(Wilmington, DE): On April 17, 2006, the New Castle County Grand Jury returned a 28-count indictment against Daniel L. Ginsburg and former Delaware Finance Secretary Joseph T. Cashman, charging the two with racketeering, conspiracy, theft, securities fraud, and securities registration violations for activities related to a fraudulent advance fee loan scheme operating in Delaware. The New Castle City Police Department, who received the initial complaint from a Texas victim, assisted the Attorney General’s Office in the investigation.

Defendants Ginsburg and Cashman are alleged to have promoted a methodical, ongoing advance fee loan scheme through several business entities situated in Delaware, including Thatch, Inc. and The Two Js. The Defendants are said to have approved non-existent loans totaling millions of dollars for out-of-state businesses in need of financial capital at reasonable rates, but borrowers had to pay a percentage of the gross loan amount in advance as “points” on the loan, or “earnest money.” Once the victims paid the advance fee, they never received the loans they were promised, but were continually assured by Ginsburg and Cashman that the money was forthcoming. When the victims requested refunds on the advance payments they made on the loans, they were never reimbursed.

Investigators are searching for other potential crime victims. If you have any information on loans solicited by Joseph Cashman and/or Daniel Ginsburg regarding the businesses entities of Thatch, Inc., The Two J’s, Associates of Emma, L&T Trust, or SGE Associates, please contact Chief Securities Investigator Stanley J. Yackoski at (302) 577-8935.


Ameriquest Will Pay $325 Million and Reform its Lending Practices to Resolve States’ Investigations

 (Wilmington, DE): Attorney General Carl C. Danberg announced today that Ameriquest Mortgage Company, the nation’s largest sub-prime lender, has agreed to pay $295 million to consumers and make sweeping reforms of practices that states alleged amounted to predatory lending. Ameriquest also will pay a total of $30 million to the 49 states and D.C. that are participating in the settlement agreement for costs of the investigation and consumer education and enforcement. Delaware consumers could receive an estimated $194,000 for restitution as eligible Ameriquest customers. The remaining funds received will be used for consumer education and projects and for costs and fees.

“I am pleased that this multi-state action has produced such significant results for consumers both in Delaware and around the country, particularly those consumers who may be more susceptible to predatory lending tactics,” said Danberg.

The $325 million payment ranks as the second-largest state or federal consumer protection settlement in history, after the $484 million predatory lending agreement reached in 2002 between most states and Household Finance Corporation.

Law enforcement officials and financial regulators initiated their investigation after receiving hundreds of complaints from Ameriquest customers across the country. The ensuing investigation uncovered consumer protection problems in areas governed by the settlement. The alleged improper practices included: inadequate disclosure of prepayment penalties, discount points and other loan terms; unsolicited refinancing offers that did not adequately disclose prepayment penalties; improperly influenced and inflated appraisals; and encouraging borrowers to lie about income or employment to obtain loans.

Ameriquest is the nation’s largest sub-prime mortgage lender. Ameriquest primarily makes refinancing loans to existing homeowners who are hoping to consolidate credit card and other debt into their new home mortgage and come out ahead with overall monthly savings. Borrowers who don’t have the best credit ratings may turn to sub-prime loans, which often have higher interest rates and other costs.

Under the agreement, Ameriquest is required to:

* Provide the same interest rates and discount points for similarly-situated consumers.

* Provide full disclosure regarding interest rates, discount points, prepayment penalties, and other loan or refinancing terms.

* Not encourage prospective borrowers to falsify income sources or income levels.

* Overhaul its appraisal practices by removing branch offices and sales personnel from the appraiser selection process, instituting an automated system to select appraisers from panels created in each state, limiting the company’s ability to get second opinions on appraisals, and prohibiting Ameriquest employees from influencing appraisals.

An independent monitor will oversee Ameriquest’s compliance with the settlement terms. The monitor will have broad authority to examine Ameriquest’s lending operations, including access to documents and personnel. The monitor will submit periodic compliance reports to the Attorneys General during the next five years. Ameriquest will pay the monitor’s costs.

Restitution will be made to eligible Ameriquest customers who obtained mortgages from January 1, 1999 through December 31, 2005 with payments based on a formula set by the states. Delaware consumers do not need to take any action at this point to pursue recoveries – they will be contacted in the months ahead as specific recovery terms and plans are determined.




