Corporate Misconduct Accountability Project
C.C. Enterprises, Inc. (d/b/a HOPE Services) · FTC Enforcement Action
HOPE Services Stole Nearly $2M From Families Facing Foreclosure
FTC alleges HOPE Services and affiliated companies deceived distressed homeowners into sending fake trial mortgage payments, stealing their money while families lost their homes.
CRITICAL SEVERITY
TL;DR
The Federal Trade Commission filed suit in 2015 against HOPE Services, HAMP Services, and related entities for allegedly running a mortgage relief scam that stole nearly $2 million from desperate homeowners. The companies promised loan modifications and told consumers to send trial mortgage payments to so-called trust accounts. Those payments never reached the actual lenders. Instead, the defendants pocketed the money while families fell deeper into foreclosure, with some losing their homes entirely.
This case shows how vulnerable homeowners become targets when corporations exploit fear and desperation for profit.
$2M
Total allegedly stolen from distressed homeowners
3
Fake trial payments demanded from each victim
2-3%
False interest rates promised to lure families in
The Allegations: A Breakdown
Core Allegations
What they did · 8 points
| 01 | Defendants sent official-looking mailers with government-style seals and terms like New HAMP Benefits to make families believe they were affiliated with federal mortgage relief programs. The FTC alleges these mailers were designed to deceive homeowners into trusting the companies. | high |
| 02 | Companies told homeowners they were preliminarily approved for loan modifications with drastically reduced interest rates (often 2-3%) and lower monthly payments. These promises were false. Defendants did not obtain modifications or even attempt to submit applications to government agencies. | high |
| 03 | Defendants instructed consumers to make three trial mortgage payments by cashier’s check or money order, payable to Trust Payment Center or Trial Payment Processing followed by the lender’s name. The FTC alleges none of these payments ever reached the actual mortgage lenders. | high |
| 04 | The companies claimed trial payments would be held in the lender’s trust account like an escrow and either forwarded to the lender or refunded if no modification was obtained. In reality, defendants kept all the money for themselves. | high |
| 05 | An Advocacy Department run by defendant Denny Lake contacted consumers after the first payment to reassure them and prevent them from discovering the fraud. Lake’s representatives told families not to contact their lenders and explained away foreclosure warnings as bureaucratic confusion. | high |
| 06 | Defendants told consumers their lenders could no longer foreclose once signed documents and the first payment were received. This was false. Foreclosure proceedings continued because lenders never received any payments. | high |
| 07 | Companies used multiple business names including HOPE Services, HAMP Services, Trust Payment Center, Trial Payment Processing, and Retention Divisions to confuse consumers and evade detection. The FTC alleges this was a deliberate strategy to hide the scheme. | medium |
| 08 | The FTC alleges defendants deliberately omitted the final page of the official Request For Mortgage Assistance form when sending it to consumers. That page warned homeowners to beware of foreclosure rescue scams and never make mortgage payments to anyone other than your mortgage company without their approval. | high |
Regulatory Failures
How the system failed to protect homeowners · 5 points
| 01 | Defendants violated the MARS Rule by collecting fees before consumers executed a written agreement with their lender incorporating the modification offer. The rule prohibits advance fees, yet defendants demanded multiple payments upfront with no legitimate modification in place. | high |
| 02 | The FTC alleges defendants failed to disclose in all commercial communications that they were not associated with the government and their service was not approved by the government or any lender. This violated mandatory MARS Rule disclosure requirements. | high |
| 03 | Defendants never provided the required consumer-specific disclosures stating that consumers could stop doing business at any time and reject any offer without paying. These omissions violated the MARS Rule and kept victims trapped in the scheme. | medium |
| 04 | Companies operated across state lines using various corporate entities and business names, exploiting the fact that regulatory agencies often lack resources or jurisdiction to coordinate effectively. By the time federal authorities intervened, many consumers had already lost thousands of dollars. | medium |
| 05 | The FTC complaint notes that HUD has no formal process for receiving consumer modification applications. Despite this, defendants claimed to submit applications to HUD and other government agencies, knowing these representations were false. | high |
