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SAN JOSE MAN CHARGED WITH DEBT REDUCTION SCAM

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For release on March 27, 2013

CONTACT:
David Lim
Deputy District Attorney
Real Estate Fraud Unit
(408) 808-3754


SAN JOSE MAN CHARGED WITH DEBT REDUCTION SCAM

A 46-year-old San Jose man, already convicted twice before for running financial scams, was arraigned this morning on a felony fraud charge for trying to run a debt reduction service with a dubious catch: first, the debtors had to pay him a big fee.

Robert Childs called his latest seminar “Debt Defense of America.” In addition to the new charges filed, Childs is still on probation from his 2011 felony conviction. If convicted of the new charges and violation of probation, Child faces up to seven years in jail.

“The Santa Clara County District Attorney’s Office has a zero-tolerance policy against individuals who run illegal ‘debt elimination’ or ‘mortgage fraud rescue’ schemes,” Deputy District Attorney David Lim said. “The District Attorney’s Office will prosecute organizations that prey on consumers by charging exorbitant fees for services with little to no possibility of actual help to the victims.”

In August 2011, Childs was convicted of a felony for running a mortgage fraud scheme in which he took advanced fees from homeowners on the promise of eliminating their debt and saving their home from foreclosure. He called that seminar “Pro Family Financial Systems.” A year later, Childs admitted a violation of probation and was given 45 days in jail after attempting to run another credit repair services company.

In the newest criminal case, Childs was arrested on March 20, 2013 and charged with a felony conspiracy to run a debt elimination scheme. Santa Clara County District Attorney Investigators had discovered Childs pitching his “Debt Defense” to a crowd in a Campbell community center. Childs promised to help homeowners remove their existing debt, but required a payment of 15% of the homeowners existing debt to sign up for the service.

In California, debt elimination services, also known as credit services organizations, must be registered with the California Department of Justice, and may not accept advanced fees for their services until completing all the services they promise to do.

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