FACT SHEET
Masheyeva v. Law Offices of David M. Green
CONTACT MEDIA RELATIONS
Lawyers’ Committee for Civil Rights Under Law: Stacie B. Royster
Office: 202-662-8317
Email: sroyster@lawyerscommittee.org
Davis Polk & Wardwell: Katie Harter
Public Relations Office
(212) 450-3039
All statements below are allegations provided by the plaintiffs. None of these allegations have
been proven yet.
ABOUT Masheyeva v. Law Offices of David M. Green
Eighteen homeowners from New York and six other states filed a lawsuit against a network of
loan modification companies based in Long Island, New York, as well as their owners and chief
employees, asserting several causes of action arising out of the companies’ loan modification
activities including those for breach of contract, fraud, legal malpractice, and violations of
consumer protection statutes in New York. The lawsuit alleges that the defendants operated a
fraudulent scheme in which they lured homeowners in need of mortgage assistance with false
promises of guaranteed mortgage loan modifications, and then failed to deliver on those
promises after collecting thousands of dollars in upfront fees from the homeowners. The
plaintiffs now seek monetary and injunctive relief against the defendants for their damages
caused by the Defendants’ loan modification scams. The Lawyers Committee for Civil Rights
Under Law and Davis Polk & Wardwell LLP are representing the plaintiffs free of charge.
ABOUT THE PLAINTIFFS
The plaintiffs in Masheyeva v. Law Offices of David M. Green include:
Ms. Angelina Masheyeva and Mr. Vadim Vorobyov (Staten Island, New York) (¶¶ 100-170):
• Ms. Masheyeva and Mr. Vorobyov are a married couple with 3 children.
• In 2009, the couple began having trouble making their mortgage payments due to several
high medical bills for their child.
• In or about August 2009, Ms. Masheyeva received an unsolicited phone call from a
representative advertising the services of the Law Offices of David M. Green. To this
2
day, Ms. Masheyeva and Mr. Vorobyov do not know how this representative obtained
their phone number.
• During this first phone call, the representative told Ms. Masheyeva that she would be
unable to get a loan modification on her own. He stated that if she and her husband
engaged the services of the Law Offices of David M. Green, they would be able to lower
their monthly mortgage payments by at least $1,000.00.
• In a subsequent phone conversation, the defendants assured Ms. Masheyeva that she and
her husband’s financial situation sounded “great” for a loan modification.
• The defendants charged Ms. Masheyeva and Mr. Vorobyov $3,500.00 in upfront fees for
their purported loan modification services.
• At no time did Defendants inform Ms. Masheyeva and Mr. Vorobyov that they could
obtain free modification assistance from housing counselors at the Department of
Housing and Urban Development (“HUD”)
• Ms. Masheyeva and Mr. Vorobyov were encouraged by the defendants to cease making
their monthly mortgage payments. Defendants represented to Ms. Masheyeva and Mr.
Vorobyov that if their lender would not negotiate the modification if the couple made a
payment.
• Ms. Masheyeva and Mr. Vorobyov were also told to stop all communications with their
lender.
• On one occasion, Ms. Masheyeva reported to the defendants that someone had been
taking pictures of her home and that she was concerned that this meant that foreclosure
proceedings were imminent. A representative of the Law Offices of David M. Green
assured her that this was just “procedure” and that it “happens to everyone.”
• On another occasion, Ms. Masheyeva told a defendant about a letter she and her husband
received from their lender regarding the possibility of a short sale on their home. The
defendant told her that this was “garbage mail.”
• Ms. Masheyeva and Mr. Vorobyov never received the mortgage loan modification
promised by the defendants. In fact, in January 2011, Ms. Masheyeva and Mr. Vorobyov
learned from their lender that they did not even qualify for a loan modification.
• When Ms. Masheyeva and Mr. Vorobyov demanded a refund of the $3,500.00 they paid
in upfront fees from the defendants and objected to defendants’ practice of collecting
thousands of dollars in upfront fees for loan modification services, Defendant David
Green responded, “an attorney is exempt from the loan modification/foreclosure defense
rules.”
• The couple is currently facing foreclosure proceedings.
Ms. Cynthia Stewart (Elmont, New York) ( ¶¶ 385-417):
• Ms. Stewart is a single mother of two children. She began having trouble making her
monthly mortgage payments when her monthly expenses increased significantly due to
her son’s enrollment in college and several loan payments becoming due.
