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Scam takes advantage of those in financial distress, facing foreclosure

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MILWAUKEE (WITI) -- Thousands of people are desperate to save their homes from foreclosure. You might be one of them, but FOX6's Contact 6 says -- don't make the situation worse. What may seem like a way out of debt could make your situation worse!

"Right now, we`re waiting for a knock on the door from the Sheriff`s office to tell us to get out of the house," fraud victim Jeff Lyon said.

Lyon and his family are hoping to hold on to their home after getting duped in a bankruptcy scam.

"When the economy took a dump on everybody, we fell behind on our mortgage. I was also hurt at work. I was in a coma for a month and a half. When I got out of the hospital, we were too far behind and the bank wouldn`t work with us anymore," Lyon said.

Lyon turned to Philip Igoe -- an attorney who worked with clients facing foreclosure. Igoe offered to help by filing for bankruptcy protection or a loan modification.

"The victims were under financial distress based on their home mortgage. That`s why they were desperate to seek out help of a professional," U.S. Postal Inspector Brett Leonard said.

Postal inspectors say Igoe was running a scam. He would ask for fees upfront, which could be between $500 and $600.

"They were also asking the victims to pay the mortgages to the attorneys and he would forward the money to the mortgage company," Leonard said.

Igoe never forwarded the money to the mortgage company -- but instead, kept it for himself.

Lyon is now on the verge of losing his home.

"How do you go to your kids and tell them you have to move out of the house you grew up in because I lost it," Lyon said.

Annette Adams, another of Igoe's victims is heartbroken after losing the house her father gave her.

"I don`t know where this money went to. I don`t know what he did. He scammed me not once but three times," Adams said.

Postal inspectors say 15 people were caught in Igoe's scheme -- and there were hundreds of thousands of dollars in losses.

"This was a very specific scam. I would suggest consumers seeking doctors or lawyers look at the regulatory websites to see if there have been any prior disciplinary actions to the people they are seeking business from," Leonard said.

Lyon has his own advice.

"Don`t trust anybody. Get everything on paper. Everything. Double check everything they are doing," Lyon said.

Igoe was charged with mail fraud, bankruptcy fraud and obstruction of justice.

His wife, Stacy also faces federal charges for lying to cover up the scheme.