W.N.Y. Couple Pleads Guilty To Felony In Advance Fee Loan Scheme
Attorney General Spitzer today announced felony pleas by a husband and wife from Western New York who had engaged in an advance fee loan scheme that defrauded dozens of consumers out of over $170,000.
Max W. Balcom, Jr., 32, and his wife, Andrea Balcom, 29, both of Williamsville, pled guilty before Supreme Court Judge Penny Wolfgang to one count of Scheme to Defraud in the First Degree, a class E felony, which is punishable by up to 1ÿ to 4 years imprisonment.
"My office will take aggressive action against those individuals who steal consumers’ hard-earned money using false promises and deceit," Spitzer said.
According to the felony complaint, the Balcoms promoted their business, Source Funding, by faxing advertisements to mortgage brokers who, in turn, recommended them to loan applicants. The investigation further revealed that, between February 2004 and November 2005, the Balcoms pre-approved 44 loan applications and received over $170,000 in advance fees from consumers. During that same time, the Balcoms failed to place or approve a single loan and instead used the money for personal living expenses.
A parallel civil investigation resulted in a court order signed by Erie County State Supreme Justice Eugene Fahey that bars the Balcoms from requiring or accepting advance payments from consumers or businesses.
The civil court decree also orders the Balcoms to refund their victims a total of $170,000 and, in the event they fail to pay that full amount, permanently bars them from the mortgage or mortgage broker business in New York State unless they post a $500,000 performance bond.
This case is one of several advance fee loan and credit card cases filed by Spitzer’s office. In addition to this matter, since 1999, the Attorney General’s office has commenced nine enforcement actions involving advance fee financing scams.
For information about advance fee loans, Spitzer recommends consumers visit the Attorney
General’s web site at http://www.ag.ny.gov or call its consumer help line at (800) 771-7755.
Spitzer thanked the New York State Police for its assistance in this matter.
The investigation was led by Assistant Attorney General James Morrissey of the Buffalo Regional Office, who was joined by Senior Investigator Harry Frank of the Attorney General’s Investigations Bureau and Investigator Michael Bauer of the New York State Police. Assistant Attorney General Viola Abbitt, Deputy Bureau Chief of the Criminal Prosecutions Bureau, supervised the criminal case.