Profit Over People
How defendants prioritized money over helping families · 5 points
| 01 | The entire structure from initial mailers to trial payments was engineered to generate income, not to provide actual mortgage assistance. The FTC alleges profit, not community well-being, was the sole priority. | high |
| 02 | Defendants collected nearly $2 million from distressed households through the fake trial payment scheme. The FTC alleges this money was funneled directly to those orchestrating the scam rather than being held in trust or forwarded to lenders. | high |
| 03 | The companies positioned themselves as consumer advocates and used nonprofit-sounding names like HOPE and Advocacy Department to build trust. The FTC alleges these labels were deliberately chosen to create an illusion of caring support while running a deceptive operation. | high |
| 04 | Defendant Denny Lake’s Advocacy Department was paid tens of thousands of dollars by HOPE defendants for keeping consumers on the hook. Lake’s role was to prevent families from discovering the fraud by maintaining frequent contact and offering false reassurances. | high |
| 05 | By demanding certified funds (cashier’s checks or money orders) only, defendants ensured payments could not be reversed or traced back once deposited. This made it nearly impossible for victims to recover their money. | medium |
Economic Fallout
The financial devastation inflicted on families · 6 points
| 01 | Families scraped together emergency funds or borrowed from relatives to send the first, second, and third trial payments. By the time they realized no modification was coming, they had exhausted their financial reserves and had no way to recover the money. | high |
| 02 | Because lenders never received any payments, consumers incurred late fees, higher interest accruals, and additional penalties on their mortgages. The FTC complaint states many homeowners only discovered these mounting charges after receiving foreclosure notices. | high |
| 03 | Some consumers declared bankruptcy as a direct result of the scheme. Others lost their homes to foreclosure. The FTC alleges the defendants’ conduct created a direct pipeline from hope to homelessness. | high |
| 04 | Individual losses often equaled several mortgage payments, sums that already-financially distressed consumers could not afford to lose. The complaint emphasizes these losses were more than many families could bear. | high |
| 05 | Entire neighborhoods were destabilized when foreclosures spiked as a result of the scheme. Vacant or abandoned homes drove down property values and hindered community cohesion, affecting families who were never direct victims. | medium |
| 06 | Local tax bases suffered as foreclosed properties sat empty, limiting resources available for schools, public health initiatives, and other community services. The economic ripple effects extended far beyond individual victims. | medium |
Worker Exploitation
How employees were used to perpetrate the fraud · 4 points
| 01 | The complaint references intake representatives, counselors, and Advocacy Department employees who made calls and processed paperwork. Lower-level staff may have been pressured to meet quotas or told they were genuinely helping people while top executives reaped the financial rewards. | medium |
| 02 | Intake representatives reinforced the defendants’ false claims by using numerous terms affiliated with legitimate government loan modification programs. The FTC alleges staff were trained to invoke HOPE, HAMP, HUD, MHA, and NACA to build credibility. | medium |
| 03 | Employees in the Advocacy Department told consumers that HOPE defendants were paying them, positioning themselves as nonprofit helpers. This allowed Lake and his staff to maintain the illusion they were independent advocates rather than paid facilitators of fraud. | medium |
| 04 | When consumers complained about not receiving return calls promptly, staff attributed the delay to government cutbacks. The FTC alleges employees were instructed to use these excuses to deflect blame and keep victims patient. | low |
Public Health and Safety
The human cost of housing instability · 4 points
| 01 | Many homeowners were already desperate when they approached HOPE Services. Learning months later that the arrangement was a sham compounded the stress, anxiety, and depression that accompany impending foreclosure. | high |
| 02 | Financial stress and housing instability correlate with higher incidence of health issues including hypertension and mental health crises. The FTC complaint notes this scenario becomes a public health concern. | medium |
| 03 | Evictions and foreclosures leave families without stable housing, which disrupts children’s education, limits access to healthcare, and forces people into substandard living conditions. The complaint acknowledges some victims lost their homes entirely. | high |
