Debt Relief Pitchman Caught Hiding Assets

Mark Nagy Atalla, a defendant in a deceptive mortgage and debt relief enforcement action last year, must pay a previously suspended $515,000 court judgment after authorities discovered he hid assets, a federal district court in Southern California has ordered.

The court imposed the judgment after discovering Atalla did not disclose assets and misrepresented his financial condition to the Federal Trade Commission. The FTC in December 2013 charged Atalla and his two companies with violating the FTC Act and the Mortgage Assistance Relief Services Rule (known as the MARS Rule or Regulation O) when the defendants promised to lower consumers’ monthly mortgage payments in exchange for an upfront fee ranging from $1,495 to $4,495.

The defendants allegedly told consumers to stop communicating with their lenders and failed to make MARS Rule-mandated disclosures intended to ensure that consumers understand transactions with mortgage-assistance relief service providers and their rights under the MARS Rule.

The FTC's complaint charged that in addition to misrepresenting the likelihood that consumers would obtain a mortgage modification, the defendants falsely represented that consumers who did not receive a modification would receive full refunds, falsely represented that they were affiliated with the U.S. government and falsely claimed to provide legal representation to consumers.

The court order announced Friday formally lifted the suspended judgment, requiring Atalla to pay the full judgment, minus $650 he previously paid, plus interest for failing to disclose material assets and making misrepresentations on his financial statements.

"The court’s order in this case makes a very clear point," said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. "When you sign a settlement order with the Federal Trade Commission, you’d better be upfront about your assets. If you’re not, we won’t hesitate to collect suspended monetary judgments."