(Wilmington, DE): Attorney General Carl C. Danberg announced that the Fraud Division of the Delaware Department of Justice has received complaints, similar to those described across the country, concerning Advance Loan Fee Scams. These fraudulent schemes are not new, but they continue to be offered by unscrupulous persons hoping to take advantage of unsuspecting persons seeking loans.

An advance loan fee scheme involves the offer of a loan to a borrower, usually at a favorable interest rate. Generally, the pitch is that the loan broker will guarantee that the broker will obtain a loan for the borrower regardless of his or her employment, credit history or other negative credit factors. The catch is that, to obtain the loan, the borrower must pay the broker or middleman a fee in advance to obtain this guaranteed loan. The fee amounts may vary, but it is not uncommon for the fee to be 5-15% of the loan amount, although we have received complaints of even higher fee rates. The borrower, who often has been rejected by legitimate banks and lending institutions, sends the money requested, usually by wire or overnight delivery, to a specified location far from the borrower’s home. Ultimately, in these fraudulent schemes, the loan never materializes and the borrower’s advance fee also disappears. Unfortunately, the victims of these crimes are often those who can least afford the loss and because of common problems relating to prosecution of unknown persons operating outside of the jurisdiction, there is often no realistic way to recover the fee paid by the borrower.

These fraudulent pitches can be communicated by mail, advertisement, fax, telephone, internet or by any other means of communication. Before you send any “up front” money to a loan broker or intermediary seeking to loan you money conditioned on an advance fee:

* Ask yourself why this person is able to guarantee financing for you when legitimate local financial institutions are unwilling to approve your loan application;

* Do you know, or can you later identify, the person you are dealing with, or are you merely dealing with a voice on a telephone or a name on a monitor;

* Ask which lending institution is offering the loan – do you know the institution and will they verify the broker’s promise;

* Request names, addresses and telephone numbers of other loan clients of the broker and verify that they received the loan at the terms promised;

* Request loan documentation from the lending institution showing all terms and conditions of the proposed loan before making any advance payment;

* Ask yourself whether you can afford to lose the fee payment if the loan offer is actually part of a fraudulent scheme.

If you have been a victim of an Advance Fee Loan scam, contact your local police agency. If you have questions about Advance Fee Loan schemes, or if you believe that someone is offering a fraudulent Advance Loan Fee product, contact the Fraud Division of the Department of Justice at either 577-8424 or 577-8600.



(Wilmington, DE): Attorney General Carl C. Danberg and the Consumer Protection Unit of the Delaware Department of Justice will be co-sponsoring Operation Delaware Shred, with the help of Delaware Federal Credit Union, Document Security Management, AARP Delaware and Clear Channel Radio Stations 94.7 The River, 92.9 WDSD, 1410 WDOV, 1290 the Ticket, 1450 WILM.

This event gives Delaware residents an opportunity to shred up to two (2) file storage boxes of all their sensitive documents, such as credit card statements, financial statements, pre-approved credit card offers, old IRS tax forms, bank checks, or household bills. A commercial-sized shredding truck will be used for this event. Items no larger than staples and paper clips can be attached to the papers. One of the methods thieves use to steal your information is combing through recycling and garbage for sensitive information that has been thrown away. Attorney General Danberg recommends and encourages citizens to use a shredder (preferably cross-cut) for sensitive documents, such as credit card statements, financial statements, pre-approved credit card offers, old IRS tax forms, bank checks and household bills. Because identity theft costs consumers a great deal of time and money, the best way to protect yourself is by guarding your private information and destroying it safely by shredding.


January 14, 2006 from 9:00 a.m. – 12:00 noon
Riverfront Parking Lot in front of the Blue Rocks Stadium in Wilmington

Special thanks to the Riverfront Development Corporation, Wilmington Blue Rocks, and the
Clean Wilmington Committee for assistance with this event.

January 21, 2006 from 9:00 a.m. – 12:00 noon
Delaware Federal Credit Union at the Blue Hen Corporate Center (655 South Bay Road, Dover)

January 28, 2006 from 9:00 a.m. – 12:00 noon
Delaware Federal Credit Union at 80 Christiana Road (Route 273) in New Castle

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