| 04 | Real nonprofits and legitimate advocates found their reputations tarnished when unscrupulous operators mimicked the look and feel of philanthropic or government programs. Trust was eroded and the entire sector lost credibility, making it harder for genuine help to reach those in need. | medium |
Community Impact
How entire neighborhoods suffered · 3 points
| 01 | Vacant houses resulting from foreclosures dragged down neighborhood property values, leading to a broader sense of decline that sparked crime and undercut local tax revenues. The FTC complaint notes entire neighborhoods can be destabilized when foreclosures spike. | medium |
| 02 | Communities lose faith in any system purporting to protect ordinary people when mortgage relief schemes go unchecked. The damage is both financial and deeply psychological, eroding trust in government programs and nonprofit assistance. | medium |
| 03 | Local consumer advocacy groups and grassroots organizations often have first contact with distressed homeowners. When these groups lack resources, they cannot catch warning signs early or help victims exit scams before damage accumulates. | medium |
Corporate Accountability Failures
How defendants evaded consequences · 5 points
| 01 | Defendants used multiple business names including HOPE Services, Trust Payment Center, Retention Divisions, HAMP Services, and Trial Payment Processing. The FTC alleges they frequently swapped brand identities when complaints surfaced, making it harder for authorities to track the scheme. | high |
| 02 | By the time federal authorities stepped in, many consumers had already lost thousands of dollars they could not recover. The FTC complaint emphasizes the time lag between the start of the fraud and regulatory intervention allowed the defendants to extract numerous payments unnoticed. | high |
| 03 | Homeowners often only learned they were victimized once their lender sent a foreclosure warning. Even if a consumer realized the scam quickly, the bureaucracy of halting a foreclosure or recouping lost payments was formidable. | medium |
| 04 | The complaint alleges individual defendants including Chad Caldaronello, Derek Nelson, Brian Pacios, and Justin Moreira formulated, directed, controlled, or participated in the fraudulent acts. Personal accountability was sought alongside corporate liability. | medium |
| 05 | Relief defendant Cortney Gonsalves received funds or assets traceable directly to the defendants’ deceptive practices and had no legitimate claim to those funds. The FTC sought disgorgement from individuals who benefited from the scheme. | medium |
The PR Machine
How defendants disguised their fraud · 5 points
| 01 | Defendants used mailers designed to look and feel official, known as snap pack or snap sealed mailers. These envelopes were sealed on three sides with perforated edges recipients had to tear off, mimicking government correspondence. | high |
| 02 | Inside the mailers, the top left was marked PERSONAL AND CONFIDENTIAL and the top right included what looked like an official government seal, similar to the one on the back of a one-dollar bill. Above the seal were the words New HAMP Benefits. | high |
| 03 | The companies called their program HOPE Services and later HAMP Services, deliberately choosing names that mirrored the government’s Homeowner’s HOPE Hotline (888-995-HOPE) and Home Affordable Modification Program (HAMP). The FTC alleges this was intended to maximize credibility. | high |
| 04 | Defendants told consumers they were a nonprofit and that the government pays them to help distressed homeowners. When asked about fees, the Advocacy Department representatives said HOPE defendants were paying them, reinforcing the nonprofit illusion. | high |
| 05 | The FTC complaint notes defendants claimed they were simply misunderstood or singled out, their activities were completely legal, and they provided a valuable service by completing bureaucratic forms. These deflections are typical of corporate PR strategies when confronted with fraud allegations. | medium |
Exploiting Delay
How defendants kept victims on the hook · 6 points
| 01 | After consumers made their first payment, the Advocacy Department contacted them to reassure them and prevent discovery of the fraud. Lake’s representatives maintained frequent contact throughout the trial payment period, emphasizing that work was being done to secure a modification. | high |
| 02 | When consumers raised concerns about continued foreclosure warnings, sale date notices, or court dates, the Advocacy Department told them the process was continuing or nearing completion. The FTC alleges these reassurances were designed to keep victims sending payments. | high |
| 03 | Defendants instructed consumers not to talk with their lender because it would purportedly give the lender a reason to void the modification. In other cases they suggested consumers could speak to their lender but there was no need to do so. Both tactics prevented victims from learning the truth. | high |
