error-prone. Nearly all federal student loan borrowers have been skipping their payments thanks to a moratorium on collections that the government imposed in March 2020 in response to the coronavirus pandemic. But those bills are about to return: The Biden administration has said it intends to restart collections on Jan. 31. Navient won’t be entirely done with the federal student loan business if its request succeeds, however: The company is the subject of a lawsuit brought by the Consumer Financial Protection Bureau in 2017 over what the federal agency said was a pattern of misdeeds and mistakes that hindered borrowers trying to repay their loans.

Struggling with debt? Call our office at 816-524-4949 or visit our website to schedule a consultation.

The Social Security numbers of school teachers, administrators and counselors across Missouri were vulnerable to public exposure due to flaws on a website maintained by the state’s Department of Elementary and Secondary Education.

The Post-Dispatch discovered the vulnerability in a web application that allowed the public to search teacher certifications and credentials. The department removed the affected pages from its website Tuesday after being notified of the problem by the Post-Dispatch.

Based on state pay records and other data, more than 100,000 Social Security numbers were vulnerable.

The newspaper delayed publishing this report to give the department time to take steps to protect teachers’ private information, and to allow the state to ensure no other agencies’ web applications contained similar vulnerabilities.

It wasn’t immediately clear how long the Social Security numbers and other sensitive information had been vulnerable on the DESE website, nor was it known if anyone had exploited the flaw.

Though no private information was clearly visible nor searchable on any of the web pages, the newspaper found that teachers’ Social Security numbers were contained in the HTML source code of the pages involved.

The 2015 audit found that DESE was unnecessarily storing students’ Social Security numbers and other personally identifiable information in its Missouri Student Information System. The audit urged the department to stop that practice and to create a comprehensive policy for responding to data breaches, among other recommendations. The department complied, but clearly at least one other system contained an undetected vulnerability.

In the letter to teachers, Education Commissioner Margie Vandeven said “an individual took the records of at least three educators, unencrypted the source code from the webpage, and viewed the social security number (SSN) of those specific educators.”

In reality, the Post-Dispatch discovered the vulnerability and confirmed that the nine-digit numbers were indeed Social Security numbers. The paper then told the department that it had confirmed the vulnerability with three educators and a cybersecurity expert.

But in the press release, DESE called the person who discovered the vulnerability a “hacker” and said that individual “took the records of at least three educators” — instead of acknowledging that more than 100,000 numbers had been at risk, and that they had been available to anyone through DESE’s own search engine.

“For those educators determined to be impacted by this vulnerability, the state will make every effort to contact you directly as soon as possible to share information about the next steps,” Vandeven said in her letter.

Post-Dispatch attorney Joseph Martineau, of Lewis Rice, responded to DESE’s statements late Wednesday:

“The reporter did the responsible thing by reporting his findings to DESE so that the state could act to prevent disclosure and misuse,” Martineau said in a written statement. “A hacker is someone who subverts computer security with malicious or criminal intent. Here, there was no breach of any firewall or security and certainly no malicious intent.

“For DESE to deflect its failures by referring to this as ‘hacking’ is unfounded. Thankfully, these failures were discovered.”

What teachers can do

Shaji Khan, a cybersecurity professor at the University of Missouri-St. Louis, recommended that Missouri teachers request a free credit report from the three major credit bureaus — Equifax, Transunion and Experian — and monitor them carefully. Teachers should place a credit freeze with the bureaus if they notice suspicious activity, he said.

People who believe their identity has been stolen may report it to the Federal Trade Commission at www.identitytheft.gov.

October 15 is the filing extension deadline. Most taxpayers who requested an extension of time to file their 2020 tax return must file tomorrow to avoid the penalty for filing late.

Extension filers who owe taxes should pay as much as possible to reduce interest and penalties. Those who have yet to file a 2020 tax return, owe tax, and did not request an extension can generally avoid additional penalties and interest by filing the return as soon as possible and paying any taxes owed.

Here are a few resources on IRS.gov to help last-minute filers:

• Filing for individuals This page includes a link to IRS Free File, which is available through Oct.15. IRS e-file is easy, safe and the most accurate way to file taxes. Some Free File products are available in Spanish. Filing electronically can also help taxpayers determine their earned income tax credit, child and dependent care credit, and recovery rebate credit.
• Paying taxes Taxpayers can pay online or by phone. If filing through tax software or a tax preparer, they can schedule a payment when filing. If taxpayers have a balance and are unable to pay it now, they should set up a payment plan.
• Viewing account information Individual taxpayers can go to their online account to view key information from their most recent tax return such as their adjusted gross income, their payment history including any estimated tax payments and their economic impact payment amounts, which may help in preparing and filing their return. They can also view the amount they owe; their payment plan details and options, digital copies of certain notices, their address on file and authorization requests from tax professionals.

There are some groups who still have time to file. • Special deadline exceptions may apply for certain military service members and eligible support personnel in combat zones. Several resources are available for service members and their families who may be eligible for these exceptions.
• People who have a valid extension and are in – or affected by – a federally-declared disaster may be allowed more time to file

Need tax assistance? Call us at 816-524-4949 or visit our website to schedule a consultation.

The Labor Department said yesterday that Americans quitting their jobs jumped to 4.3 million in August, the highest on records dating back to December 2000, and up from 4 million in July. That’s equivalent to nearly 3% of the workforce. Hiring also slowed in August, the report showed, and the number of jobs available fell to 10.4 million, from a record high of 11.1 million the previous month. Hiring slowed sharply in August and September, even as the number of posted jobs was near record levels.

In the past year, open jobs have increased 62%. Yet overall hiring, as measured by Tuesday’s report, has actually declined slightly during that time. The jump in quits strongly suggests that fear of the delta variant is partly responsible for the shortfall in workers. In addition to driving quits, fear of the disease probably caused plenty of those out of work to not look for, or take, jobs. Nearly 900,000 people left jobs at restaurants, bars, and hotels in August, up 21% from July. Quits by retail workers rose 6%. Yet in industries such as manufacturing, construction, and transportation and warehousing, quits barely increased. In professional and business services, which includes fields such as law, engineering, and architecture, where most employees can work from home, quitting was largely flat.

Struggling financially? Call us at 816-524-4949 or visit our website to set up a consultation to determine your best option.