• In March 2011, Ms. Stewart received an unsolicited phone call from a representative of
the loan modification company Empire Home Savings advertising the company’s loan
modification services. The representative encouraged Ms. Stewart to come to the
company’s offices and speak with a “specialist” who would be able to help her obtain a
loan modification. Ms. Stewart was later told by one of the defendants that Empire
Home Savings was closely affiliated with the Law Offices of David M. Green.
3
• In April 2011, Ms. Stewart went to their offices and learned that if she engaged the
defendants’ loan modification services, her application would be prepared and reviewed
by attorneys at the Law Offices of David M. Green.
• Ms. Stewart was also told by a defendant that he knew a representative at her lender’s
office personally and that Ms. Stewart’s loan modification application had already been
approved pending submission of final paperwork.
• In addition, a defendant told Ms. Stewart that she would be unable to obtain a loan
modification on her own and that she needed an “advocate” to participate in the
negotiations with her lender.
• Ms. Stewart was originally told that the defendants’ loan modification service would cost
her $2,500.00 in upfront fees but that the defendants had a “money-back guarantee” and
would refund her money if her application was not approved.
• Ms. Stewart explained to one of the defendants that she could not afford a $2,500.00 fee
and that she had only approximately $2,150.00, which constituted her bimonthly
paycheck. The defendants accepted this lower fee and Ms. Stewart endorsed her
paycheck of $2,142.49 to the defendants. Ms. Stewart was repeatedly assured that the
upfront fee would be held in escrow until her loan modification was complete.
• Ms. Stewart was advised to ignore any foreclosure notices from her lender and to delay or
stop making her mortgage payments.
• Shortly after Ms. Stewart paid her upfront fee, the defendants became unreachable. They
refused to return her calls or voicemail messages. When she contacted her lender, she
learned that no application for a loan modification had been filed by the defendants.
• Ms. Stewart continues to struggle to make her mortgage payments.
ABOUT THE LEGAL CLAIMS
The plaintiffs are seeking monetary damages as well as injunctive relief against the defendants,
asserting that without judicial intervention preventing the defendants from engaging in further
scams, other homeowners will be at risk of losing thousands of dollars in illegal upfront fees and
other financial penalties, and will be at risk of facing foreclosure proceedings. The complaint
also alleges various causes of action including:
• Violation of N.Y. General Business Law § 349 (“Deceptive Practices Act”) and § 350
(“False Advertisement”): The defendants are alleged to have made numerous false
promises and misrepresentations to the plaintiffs in violation of the Deceptive Practices
Act, including misrepresenting the nature and quality of their loan modification services,
misrepresenting the progress of the plaintiffs’ loan modification applications, and
encouraging the plaintiffs to stop paying their monthly mortgage payments and/or stop
communicating with their lenders/servicers. Defendants also falsely advertised their
services, which plaintiffs’ relied on to their detriment. (¶¶ 481-488)
• Breach of Contract: The defendants are alleged to have breached their oral and written
contracts with the plaintiffs by failing to perform the services they promised the
plaintiffs, and/or failing to refund thousands of dollars in upfront fees obtained from the
plaintiffs. (¶¶ 561-565)
4
• Violation of Real Property Law § 265-b: The defendants are alleged to have violated
N.Y. Real Property Law § 265-b by accepting upfront fees from distressed homeowners
in exchange for offering to negotiate the terms of their mortgage loans. According to the
complaint, the defendants did not provide direct consulting services in the course of a
“regular legal practice.” (¶¶ 513-523)
• Fraud, Violation of New York Banking Law § 590, and Legal Malpractice: The
defendants’ false representations also constituted fraud and legal malpractice. For
example, the defendants fraudulently concealed the progress of plaintiffs’ loan
modification applications and then abandoned several plaintiffs after receiving their
upfront fees. Defendants then refused to refund plaintiffs’ fees, despite the fact that
plaintiffs never received any legal services and/or their “guaranteed” modification.
Finally, New York Banking Law § 590 requires persons or entities “who are in the
business of soliciting, processing, placing or negotiating mortgage loans” to register as
“mortgage brokers” with the Superintendent of the New York State Banking
Department. Some defendants have flagrantly disregarded this registration requirement.
(¶¶ 524-552, 498-512, 566-569)