| 04 | The companies warned that low-level lender representatives would be unaware of the modification due to the lender’s size and disorganization. Defendants claimed their experience showed often the left hand does not talk to the right hand at big banks. | medium |
| 05 | Defendants advised consumers against speaking with attorneys despite foreclosure notices, sale dates, and hearings. They told families lawyers were expensive and unnecessary given the relief HOPE defendants would provide. This prevented victims from getting independent advice that could have exposed the fraud. | high |
| 06 | By keeping consumers on the hook for months, defendant Denny Lake’s Advocacy Department doubled, tripled, or quadrupled victims’ losses. The FTC alleges most consumers incurred additional penalties and interest as they fell further behind on their mortgages. | high |
The Bottom Line
What this case reveals · 4 points
| 01 | The FTC alleges HOPE Services and affiliated companies operated a three-phase loan modification scam targeting homeowners facing foreclosure. They collected nearly $2 million through fake trial payments that were never forwarded to lenders. | high |
| 02 | Defendants violated the FTC Act, the MARS Rule, and the Telemarketing Sales Rule through deceptive representations, prohibited advance fee collection, and failure to provide mandatory disclosures. The complaint seeks permanent injunctions and consumer restitution. | high |
| 03 | This case exemplifies how vulnerable homeowners become targets when corporations exploit fear and desperation for profit. The pipeline from hope to devastation was not just bad actors but a consequence of weak oversight and profit-driven incentives. | high |
| 04 | The FTC requested preliminary relief including asset freezes and appointment of a receiver to prevent further consumer injury during litigation. The complaint emphasizes absent injunctive relief, defendants were likely to continue injuring consumers and reaping unjust enrichment. | high |
Timeline of Events
Prior to 2010
C.C. Enterprises and D.N. Marketing establish operations in California, later doing business as HOPE Services and HAMP Services.
2010-2014
Defendants mail official-looking solicitations and cold-call distressed homeowners, promising loan modifications through government programs like HAMP 2 and MHA.
2011-2014
Defendants instruct thousands of consumers to send trial mortgage payments to fake trust accounts. None of these payments reach actual lenders.
2011-2015
Denny Lake’s Advocacy Department contacts victims after first payments to reassure them and prevent discovery of the fraud. Lake is paid tens of thousands of dollars for these services.
2014-2015
Consumers begin receiving foreclosure notices and discover lenders never received their trial payments. Some families lose their homes or declare bankruptcy.
April 14, 2015
Federal Trade Commission files complaint in U.S. District Court, Central District of California, seeking permanent injunction, asset freeze, and consumer restitution.
Direct Quotes from the Legal Record
QUOTE 1
Government affiliation misrepresentation
allegations
“HOPE Defendants represent that the consumer may be eligible for a ‘New 2014 Home Affordable Modification Program’ or ‘HAMP 2.’ HOPE Defendants claim that the program is ‘an aggressive update to Obama’s original modification program,’ and that ‘[y]our bank is now incentivized by the government to lower your interest rate through the New HAMP 2 Program.'”
💡 This quote shows defendants deliberately invoked the President and federal programs to make families believe they were dealing with a government-approved service.
QUOTE 2
Fake trust account promise
allegations
“HOPE Defendants claim that the lender’s trust account is ‘like an escrow account’ and thus ensures the lender cannot take the consumer’s money without accepting the modification. HOPE Defendants state that lenders ultimately will receive the payments, or the payments will be refunded.”
💡 This promise convinced families their money was safe and protected when in fact defendants were stealing it outright.
QUOTE 3
No modifications obtained
allegations
“Despite their claims, HOPE Defendants do not obtain modifications, or even attempt to obtain modifications. They do not submit consumers’ applications to any governmental agency or nonprofit.”
💡 The FTC alleges defendants never performed any legitimate service whatsoever. They simply took the money and did nothing.
QUOTE 4
Payments never forwarded
profit
“HOPE Defendants do not place consumers’ reinstatement fees or trial mortgage payments in trust, nor do they forward them to consumers’ lenders, nor do they return them to consumers. Instead, HOPE Defendants steal consumers’ reinstatement fees and trial payments.”
