Wednesday, May 7, 2014
C.A. Upholds $4 Million Judgment Against Telemarketers
Panel Rejects Bid to Limit Restitution Award to Witnesses Who Testified
By a MetNews Staff Writer
A victim of an Unfair Competition Law violation may recover restitution, regardless of whether he or she testifies in court proceedings, the Fourth District Court of Appeal has ruled.
Div. Three, at the request of several consumer advocacy groups, yesterday certified for publication its April 24 opinion upholding an award of more than $4 million in restitution and penalties against the operators of an Orange County telemarketing boiler room company.
Hakimullah Sarpas, and Fasela Sheren, who went by the name of Sharon Fasela, claimed that their due process rights were violated because the award was based on their having made false mortgage modification loan promises to about 1,200 paying customers, only 16 of whom were listed as trial witnesses by the attorney general and only five of whom actually testified.
Another defendant, Zulmai Nazarzai, did not appeal. Nazarzai was held in contempt in 2012 for failing to turn over about $360,000 to customers, and remains incarcerated in Orange County, according to jail records.
Witnesses testified that they gave various sums of money—each $1,000 or more—to the defendants in response to cold calls promising them that the defendants would either get them loan modifications or refund their money. The defendants then told them to stop making payments on their loans, pushing them into default.
The customers said they did not receive loan modifications or refunds.
Justice Richard Fybel, writing for the Court of Appeal, said the defendants had adequate notice of the allegations and an opportunity to defend themselves. In a footnote, he rejected as “exaggerated and patently incredible” the defendants’ claim that they “walked into trial on the first day without any inkling of what they were alleged to have done, to whom, when, and what.”
The justice wrote:
“The Attorney General filed a lengthy complaint apprising Defendants of the charges and of the fact the Attorney General was seeking injunctive relief, restitution, and civil penalties. Attached to the complaint were declarations from 19 [US Homeowners Assistance] customers. Sarpas and Fasela received lengthy interrogatory responses and were given the names of hundreds of USHA customers....Properly noticed depositions were taken, but Sarpas and Fasela chose not to participate in them. Nothing prevented Sarpas and Fasela from conducting their own investigation, interviewing witnesses, taking depositions, and calling witnesses to testify at trial.”
The attorney general obtained an order shutting down the business when suit was filed in July 2009, after about 18 months of operation. Orange Superior Court Judge Andrew Banks found the defendants liable in March 2012 and ordered restitution and penalties and permanently enjoined the defendants from engaging in similar conduct.
The case is People v. Sarpas, G047462.
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