💡 This confirms the entire scheme was outright theft with no legitimate business purpose.
QUOTE 5
Total harm to victims
economic
“As a result of the fraud, distressed homeowners have lost nearly $2 million. Individual losses that often roughly equal several mortgage payments are more than the many already-financially distressed consumers can bear. Some declare bankruptcy, and some lose their homes.”
💡 This quantifies both the total economic damage and the devastating individual consequences including bankruptcy and homelessness.
QUOTE 6
Advocacy Department’s role in prolonging fraud
delay_tactics
“Lake’s Advocacy Department maintains frequent contact with consumers throughout the period when the monthly trial mortgage payments are due. When consumers raise concerns about continued foreclosure warnings, sale date notices, and even court dates, Lake’s Advocacy Department reassures them.”
💡 Lake was not an innocent third party but an active participant who kept victims trapped in the scheme long enough to extract multiple payments.
QUOTE 7
Lake knew it was fraud
accountability
“Lake and his employees at the Advocacy Department know or consciously avoid knowing that: HOPE Defendants are representing to consumers that a loan modification is in place, HOPE Defendants have not obtained modifications for the consumers, and it is highly unlikely that any consumer will receive a modification as a result of the Advocacy Department’s efforts.”
💡 The FTC alleges Lake had actual knowledge or deliberately avoided learning the truth, making him liable for assisting the fraud.
QUOTE 8
Victims instructed not to contact lenders
delay_tactics
“In numerous instances, HOPE Defendants instruct consumers not to talk with their lender during this process because it will purportedly give the lender a reason to void the purported modification.”
💡 This tactic prevented victims from discovering the fraud by speaking directly with their lenders, who would have told them no payments were being received.
QUOTE 9
Missing page from official form
pr_machine
“Notably, the version HOPE Defendants send to consumers omits the form’s seventh and final page. That page warns consumers to ‘BEWARE OF FORECLOSURE RESCUE SCAMS,’ and ‘never make your mortgage payments to anyone other than your mortgage company without their approval.'”
💡 Defendants deliberately removed the fraud warning from the official government form they sent to victims, showing calculated deception.
QUOTE 10
MARS Rule violation on advance fees
regulatory
“Since January 31, 2011, the MARS Rule prohibits any MARS provider from requesting or receiving payment of any fee or other consideration until the consumer has executed a written agreement between the consumer and the consumer’s loan holder or servicer that incorporates the offer that the provider obtained from the loan holder or servicer.”
💡 This federal rule explicitly prohibited what defendants were doing, yet they collected millions in advance fees anyway.
QUOTE 11
No required government disclaimer
regulatory
“In HOPE Defendants’ general commercial communications, as defined in 12 C.F.R. section 1015.2, they fail to state: ‘HOPE Defendants are not associated with the government, and our service is not approved by the government or your lender,’ or ‘[e]ven if you accept this offer and use our service, your lender may not agree to change your loan.’ In fact, they state just the opposite.”
💡 Defendants not only failed to provide mandatory disclaimers but actively made the opposite false claims to deceive consumers.
QUOTE 12
Certified funds requirement
profit
“HOPE Defendants instruct consumers to send all payments in ‘certified funds only’—either cashier’s checks or money orders—made payable to ‘Trust Payment Center/[the consumer’s lender],’ ‘Trial Payment Processing/[the consumer’s lender],’ ‘Retention Divisions/[the consumer’s lender],’ or one of these pairings, but in reverse.”
💡 Requiring certified funds ensured payments could not be reversed or traced once deposited, making it nearly impossible for victims to recover their money.
QUOTE 13
Foreclosure protection lie
allegations
“HOPE Defendants tell consumers that, as soon as HOPE Defendants receive the signed documents and the first payment, the lender can no longer foreclose on the consumer’s home.”
💡 This false promise gave families a false sense of security that stopped foreclosure, when in reality foreclosures continued because lenders received nothing.
QUOTE 14
Relief defendant received ill-gotten gains
accountability
“Relief Defendant Cortney Gonsalves (‘Gonsalves’) received funds or assets that can be traced directly to Defendants’ deceptive acts or practices, and she has no legitimate claim to those funds.”
💡 The FTC sought to recover funds not just from corporate defendants but also from individuals who personally benefited from the stolen money.
QUOTE 15
Systemic harm to communities
community
“Entire neighborhoods can be destabilized when foreclosures spike. Homes sitting vacant or abandoned drive down property values and hinder community cohesion. Local tax bases suffer as well, limiting resources available for schools, public health initiatives, and other services.”
💡 The complaint acknowledges the ripple effects of mortgage fraud extend beyond individual victims to damage entire communities.
Frequently Asked Questions
What did HOPE Services promise homeowners?
HOPE Services and affiliated companies promised to obtain loan modifications with drastically reduced interest rates (often 2-3%) and lower monthly payments through government programs like HAMP. They told families they were preliminarily approved and just needed to make three trial mortgage payments to a trust account to finalize the deal.
Where did the trial payments actually go?
The FTC alleges none of the trial payments reached the actual mortgage lenders. Instead, defendants kept all the money for themselves. They instructed consumers to make checks payable to names like Trust Payment Center or Trial Payment Processing followed by their lender’s name, creating the illusion the money would go to the lender when it actually went straight to the defendants.
How much money did defendants allegedly steal?
The FTC complaint states distressed homeowners lost nearly $2 million in total through this scheme. Individual losses often equaled several mortgage payments, which many already-struggling families could not afford to lose.
What happened to victims who sent the trial payments?
Because their actual lenders never received any payments, victims incurred late fees, higher interest charges, and additional penalties. Many only discovered the fraud when they received foreclosure notices. The FTC states some consumers declared bankruptcy and some lost their homes entirely.
What was the Advocacy Department’s role?
The Advocacy Department was run by defendant Denny Lake and contacted victims after they made their first payment. Representatives reassured families that their modification was progressing and told them not to worry about foreclosure notices or contact their lenders. The FTC alleges this was designed to keep victims sending payments and prevent them from discovering the fraud. Lake was paid tens of thousands of dollars for these services.
How did defendants make their scheme look legitimate?
Defendants used official-looking mailers with government-style seals and terms like New HAMP Benefits. They chose company names like HOPE Services and HAMP Services that mimicked real government programs. They sent partially completed official Request For Mortgage Assistance forms (while deliberately removing the page warning about foreclosure scams). They told consumers they were a nonprofit affiliated with the government.
What laws did defendants allegedly violate?
The FTC alleges violations of the FTC Act (deceptive practices), the Mortgage Assistance Relief Services (MARS) Rule (collecting advance fees, failing to provide mandatory disclosures, misrepresenting government affiliation), and the Telemarketing Sales Rule (misrepresenting services, collecting illegal advance fees, failing to disclose refund terms).
Why did it take so long for victims to realize they were scammed?
Defendants told victims not to contact their lenders because it might void the modification. The Advocacy Department maintained frequent contact to reassure victims and explain away foreclosure warnings as bureaucratic confusion. Defendants claimed low-level bank employees would be unaware of the modification due to the lender’s size. By the time victims received foreclosure notices, they had already sent multiple payments.
What relief did the FTC seek?
The FTC requested a permanent injunction to stop defendants from future violations, asset freezes to preserve funds for victim restitution, appointment of a receiver, and consumer restitution including rescission of contracts, refund of monies paid, and disgorgement of ill-gotten gains. The complaint also sought to recover funds from relief defendant Cortney Gonsalves who received money traceable to the fraud.
What can homeowners do to protect themselves from similar scams?
Never make mortgage payments to anyone other than your lender without calling your lender directly to verify. Be suspicious of any company claiming government affiliation or using names similar to real government programs. Legitimate loan modifications are negotiated directly with your lender or through HUD-approved housing counselors (find them at HUD.gov). Legitimate counselors do not charge advance fees or ask for payments before a modification is finalized. If something feels wrong, contact your state attorney general or the FTC immediately.
You can read about this lawsuit on the FTC’s website: https://www.ftc.gov/system/files/documents/cases/150430householdcmpt.pdf
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